Transcript How Things - eXtension

Everything
Depends on
Everything
Else
Everything Depends
on Everything Else
Can an import tariff on fertilizer in the
Ukraine affect the price of cotton in India
and the price of chicken in the United
States?
Increase or Decrease?
A severe drop in fertilizer use, caused by an
import tariff in Ukraine, the so-called “breaddecrease
basket” of the former USSR, will ___________
the quantity of wheat available to Ukraine.
Increase or Decrease?
If the government of Ukraine then
buys wheat from U.S. grain dealers,
the price of U.S. wheat will
increase This will __________
increase
___________.
the cost of flour to U.S. millers and
increase the cost of bread in U.S.
__________
grocery stores.
Increase or Decrease?
increase the cost to
It will also __________
India of purchasing wheat from the
increase the
U.S., which will ___________
demand in India for domestically
increase its
produced wheat and ___________
price.
Increase or Decrease?
increase the demand for
This will __________
land by Indian wheat growers and
increase the cost of growing
thus __________
cotton on land that is also suitable
for wheat production.
Increase or Decrease?
decrease the quantity
This will ___________
increase the
of cotton produced, __________
increase the
price of cotton, and __________
cost of purchasing cotton clothing.
This will ___________
increase the demand
for wool.
Increase or Decrease?
Meanwhile back in the U.S., the
demand for land suitable for wheat
increase which
production will __________,
increase the cost of growing
will __________
feed grain for cattle.
Increase or Decrease?
decrease the quantity
This will ___________
of cattle grown and cause beef
increase This will
prices to __________.
increase the demand for chickens.
Increase or Decrease?
A fertilizer tariff reduces the Ukraine wheat crop.
Ukraine buys wheat from the U.S. driving up the price
of U.S. wheat.
That increases the price of wheat India buys from the U.S.
That drives up demand and price of Indian wheat.
The higher price encourages Indian farmers to plant wheat
instead of cotton.
This reduces the amount of Indian cotton grown and
pushes up the domestic price of cotton products
thereby increasing the demand for wool products.
Wheat production increases in the U.S., increasing the cost
of producing grain for beef production.
The higher-priced beef at U.S. stores increases the
demand for chicken.