Jim Langcuster at Auburn University recently published an article in the Southeast Farm Press titled, Weakened Dollar Could Cause Farm Problems that highlights some issues farmers could be facing in times of a weakened dollar. Here is an excerpt of the article…

The mighty American greenback has fallen on hard times — so hard, in fact, that countries throughout the world are clamoring for its replacement as the world’s reserve currency. How would farming be affected by the change? One of the effects of the dollar’s replacement by another currency would almost inevitably be a vastly cheaper greenback. If history serves as any measure of the potential effect on agriculture, shouldn’t farmers be dancing for joy? After all, in historical terms, haven’t U.S. farmers traditionally favored cheap money and free trade?

“In terms of farming, economic theory says that devaluation would make our goods cheaper internationally and help us export more,” says James Novak, an Alabama Cooperative Extension System economist and Auburn University professor of agricultural economics.

But as he is the first to point out, the dollar’s loss of reserve status carries with it far more implications than the simple price of farm products. There is also the potentially wider, if not far-reaching effect on the entire U.S. economy to consider, he says.