Weaker dollar bullish for U.S. ag commodities

An ag economist expects a weak dollar to be bullish for U.S. agriculture heading into 2021.

Tanner Ehmke with CoBank says abundant liquidity is weighing on our currency.

“You’ve got the federal government incurring record levels of deficit spending, so they’re injecting a lot of money into the U.S. economy.”

Speaking during the Minnesota AgriGrowth virtual Ag and Food Summit Thursday, he also pointed to historically low interest rates and quantitative easing as factors for a weaker dollar.

“When the dollar is weak, commodity prices go up. When the dollar is strong, commodity prices go down. And now we’re seeing the value of the dollar on a downward path. The question is how much further do we have to go?”

Ehmke says some economists predict another 20 percent drop, which he calls extreme.  But he does expect the dollar to weaken another five to ten percent before bottoming out.

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