The Trade Deficit and the Fight for Farm Policy

American agriculture in 2025 is under structural pressure from two overlapping disruptions. A record-breaking trade deficit is squeezing farm margins at the same time a bruising fight over labor and immigration policy is creating uncertainty around workforce availability. Each is constraining farm operations, ag infrastructure, and the economic ecosystem that supports rural producers. Export conditions have weakened under reduced global demand, currency fluctuations, and competitive pressure. Policy headwinds have tightened labor supply just as efficiency and predictability are needed to ensure year-over-year survival.

These disruptions are expected to persist for the foreseeable future, reshaping how producers think about risk, how associations engage with regulators, and how rural economies anticipate future investment. 

The Growing Trade Deficit

The USDA’s latest outlook is projecting that the U.S. will close fiscal year 2025 with a $49.5 billion trade deficit for agriculture, the largest gap in history and a reversal of a decades-long history of trade surpluses. U.S. farms have come to rely on export demand to offset domestic oversupply and improve price stability. The export mechanism is now weakening under prolonged pressure.

A decline in volume of key staples like corn, wheat, and soybeans has been a primary contributor to the widening imbalance. Higher production volumes in countries like Brazil, Argentina, and Ukraine have added to global supply at lower average cost, while a strengthening U.S. dollar further constrains export competitiveness. Logistics costs and geopolitical instability in key shipping routes have added further headwinds to U.S. market access.

Imports, meanwhile, are expanding for different reasons. A growing U.S. consumer demand for year-round access to specialty crops, processed foods, and plant-based ingredients has pushed food import volumes up even as domestic producers struggle to maintain profitability. This shift in consumption does not appear to be temporary or easily redirected; it is a generational change in diet and supply chain dynamics that have come to prioritize global sourcing, variety, and convenience over domestic production.

The result is a two-sided market in which U.S. farms produce bulk commodities for export but increasingly see domestic shelves stocked with imports that do not directly compete and instead change the economic equation. An acceleration in imports at the same time exports are shrinking drives the trade ledger deep into negative territory.

The trade deficit is creating direct economic pressure for producers. From the top, lower elevator prices create immediate cash flow pressures. From the bottom, consumer resistance to price increases combined with import competition limit market power. In aggregate, lower prices squeeze margins, which in turn create tighter credit, less equipment investment, and lower land value appreciation. Co-ops and rural banks are seeing declines in confidence for forward-looking models tied to export markets. Left unchecked or without strategic redirection, the situation is likely to create a prolonged period of margin compression that inhibits farm growth, diversification, and agility for mid-size operations.

Pressure on producers is being felt in the labor market as well, where immigration enforcement has tightened and a system of H‑2A visas that provide seasonal legal access to agricultural labor is backlogged, slow, and more expensive to navigate. Audit rates and complex compliance demands around documentation and housing have increased administrative burden and taken away flexibility in annual hiring cycles.

For many producers, especially in fruit, vegetable, and specialty crop sectors, this labor pressure is critical. In the current cycle, crops are going unharvested, fields are being left fallow, and packing facilities are missing throughput targets. The inability to hire for full capacity is causing producers who rely on predictable labor to experience increased risk and in some cases, irrecoverable revenue loss.

The reaction has been to turn up lobbying. Agricultural groups have already spent nearly $29 million in lobbying expenditures as of mid-2025 to advance legislation and administrative reforms. They are focused on raising H‑2A visa quotas, clearing the application backlog, standardizing enforcement requirements, and carving out exemptions for agricultural employers from rules that do not match the realities of seasonal workforce needs.

Who’s at the Table?

Driving agricultural lobbying in 2025 is a mix of national institutions and specialized coalitions. The American Farm Bureau Federation continues to lead on many core issues, but more tactical work is being performed by groups like the National Council of Agricultural Employers, the Western Growers Association, and the Agricultural Workforce Coalition. These organizations are playing less in general outreach and more in the realm of regulatory interventions, using legal filings, congressional briefings, and public messaging to advance specific relief measures. 

Collaborations are playing a larger role than in the past. Farm organizations are lining up with allied groups in transportation, food service, and logistics to show the cross-sector impact of labor constraints. The goal of these joint advocacy efforts is to communicate that agricultural labor is not an isolated issue but one that affects food security, supply chain stability, and retail pricing across the economy. In states like California, Arizona, and Georgia, regional coalitions have formed around a joint policy agenda, combining dollars with strategic media outreach to keep these issues on the public agenda. 

The lobbying approach has also matured. Many agricultural groups now have dedicated legal teams and data analysts that are able to track federal rulemaking and project downstream impacts in advance of their being felt on the ground. The capacity has created the opportunity to respond more quickly to executive orders, labor rulings, and shifts in visa policy. Armed with modeling and labor flow projections, these groups are able to make evidence-based arguments for policy adjustments and carve-outs in near-real time. 

Each of these efforts is united by a sense that every day that passes with processing delays, every unexpected audit, and every break in the seasonal hiring cycle creates a disadvantage that producers cannot overcome later in the year. The lobbies, the data work, the coalition building, each is an attempt to protect continuity in a system that runs on timing, predictability, and access. When any of those variables breaks down, so too does yield, revenue, and regional stability.