UK withdrawal means even lower crop prices - News, Weather and Sports for Lincoln, NE; KLKNTV.com

UK withdrawal means even lower crop prices

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Posted by: Abigail Wood

awood@klkntv.com

"Wow. No one saw this coming. This is remarkable."

This from Dr. Ernie Goss, an economist from Creighton University who joins people around the world who are scratching their heads after the UK voted to leave the European Union Thursday. He says we're already feeling the ripple effects of that decision in Nebraska.
 
"Investors globally are sensing this high degree of financial risk so they're moving toward what they judge is safer territory, and that would be the US," he said.

More people are investing in US bonds because the Pound and Euro are shaky in light of recent events, but because those currencies lost some of their value, people in the UK have less money to buy things. That poses a big problem to international trade, and that directly impacts our farmers.

"I only teach supply and demand," Goss said. "They live supply and demand. And today the demand just got weaker for US commodities."
He says the UK's move toward nationalism means there will be greater barriers to trade, and this will mean less demand for the three largest exports in the US: energy, manufacturing, and of course, agriculture.
"Those are the three weakest sectors in the us economy, in other words, this is bad timing for the us economy," he said, adding: "It's bad timing for the Nebraska economy."

This means even lower crop prices at a time when farmers are really leaning on global exports to break even.

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