AG Fallout From Dropping Dollar

[greendeerslayer]

Haven't seen this discussed, what are the implications of the collapsing dollar for those of us involved in agriculture? What will happen to livestock and vegetable prices?

[Igel]

1. Assuming that it's not a catastrophic fall,

wouldn't it just mean that American ag product prices abroad would decline (making them cheaper overseas), while foreign ag products would see their prices rise in the US.

It would make transportation more expensive.

Making American production less expensive can't hurt overseas sales. But I'm not sure it'll have a significant effect.

Corrections welcome.

[rogerashton]

2. That's right, in terms of economic thinking. eom

[leveymg]

4. Large producers have currency hedges that will allow them to weather

fluctuations. Energy will be a lot higher, if domestic prices finally catch up with rise in global markets. Gasoline pump price, in particular, has been kept artifically low for over a year.

Not much farm equipment is really made in the USA, so new purchases and parts will also rise.

Not good news for cost of production, I'm afraid, particularly those who sell domestically

[illflem]

3. Farmer here

It was expected that the falling dollar was going to make US farm prices more completive but it doesn't appear to be panning out.
Projections are that 2005 will be the first year in US history that Ag imports into the US exceed exports. This is a $9.5B drop from '04.

[Igel]

5. Was it a drop in exports or a rise in imports that tipped the

balance of trade?

[illflem]

6. Both

[kineneb]

7. Wonder if CA wine will sell better

both in US and as export. I live in Lake Co. which is trying to be the next "Napa Valley". The growers are putting in a lot of vineyards...wonder if they will lose their shirts when the dollar tanks?

[MissMarple]

8. I saw an article the other day about American wines.

They are becoming more popular and the French are feeling a bit of pinch. Apparently French wine designations are less understandable for the growing numbers of American wine consumers.

It was perhaps the Denver Post or maybe the Wall Street Journal. :shrug: