Overview
Changes in the macroeconomy have major effects on agriculture.
The main factors linking agriculture to the U.S. and global macroeconomy
are exchange rates, international trade, foreign and domestic income, rural employment,
interest rates, and energy costs. International and domestic macroeconomic
shocks can cause major changes in the values of these
variables, resulting in changes in a country's agricultural
prices, production, consumption, and trade.
Features
USDA Long-Term
Macroeconomic Outlook (annually in February) provides the projections underlying
the USDA baseline. Movements in real (adjusted for inflation)
exchange rates and growth in income influence the long-term
trade outlook.
U.S. Trade Growth: A New Beginning or a Repeat of the Past? (September 2007) evaluates how global economic growth patterns and domestic macroeconomic conditions have influenced recent trends in U.S. agricultural trade. Emerging market growth, a weaker dollar, and the potential for slower domestic consumption growth suggest a continuation of robust export growth and moderating demand for imports. For the full report, see Global Growth, Macroeconomic Change, and U.S. Agricultural Trade (September 2007).
China Currency Appreciation Could Boost U.S. Agricultural Exports (August 2007) reports that China's undervalued exchange rate keeps prices of most U.S. food and agricultural products too high to be competitive in China. Appreciation of the Chinese currency will increase the purchasing power of Chinese consumers on world markets and increase China's demand for imported commodities.
|
