Corn futures have tumbled 28 percent from a record high in June as exports sagged. Smithfield Foods, Inc., the largest U.S. pork producer, earlier this month said operating profit in its international business fell 61 percent in the previous quarter. U.S. beef exports declined three consecutive months after hitting a peak in July, according to Agriculture Department data.
“If the euro falls, it will have wide spread impacts on economies of other countries, including the U.S.,” said Robert Cropp, a dairy economist at the University of Wisconsin in Madison. More sluggishness in the U.S. economy would curb demand for milk and other dairy products, he said, while a likely appreciation in the dollar would curb exports.
“Whether the overall impact would be a 2009 repeat is not clear,” Cropp added. In 2009, U.S. dairy product exports plunged 44 percent, to $2.26 billion, according to USDA data.
U.S. beef and veal shipments to the European Union accounted for slightly less than 3 percent of total U.S. exports by volume and about 4 percent by value in 2010. Mexico was the largest buyer, at nearly 22 percent of total U.S. beef exports by volume.
The EU accounted for about 1 percent of U.S. pork exports by volume in 2010 and about 2 percent of dairy product exports.
Whether a heavily-indebted country such as Greece leaves the euro or the common currency falls apart completely remains to be seen. About 45 percent of 190 money managers in a Bank of America/Merrill Lynch survey said they expect at least one of the 17 member countries to leave the euro zone in the “foreseeable future,” the bank said in a Dec. 13 statement
As agricultural producers and most everyone else keeps a wary eye on Europe, Texas rancher Bill Hyman is taking a sanguine approach. Europe’s woes are just another item on a list of things a produce has to be concerned about but can’t necessarily control, according to Hyman, Executive Director of the Independent Cattlemen’s Association of Texas.
“Cattlemen are always concerned with the economy both domestic and foreign,” Hyman said. “We worry about drought, disease, high feed costs, herd rebuilding, government regulation, animal activists, and now I guess we will worry about the European Union.”