Overview
Changes in the macroeconomy have major effects on agriculture.
The main factors linking the macroeconomy and agriculture
are exchange rates, consumer income, rural employment,
and interest rates. 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 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 (annual in February).
U.S. Trade Growth: A New Beginning or a Repeat of the Past? 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).
Recommended Readings
China Currency Appreciation Could Boost U.S. Agricultural Exports 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 (August 2007).
Weaker
Dollar Strengthens U.S. Agriculture provides an overview
of the impact of the current depreciation of the U.S.
dollar. The depreciating dollar combined with strong economic
growth in developing countries has increased the competitive
advantage of U.S. agriculture and stimulated export demand
for U.S. agricultural products. However, fixed currencies,
trade policies, and imperfect markets can reduce the effects
of depreciation (February 2007).
Canada: A Macroeconomic
Study of the United States’ Most Important Trade
Partner reports that Canada is a large exporter to
the United States of critical raw materials—including
natural gas, petroleum, and wood products—and a
substantial importer of finished industrial and consumer
goods. Agricultural trade between the two countries continues
to grow in importance, reflecting trade liberalization
and greater integration of agricultural markets (September
2006).
See all recommended readings...
Recommended Data Products
The Agricultural Exchange
Rate Data Set includes nominal and real exchange rates
for 80 countries on a monthly and annual basis beginning
in January 1970. Agricultural trade-weighted exchange
rates are also calculated for U.S. agricultural market
countries, competitors, and suppliers.
For international data on real gross domestic product,
population, real exchange rates on a 2000 base, and other
variables, see the International
Macroeconomic Data Set. Contains historical data from
1971 and 10-year projections.
Questions and Answers
Important Questions and Answers
about macroeconomics and agriculture.
Glossary
How are key Macroeconomic Terms
relevant for agriculture defined?
Related Briefing Rooms
Agricultural Baseline
Projections
Farm Income and Costs
Food CPI,
Prices, and Expenditures
U.S. Agricultural Trade
Related Links
Links to international organizations, U.S. government
agencies, and university sites focused on macroeconomic
analyses and data.
See all related links...
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