“U.S. Dollar at 20-year High Pulls Grain Prices Lower”- That’s one of several similar market news headlines seen last week. USDA chief economist Seth Meyer says a stronger dollar against the currencies of other countries is not very good news for U.S. farmers and grain marketers who depend on exporting their products.
“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.”
And last week, for that reason and some others, USDA projected that in this next marketing year, export volumes of U.S. wheat, rice, corn, soybeans, cotton, beef, and pork all will be down from this current year.
Meyer adds that the stronger U.S. dollar may be a food security issue, “for many of the countries that are most vulnerable seeing their currency weaken against the dollar. And the dollar is quite strong relative to where it was back in 2008, 2010 when we had similar high commodity prices.”
According to MarketWatch.com, the Dollar Index gained 6.8% from the end of May through July 14th, following a 6.9% increase in the month of May, the biggest such increase since 2015.
Source: USDA Radio News Service
