Lower oil prices adding to farmer economic woes: Part I

Lower fuel prices have been one of the few bright spots in farm budgets this winter. But those fuel prices are proving to be a double-edged sword, according to Dennis DeLaughter, market analyst with VantageRM, LLC in Austin, Texas.

Cheaper oil is resulting in the currencies of countries that track oil prices to determine their value depreciating, giving nations such as Russia, Argentina and Brazil a competitive advantage in commodity markets. The Argentine peso, for example, dropped 47 percent after Argentina's new president allowed the currency to float and removed the country's export taxes.

The move allowed Argentina to increase its exports of corn and soybeans almost over night, leading to even more problems with the grain surplus that is impacting the U.S. markets. The outlook for other markets is also being impacted by such currency shifts.

DeLaughter was one of 131 speakers at the National Conservation Systems Cotton and Rice Conference in Memphis, Tenn., Jan. 13-14.

For more on the conference, go to http://www.nctd.net/.

 

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