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Effects of a slowing economy on rural America

Photo by Riley Smith

The U.S. economy will progressively slow through the first half of this year, and recession fears are still high and warranted. That assessment comes from CoBank, which also says inflation is starting to loosen its grip on farm country. Rob Fox, director of CoBank’s Knowledge Exchange Division, said that, while a slowing economy does mean that impact of inflation is expected to diminish, that also means crop prices- and to a lesser extent, livestock prices- that producers receive in 2023 will be weaker when compared to the previous two years.

“As those geopolitical concerns kind of simmer down and, assuming we don’t have any nature droughts in the world in the coming year, which is a big assumption, we’re looking at crop prices to come down quite a bit, meaning 2023 should be a fairly decent year,” Fox said. “Profitable, but not at those near-record levels.”

When it comes to input costs, Fox said he expects many of those prices to drop in the coming weeks and months.

“Those fertilizer prices are going to be easing, in general energy prices are going to be easing, interest rates are near their peak right,” Fox said. “So that may be something to think about as you make investment choices or determine you know maybe locking in interest rates, or not.  You know, I think we’re not going to go much higher than we already are.”

For more information, visit cobank.com.