World Perspectives
energy

Oil and Food

The price of petroleum has plummeted, putting countries that are highly dependent on its export earnings into deep fiscal trouble. This should hinder their amount of foreign exchange and thus food imports beyond basic necessity. However, looking at the recent history of U.S. food exports to these countries and the average annual value of oil, there is no discernible pattern except perhaps a negative correlation. There could be several reasons for this disconnection. First, the U.S. is not a main supplier of food to many of these countries. In fact, Washington has trade embargoes against OPEC members like Iran and Venezuela, plus restrictions on trade with Russia. Even close ally Saudi Arabia shows minimal relationship (R2 = 0.11) between t...

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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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