Think Macro for 2014 Business Strategies

November 26, 2013 06:29 PM

Never before has the outlook for interest rates, exchange rates, government policy and global GDP growth been more important to your bottom line, experts say.

"Macro factors reflected in exchange rates have a huge impact on our ability to compete in world markets," says Frayne Olson, North Dakota State University ag economist.

Assuming the typical value of the U.S. dollar versus other currencies is 100, today it’s trading at 80. "We’re at a discount," Olson says. "That’s really good for exports."

Exchange rates moving forward are an even bigger deal because grain supplies are being rebuilt with stronger global production, and that spells trouble for prices.

"The demand base for ethanol is flattening out, and we’ll see only slow increases in feed demand from livestock," Olson says.

With this year’s better-than-expected harvest, export growth is the one area producers can look to for any hope of higher prices. "Surprise on the demand side will have to come from exports," he says. "Exchange rates are a big part of that."

Olson sees a stable to steadily rising U.S. dollar during the next 12 months. The driver will be stronger U.S. economic growth. "It’s open to debate how fast the U.S. economy recovers," he adds.

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