The influence of the value of the dollar on developments in the U.S. farm sector is now widely recognized. Even so, considerable controversy remains over the magnitude of exchange rate effects on agriculture. While this is largely an issue of empirical measurement, there is also a broadly held perception that the conceptual discussion of these effects has been inadequate. In part, this is due to extensive discussion of these effects based on partial equilibrium, often single-market, analysis. The single-market framework imposes tight constraints on exchange rate impacts on equilibrium prices and export quantities. In particular, in a single-market partial equilibrium model, the exchange rate elasticity of price is always less than unity in absolute value.'1 In an important paper Chambers and Just extended the single-market partial equilibrium approach to account for the effects of an exchange rate realignment on all prices in an n-good economy. Their analysis remained partial in the sense that the exchange rate was exogenous and income was held constant. Nevertheless, they concluded that potential cross-price effects in excess supply and excess demand functions make it inappropriate to restrict the exchange rate elasticity of any specific price to the closed interval [1, 0]. The purpose of this comment is to place the analysis of potential exchange rate effects in agricultural markets more firmly in the context of general equilibrium trade theory. The approach presented herein follows Krueger, Chipman (1974), and others in drawing a distinction between traded and nontraded goods. Then the crucial concept is the association of the real exchange rate and movements of disposable income between countries. The xchange rate-which affects the prices of traded goods vis-a-vis the prices of nontraded goods-and relative prices among traded goods adjust jointly to accommodate the equilibrium induced by a trade imbalance. The income movement between countri s is key because it creates a link between exchange rate and price changes that is not considred in a partial equilibrium analysis. Explicit consideration of this link clarifies the role of the exchange rate in goods markets and provides a clearer rationale for the case of a percentage change in a price exceeding the percentage exchange rate realignment.