US pork and other agricultural exports could suffer due to Brexit-driven currency fluctuations and a slow down in global economic growth, according to a University of Illinois at Urbana-Champaign report.
By driving up the value of the dollar, Brexit could make US pork less attractive to international consumers, the report found. Meanwhile, a devalued euro could make pork exports from the EU more attractive.
Europe does not import much US pork. Just 0.2 percent of US pork exports went to EU countries in 2015, according to the paper. However, both Europe and the US compete for some of the same export markets.
“The 28 member countries in the European Union have been the largest exporters of pork in the world for the last two years,” the report reads. “Brexit gives [the US’s] biggest global pork competitor a sizable and immediate price advantage.”
In the week following the UK’s leave vote, dollar values have climbed by 3.5 percent against the euro.
While impact on the US pork market could be almost immediate, the long-term effects on the international economy could also hurt long-term demand for all US agricultural exports
“If Brexit does slow world income growth, that could be negative for global sales of pork and other US agricultural products,” the report found.
US pork producers are already facing further price drop expectations, volatile feed costs and uncertainty over demand from China.
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