By Illinois Radio Network
SPRINGFIELD – While a growing U.S. economy means a stronger U.S. dollar, it could cause a decline in agricultural goods being sold to foreign buyers.
Last year, the U.S. dollar had a higher value relative to other currencies than it had in more than a decade. But a stronger U.S. dollar means other countries have to pay more for U.S. products. Iowa State University economics professor Dave Swenson explained this can cause too much supply that won’t end up being sold.
“It takes more of their currency to buy what we’re trying to sell,” said Swenson. “So you’re going to end up with supply that you’re unable to move.”
Swenson says a stronger economy means less sales will be made in agriculture. This means less money in the pockets of farmers, which will slow down rural economies in central and southern Illinois.
“When the dollar rises people’s willingness to buy a commodity that’s priced in dollars, like grain and oil and any other commodity that’s produced in the United States starts to go down, and they buy less of that commodity,” said Swenson.
Illinois Department of Agriculture numbers indicate the state’s grain markets export more than $8 billion to other countries each year. Approximately 44 percent of the grain produced in Illinois is sold for export.
