Positive Future #336 (Feature photo – Cheese – Christian Bauer CCA 2.0 Generic)
According to the USDA, the U.S. is sitting on 1.4 billion pounds of cheese in cold-storage warehouses across the nation. It is reported to be the biggest inventory of cheese since ever.
So what might be the economic drivers that are sending cheese into cold storage and not on dinner plates around the globe?
High on the list are trade disputes between Mexico and China this year – two of the largest buyers of American cheese. Also high on the list are the actions of the Federal Reserve Bank in raising interest rates which thereby cause a stronger dollar. A strong dollar makes American goods more expensive relative to currencies of other nations. When American goods get more expensive due to interest rate hikes, exports flounder and would-be buyers go to other nations.
While most of us have little sway in how trade and interest rates are artificially set, that fact that debate is happening on these fronts is decades overdue.