We talked earlier this month about the state of the agriculture economy. It’s in a serious episode of flux. Volatility has been affecting the market like no other time before. It may be drought or flooding, production issues, geopolitical disagreements, or even economic sanctions that are affecting the markets today. Whatever it is, we always know that what goes up must come down. The question is, will it come down, and if so, by how much?
Nate Kaufman is vice president and Omaha bank executive for the Federal Reserve Bank of Kansas City, and he spoke at the recent Agricultural Outlook Forum, and he told the audience during the presentation that farm incomes are still in decent shape.
Kaufman cited the current rate of land values as a testament to this evaluation.
Even though the markets are good and land values are high, input prices are on the rise. We can see that in any direction that we turn. Fertilizer prices, seed prices, and equipment prices are all eating at the bottom lines of producers. This is why many economists feel that even though the prices and the economy are good at this point, they will probably see a downturn in 2023.
Another factor that is affecting everybody in every aspect of the economy, not just agriculture, is the rise in interest rates.
It is a good idea for every operation to talk with their financial, crop, and insurance advisors to find out the best options they have to have a successful 2023.
