Brexit and What it May Mean for U.S. Farmers

Brexit and What it May Mean for U.S. Farmers

With the recent the decision of the United Kingdom to leave the European Union, there have been a lot of questions of what this will mean and how it will affect farmers here in the U.S. as well as in the U.K. Today is a two-part story about how U.S. farmers may feel the affects of Brexit. Rabobank AgriFinance’s Grain and Oilseed Analyst Steve Nicholson says
Nicholson: “i think the impact on agriculture is probably short-term. But it does introduce a couple of things to U.S. producers and it is going to impact Western producers because wheat is important among other things. One is that it has introduced an uncertainty to the market. It is an uncertainty that the market wasn’t anticipated and that sounds kind of odd — but markets don’t like uncertainty. They like to have some view of what is going on. All of a sudden this uncertainty comes in and it was like, ‘I don’t know where that came from.’ It was so opposite as to where the market was leaning — expectations were that it would die and we’d move on. But when the U.K. voters decided and that introduced an uncertainty in the markets and we’ve seen it in currency markets, we’ve seen it in equity markets and we’ve obviously seen it with a little impact in the commodity markets. I think that uncertainty is going to create more volatility in the market than we anticipate. If we look back over the last week — well it is been almost two weeks — we look back it has been uncertainty and volatityl to the downsides.”

 

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