When prices are low for a storable commodity, agents (farmers or intermediaries) can wait for higher prices to sell. Of course, there is a carrying cost to storage for many commodities, like soybeans (deterioration of stock, direct storage costs, opportunity cost of capital tied up in commodity). Hence, while storage can mitigate losses, it does not necessarily eliminate economic losses that arise from persistent tariffs.
A Post in Which I Thank Donald Trump: Pork Chop Edition
I don’t pay close attention to prices of groceries, but the other day, I saw the price of pork chops and said to myself “darned if that isn’t remarkably cheap for pork chops.” So tonight’s dinner has inspired me to give thanks for DJT’s actions.
Call for Papers: West Coast Workshop in International Finance
Submission Deadline: August 17th, 2018
The 7th annual West Coast Workshop in International Finance will be held at the University of California, Santa Cruz on Friday, November 9th. (Past workshop agendas can be seen here.)
Acres Burned to Date
Not a record year, yet.
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2017 Export to China Dependence, by State
Using Census and BEA data, one can assess at least in first order terms, what states will be impacted by tariffs against US exports — as well as the CNY depreciation that has occurred in the last few months.
As the CNY Goes, East Asia Goes…Maybe
For whatever reasons — capital outflows, PBoC non-intervention — the yuan has depreciated substantially since the Trump administration has announced Section 301 actions against China. This has implications not just for the CNY/USD exchange rate, but also other East Asian currencies.
EconoFact: “Threats to U.S. Agriculture from U.S. Trade Policies”
EconoFact, today:
The agriculture sector in the United States depends upon exports for its vitality. Sales of U.S. agricultural products abroad are responsible for 20 percent of U.S. farm income, supporting more than one million American jobs on and off the farm, according to the U.S. Department of Agriculture. The three biggest buyers of American agricultural products are China, Canada, and Mexico. Yet trade with these three countries faces heightened uncertainty. The Trump Administration is in the process of renegotiating the North American Free Trade Agreement (NAFTA) with Canada and Mexico, which includes the option of exiting the deal altogether. In addition, the United States imposed a number of sanctions on our other trading partners, including China. These sanctions have spurred retaliation that has already harmed some agricultural exports.
Who Is Kudlow?
Is he Willoughby or is he Hillenkoetter, or neither?
Comparing MN and WI along Five Variables
In a recent paper, Ryan LeCloux and I use five macroeconomic measures to assess state economic performance (post). Here, I use updated data to evaluate Minnesota’s economic performance vis à vis Wisconsin: GDP, personal income, nonfarm payroll employment, civilian employment, and coincident indices and “adjusted” coincident indices.
The Wisconsin Macro Outlook
The June coincident index flattens out; the leading index, released today, predicts a 1.1% growth over the next six months. Minnesota’s forecasted growth is over twice that rate.