The Upside of a Down Dollar

Nov 1, 2007 12:00 PM, From Editor Karen McMahon

The Offices of Farm Industry News are only a few blocks from one of this country's greatest shrines to shopping — The Mall of America. Lately, this massive mall has seen a surge in visitors from Canada and Europe, about 10 to 15% more. It seems the weak U.S. dollar has made Minneapolis a great shopping destination.

The U.S. dollar is now worth only $0.70 in Europe and $0.99 in Canada. The weak dollar normally causes great concern because some sectors of our economy depend on its being strong. But there is a definite upside to a weak dollar and it has to do with the attractiveness of our goods, including grain and farm equipment.

Who hasn't noticed that grain exports are booming? Surely our weak dollar makes buying U.S. grain more attractive. And agricultural equipment companies are finding more new customers in distant countries like Russia and Japan. Tractors made in the U.S. are less expensive for them now than they were just a couple of years ago.

The ability to more easily sell U.S. grain and goods abroad often creates far-reaching benefits. For example, an ag equipment company selling more product means it can improve its manufacturing efficiencies across more units and lower costs to farmers. And selling more grain helps bolster current market prices.

So when you hear news about a weak dollar, just remember that it's not all bad. A weak dollar just might help you to make a buck.