In previous posts, we discussed how increases and decreases in the value of currencies affect trade and the demand for certified translation services. In this post, we look how a global recession combined with inflation set-off a downward spiral in the global demand for U.S. agricultural exports.
The most dramatic change in U.S. agriculture over the past two decades has been the rapid growth in farm exports. In the 1970s, U.S. farmers responded to a boom in the foreign demand for grains with huge increases in production. By the
Mid-1980s, Jacksonville Russian translation workers employed by grain exporters and brokers like Archer Daniels Midland Company (ADM) in the United States were extremely busy as the nation was exporting about a fourth of its feed grains, half of its soybeans, and 60 percent of its wheat, as well as substantial shares of its rice and cotton.
The expansion in export demand during the 1970s was fueled not only by the relatively low value of the U.S. dollar, but by improved economic conditions throughout the world. As on English to French translator worker stated, “Consumers almost everywhere wanted to improve the quality of their diets.” As their personal incomes rose, they demanded more animal protein. Since several pounds of grain are needed to produce a pound of animal products, much more grain was demanded than would have been required if people were consuming cereals in preference to meats.
The U.S. grain export boom ended in 1982, when favorable weather conditions and high price supports induced U.S. farmers to set new production records. Simultaneously, a worldwide recession set .in, prompting a record rise in the value of the U.S. dollar. As U.S. exports became more expensive to foreign purchasers their dollar value dropped. Between 1981 and 1983 total exports fell from $44 billion to $35 billion, contributing to the largest grain surplus in history. Rigidities in the Agricultural Act of 1981 locked the surplus into a farmer-owned reserve for the next three years, only postponing the devastating effect it would have when it finally came onto the market. For the first time in more than forty years, the price of farmland fell. Farmers who had borrowed heavily at high interest rates suddenly found themselves in a financial squeeze.