Exchange rates between currencies determine how a price of imports or exports stated in one currency is converted into the price in another currency. So for example, a navel orange that costs one US dollar may cost 1200 Korean won. If the value of the dollar rises by 10 percent relative to the won, the same navel orange that still cost one US dollar may cost the Korean buyer 1320 won. Changes in exchange rates can affect patterns of imports and exports by changing the competitiveness of products from different countries. Exchange rates of the US dollar with each of dozens of important currencies affect competitiveness of US agricultural products in the United States and in export markets. Because different commodities are sold in different foreign markets and face competition from different foreign suppliers, which exchange rates are most important differ by commodity. The University of California Agricultural Issues Center (AIC) calculated exchange rate indices for important "California" commodities that are weighted by a particular commodity's pattern of imports and exports. Each exchange rate index is constructed by taking trade-flow weighted averages of bilateral exchange rates between the US dollar and a selected bundle of other commodities that differs by commodity. The USDA Economic Research Service publishes such indices on a regular basis for commodities or major commodity groupings that are particular interest to the nation as a whole. AIC addresses commodities that are particularly important to California trade. The export commodity mix for California is different from that of the rest of the United States so the exchange rate indexes of interest differ. In the figures and tables presented, an increase in the trade-weighted exchange rate index for an import competing or export commodity means that the dollar appreciated against the currencies important for that commodity's particular trade pattern.

Export/Import Trade-Weighted Exchange Rates

for selected California export crops
January, 2000 - Current

for selected California import crops
January, 2000 - Current

Source of Real Exchange Rates: International Financial Statistics of the International Monetary Fund and Financial Statistics of the Federal Reserve Board.
Source of Trade Data: United States International Trade Commission