With the UK’s recent exit from the European Union, the world awaits to see the vast effects that this move will have on the international economy. In the US, people in the agricultural sector are braced for potential impacts on the beef industry.
The US exports over $6 billion in beef and other meats, and that number can be strongly dependent on the value of the dollar.
If Brexit results in a long-term decline in the European and UK economies, this may lead to a stronger US dollar. While this can certainly be good news for those looking to purchase goods with the dollar, it also has consequences on the other side of things.
If people abroad don’t have as much money to spend on US beef, the industry may face some setbacks. Instead of spending their wages on luxury items like certain cuts of beef, they may end up pinching pennies by focusing on cheaper meats and local animals.
This is largely an indirect effect that can be difficult to foresee. As economies fluctuate, interest rates and exchange rates also change, but there can be a delay that depends on a variety of factors.
All of this translates into some uncertainty for the US cattle ranchers. Ultimately, the supply will find an equilibrium with the worldwide demand for beef, and hopefully the prices will allow for enough profit for American farmers to have a strong showing in 2016.