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July 2017, Volume 23, Number 3

US Ag Trade, CAP

The value of US agricultural exports averaged $140 billion a year in recent years, while imports averaged $100 billion. US agricultural exports are about 10 percent of total US exports, and agricultural imports are five percent of total imports.

The US exported fresh and processed fruits and vegetables worth $6.1 billion in 2015 and imported fruits and vegetables worth $17.6 billion, for a deficit of $11 billion. About half of the produce trade deficit is due to imports of bananas and fresh tomatoes and other vegetables. In the 1970s, the US had a trade surplus in fruit and vegetable trade.

Mexico provided 44 percent of US fruit and vegetable imports in 2015, followed by Canada, 12 percent, Chile, eight percent, and the EU, seven percent. The leading items by value of the $10.4 billion of fruits and vegetables imported from Mexico were tomatoes, avocados, peppers, grapes, cucumbers, melons, berries and onions in 2015.

The US imported $2.3 billion worth of tomatoes in 2016, including 87 percent from Mexico; in 1990, Mexico accounted for 98 percent of the $378 million in tomato imports. Mexican tomato exports surged as Mexican farmers invested in protected culture to raise yields. In 2016, Mexico had 37,100 acres of tomatoes under protected culture with yields averaging 2,000 25-pound boxes per acre, more than double 1990 yields. US yields of field tomatoes average about 1,200 25-pound boxes per acre.

The major reasons for rising fruit and vegetable imports include US consumer demand for fresh produce year-round, the ability of foreign producers to satisfy this out-of-US season demand, and relatively few US tariff barriers to imports. The global average tariff is 50 percent of fruit and vegetable import value, but the US imposes a tariff of less than five percent on 60 percent of fruits and vegetables. Other major reasons for rising imports are limited US supplies (bananas) or counter-seasonal supply (Chilean grapes in winter).

The 2008 and 2014 farm bills included a market access program and a technical assistance program to bolster US produce exports. US exporters assert that some countries use fears of disease and pests to restrict produce imports from the US.

CAP. The EU's Common Agricultural Policy (CAP) pays benefits to seven million farmers a year. The CAP is budgeted to spend E400 billion between 2014 and 2020 to support farmers' incomes and to protect the environment. It also has many other goals, including encouraging young people to get into farming.

Johnson, Renee. 2016. The U.S. Trade Situation for Fruit and Vegetable Products. CRS. https://fas.org/sgp/crs/misc/RL34468.pdf