Brexit could unleash 'dominoes' in ag markets

Date:07-07-2016

The withdrawal of the United Kingdom from the European Union could “unleash a series of dominoes” across ag markets, says Mike Steenhoek, executive director of the Soy Transportation Coalition.

“Where the end of that leads, it really is up to debate,” Steenhoek tells “Top Producer Podcast” host Pam Fretwell in an interview airing this week on My Farm Radio and Apple’s Podcast app. “But the net result is greater unpredictability.”
Producers likely will see the implications of Brexit in the form of market volatility and competitive challenges for ag products abroad.

“Capital will flee to [what are] perceived to be safe havens, and the U.S. dollar is certainly regarded as one of those safe places to park one’s money,” Steenhoek says. “All that does is increase the value of the U.S. dollar compared to other currencies. [It] diminishes our competitiveness to export to our international customers.”

The need to unite after two world wars led Europe to begin the discussions that eventually formed the E.U., Steenhoek says, and a variety of factors led to the requested dissolution by the U.K.

“If you were an industry or if you were an individual, let’s say in the United Kingdom, and really took exception to a decision that was made in Brussels, one of the frustrations is a) with the decision itself, but also your inability to have access to petitioning that process,” Steenhoek says. “It’s not just a matter of going to lobby my member of Parliament. The Brussels government really wasn’t as responsive to those various member countries. People regarded it as kind of insulated.”