Weakening U.S. currency could help some ag exports
A report by ag lender Cobank says a projected weaker dollar in 2021 might benefit meat and dairy exports because of stronger currencies in Australia, Europe and New Zealand.
But Cobank ag economist Tanner Ehmke said grain exports might not receive the same support from exchange rates.
“If you look at the currencies of our major competitors, we’re talking about Brazil, we’re talking about Argentina, and then if you go to the Black Sea region… we’re talking about Russia and Ukraine, they’re big competitors with wheat, all those currencies have been much weaker,” he said.
He tells Brownfield while exchange rates might negatively impact U.S. grain exports, there are several other factors.
“The Chinese are still buying feed to feed their growing hog herd, there are still weather issues affecting crop production around the world,” Ehmke said. “You can’t discount those fundamentals; those fundamentals are still and those are still going to be the major drivers of markets going forward.”
Ehmke said global currency values comes down to COVID-19 vaccine distribution. He says generally stronger economies mean stronger currencies.