Latin America's Currency Volatility Threatens US Agriculture Competitiveness

The US dollar and Latin American agricultural currencies are experiencing heightened volatility as the Federal Reserve raised its target rate to 3.75%-4.00% on September 16, 2026.

This move is significant for U.S. agriculture because exchange rates can influence export competitiveness, purchasing power in key markets, and the relative position of Brazil and Argentina in global agricultural commodity trade.

The USDA notes that U.S. agricultural exports totaled $171 billion in 2025, while imports reached $212 billion. The main categories of US agricultural exports include grains and feeds, oilseeds and products, livestock products, and horticultural products, which account for nearly 90% of total exports.

The Brazilian real, Mexican peso, Argentine peso, and other regional currencies are showing different paths ahead. Brazil, which now accounts for roughly 60% of global soybean exports, is a major competitor to the US in world markets. A competitive real can improve local-currency returns from dollar-denominated exports.

Mexico presents an entirely different story because it is deeply integrated with U.S. agriculture rather than simply competing against it. The country accounted for 17.9% of U.S. agricultural exports and 20.7% of U.S. agricultural imports in 2025, making exchange-rate competitiveness particularly relevant to the farm economy.