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Perfect Storm brewing on trade front

A market analyst says as trade negotiations go south and the value of the dollar goes higher, U.S. agriculture faces monumental headwinds.

Jamey Kohake with Paragon Ag Advisors tells Brownfield whether its crops or livestock, the export environment is swelling into a perfect storm.

“The NAFTA deal short-term, especially over the weekend with the Trudeau and Trump stuff, and are we going to negotiate 1-on-1 now if we can’t get some type of sunset provision that everybody can agree on.  It’s negative across the board no matter how you analyze it.”

He says there’s also a negative weather influence as crop condition ratings come in at levels not seen since the early 90’s.

Further complicating exports is a U.S. Dollar that’s been rallying since mid-April.

“Unemployment is at record lows, we’ll probably have two more rate hikes this year (and) maybe three or four next year.  Really this economy seems to be short-term okay and we’ve seen that dollar really shoot higher.”

Kohake’s marketing advice during this volatile time is to lock in a floor and hope for positive geopolitical or weather news later in the year.