World Perspectives

Anchor on U.S. Agricultural Exports

The U.S. dollar was already at a two-year high when President-Elect Donald Trump announced he would impose tariffs on Canada and Mexico over drugs and immigration. The Canadian dollar was at a four year low against the dollar and fell further. The peso also fell and is now at its weakest in over two years. Import restrictions promise to inflate U.S. prices and thus spur further Fed interest rate hikes, causing the dollar to appreciate further. But a strong dollar reduces the competitiveness of U.S. agricultural commodity exports. There is a moderate inverse correlation between U.S. farm exports and the real annual agricultural trade-weighted exchange rate of the dollar. The correlation can be better or worse depending on the commodity...

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From WPI Consulting

Communicating importance of value-added products

Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.

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