By Stephen DeAngelis
In Part 1 of this series, I discussed the importance of global manufacturing ecosystems. International consumer packaged goods (CPG) manufacturers rely on such ecosystems — but so do consumers who rely on both processed and fresh foodstuffs. Without global food ecosystems, our lives would be much less interesting and fulfilling. Global food ecosystems will be impacted by some of the same perturbations I discussed in my previous article. In that piece, I wrote, “In early April, an economic de-globalization nuclear bomb went off, threatening to wipe out decades of globalization and international trade in one fell swoop. This was a system shock (i.e., a system perturbation) of epic proportions. It set in motion a series of actions and reactions in global markets that are just beginning to reveal themselves. It will take us some time to understand the full consequences of these unfolding events.”[1]
In addition to the shock created by a global trade war, the food ecosystem also faces a growing challenge created by climate change. Food journalist Nicholas Robinson reports that a group of food experts recently released a memo in which they concluded, “Food and drink is ‘unprepared’ for an impending climate-induced meltdown. … Food and drink production is under significant threat, with the sector unable to rely on the yield, quality or predictability of supply from most major sourcing regions in the coming years.”[2]
The Global Food Ecosystem Footprint
For those who have the mistaken impression that food supply chains are mostly local, freelance writer CaLea Johnson explains, “The U.S. brings in more food products from abroad than it sends out, which means most Americans rely on foreign-grown goods to get dinner on the table.”[3] To underscore that point, she referenced a map created by Colin K. Khoury, a Senior Scientist and Director of Food Plant Research at the San Diego Botanic Garden, and other colleagues for the International Center for Tropical Agriculture (CIAT).[4] Click on this link to connect with an interactive version of the map.
Johnson notes that the study from which the above map was taken “examined food production in 177 countries, which accounts for about 99 percent of the global population.” She adds, “Though diets and agriculture vary around the world, many countries share something in common: They’re eating food grown elsewhere.” Even in breadbasket countries, like the United States, much of the food eaten or seasonings used by consumers is imported. James Kaufman, an Agricultural Economist with the U.S. Department of Agriculture (USDA), reports, “The United States is the world’s largest nation in terms of agricultural product trade (and second behind the aggregated European Union). The leading U.S. agricultural exports are grains and feeds, soybeans, livestock products, tree nuts, fruits, vegetables, and consumer-oriented food products. The leading U.S. agricultural imports are processed food and beverages, and tropical products. Mexico, Canada, the European Union, and China are the top U.S. trade partners.”[5]
The Packaged Food Conundrum
Although many food products are imported, the majority of America’s packaged foods are processed domestically. Tom Madrecki, vice president of supply chain resiliency at the Consumer Brands Association (CBA), released the following statement explaining why food ingredients imported from outside the country should be exempt from new tariffs:
“As the largest domestic manufacturing sector by employment, supporting more than 22 million American jobs and contributing $2.5 trillion to the U.S. GDP, the consumer packaged goods industry already manufactures the majority of its products here in the United States. However, there are critical ingredients and inputs that need to be imported due to scarce availability domestically. No amount of tariffs will bring these inputs back to the U.S. However well intended, the success of the President’s America First Trade Policy, must recognize the U.S. companies that are already doing it the right way but depend on imports for specific ingredients and inputs that cannot be sourced domestically. Reciprocal tariffs that do not reflect ingredient and input availability concerns will inevitably raise costs, limit consumer access to affordable products and unintentionally harm iconic American manufacturers. We encourage President Trump and his trade advisors to fine-tune their approach and exempt key ingredients and inputs in order to protect manufacturing jobs and prevent unnecessary inflation at the grocery store.”[6]
The CBA statement highlights the importance of global food ecosystems for both domestic and international consumers.
Concluding Thoughts
Consumers win when global food ecosystems operate at peak efficiency. Journalist Julie Creswell observes, “Just a few years ago, the chief supply chain officer or procurement manager at large companies focused mostly on searching the globe for the lowest-cost producers — or, for companies trying to market sustainability to customers, those that could demonstrate that they produced their food or goods in a climate-friendly and ethical manner.”[7] Such efforts would still be good for consumers and companies. Unnecessary tariffs won’t help. Creswell explains, “The ability of companies to pass along the tariffs to inflation-weary consumers may be limited, some analysts warn. Packaged food companies, for instance, may have to ‘absorb at least some of the costs,’ rather than risk losing market share.” Even so, both consumers and companies lose in that scenario.
There is a very strong case to be made for growing more food domestically. Stephanie Mercier, an agriculture policy consultant, observes that the agriculture trade balance has swung into negative territory in recent years. She explains, “The positive [U.S.] net trade balance remained robust for several decades, averaging nearly $20 billion in nominal dollars between 1978 and 2017, peaking at more than $40 billion in 2013. Starting in 2018, the rate of increase in U.S. agricultural exports slowed, while the rate of increase in U.S. agricultural imports continued to climb. Calendar year 2019 was the first year since 1959 to show a slight negative trade balance (less than $500 million). The U.S. agricultural net trade balance flipped back to a modestly positive level in 2020 and 2021, then went back to negative in 2022 and ballooned back to a net $20 billion trade deficit for calendar 2023. As of August 2024, USDA is projecting a net agricultural trade deficit of more than $42 billion for 2025 on a fiscal year basis (USDA does not typically project calendar year trade figures).”[8]
As to why the shift took place, Mercier notes, “The $5.4 billion decline in export value is primarily as a result of lower prices for key crops such as soybeans, corn, and cotton, even as actual trade volumes of those commodities have risen. In addition, both volumes and the prices received for exported U.S. beef … decline[d] between 2023 and 2024. The remaining increase in the trade deficit, about $17 billion, is accounted for by higher values in agricultural imports, consisting primarily of more horticultural and tropical product imports as well as increased sugar imports. A significant share of U.S. agricultural imports are known as non-competitive products, which consist of those products which have negligible or modest domestic production, such as coffee and cocoa, or horticultural products coming from countries which have non-overlapping growing seasons with domestic production, such as tomatoes and avocados. One of the driving factors for increased imports of these types is a shortage of migrant workers to hire to work on U.S. fruit and vegetable farms, making U.S. consumers more reliant on imports of those product categories.”
Like Madrecki and Mercier, Kaufmann points out, "Much of this demand is for high-valued imports like fruits and vegetables, alcoholic beverages, and processed foods. Such goods often can’t be easily or economically produced in the United States, such as tropical products or off-season produce." Both American consumers and domestic growers benefit from a strong global food ecosystem. Mercier observes, "For many farmers, the phrase ‘American farmers feed the world’ has tangible and deeply gratifying meaning."
Footnotes
[1] Stephen DeAngelis, “The World Today Part 1. Background: The Best Manufacturing Ecosystems Win,” Enterra Insights, 4 April 2025.
[2] Nicholas Robinson, “Food industry ‘disaster’ imminent investors warned by insiders,” Food Navigator Europe, 3 April 2025.
[3] CaLea Johnson, “This Interactive Map Shows You Where Your Food Comes From,” Mental Floss, 4 April 2025.
[4] Colin K. Khoury, et. al // CC BY 4.0
[5] James Kaufman, “Agricultural Trade,” U.S. Department of Agriculture, 1 April 2025.
[6] Tom Madrecki, “Consumer Brands Calls for Tariff Exemptions on Scarce Ingredients and Inputs,” Consumer Brands Association, 2 April 2025.
[7] Julie Creswell, “Tariffs Add a New Shock to Food Supply Chains,” The New York Times, 5 March 2025.
[8] Stephanie Mercier, "Why Has U.S. Agricultural Trade Reached a Net Import Position in Recent Years," 19 September 2024.
