The vote by Britain to leave the European Union had an immediate impact that can be felt by U.S farmers — lower futures prices for corn, soybeans and wheat during overnight trading, along with a stronger dollar that would make U.S. exports less competitive. The decision could affect U.S.-EU trade negotiations and the future of neonicotinoids, the pesticides blamed by activists for the plunge in honeybee populations.
“Oh dear,” said Agrimoney, based in London, in an unusually personal introduction to its first commodity market report of the day.
In Kansas City, hard red wheat futures sold at the lowest price since April 2006, said Agrimoney, while in Chicago, corn for delivery in July dropped by 2.3 percent; the December corn contract also was down by 2.3 percent. Soybean futures fell by 1.3 percent, whether for delivery this summer or after the fall harvest. Meanwhile, the dollar gained 1.7 percent in value, “benefiting from its safe-haven status,” said the London news and analytics site.
It will take years for Britain to withdraw from all EU ties, said Vox, and in the near term, “uncertainty about Britain’s relationship with Europe, its largest trading partner, could push the UK into a recession.”
The British decision could create a new barrier to the slow-moving U.S.-EU negotiations for a free-trade agreement. In the agriculture sector, the two sides disagree on GMO crops, U.S. meat production practices and Europe’s unflinching demand of ownership of food names such as Parmesan cheese. British farm policy was more in tune with the United States than the rest of the EU.
The largest farm group in England, the National Farmers Union, “may get one wish from Brexit: The scrapping of a ban on pesticides that harm bees and other crucial pollinators,” said the Guardian, referring to neonicotinoids, also under fire in the United States. “The NFU and UK fought that ban, but the collective will of the EU saw it put in place.”
“The short answer to what happens next with pollution, wildlife, farming, green energy, climate change and more is we don’t know — we are in uncharted territory,” said the Guardian. “But all the indications — from the “red-tape” slashing desires of the Brexiters to the judgment of environmental professionals — are that the protections for our environment will get weaker.”