The dollar is at a 20-year high, and that spells trouble for the U.S. ag export market.
A stronger dollar compared to currencies of other countries is problematic for U.S. farmers and grain marketers as it makes our products less competitive on the global market. USDA Chief Economist, Seth Meyer explains.
“The strength in the dollar makes those commodities look more expensive to all of our customers. So, you see a strong dollar being transmitted into higher domestic prices for everybody we want to trade with, so it tends to tamper down foreign demand because of those seeming high prices in their own currency. I think it’s also a food security issue for many of the countries that are most vulnerable, seeing their currency weaken against the dollar,” according to Meyer.
The USDA is projecting export numbers for most major U.S. commodities to be down next year.
Related:
Weakened dollar makes several ag commodities more competitive
Strong commodity prices leading to very strong net farm income levels, according to one economist
It is getting more expensive to export agricultural goods
