Is Ag Recession Turning Around? Strong Signs Produce Optimism

April 11, 2018 12:29 PM

As the mainstream economy has continuously seen improvement, the rural ag economy hasn’t been as fortunate. Commodity prices are starting to see a little life and land values are starting to stabilize as possible signs that the agriculture is starting to claw its way out of the recession.

According to Jim Mintert, director of the center for commercial agriculture, there’s two things that need to be examined: tightness of supplies relative to demand and strong usage.

“If we see trend line yields this year, we’re going to see those stocks-to-use ratios tighten even further, so that’s a different environment than we were facing from about 2014 up through ’16, ’17,” he said on AgDay.

With trend line yields, Mintert expects to see higher prices, and prices could be more positive if a weather event happens this summer. While he’s hopeful this could be the end of a long struggle for ag producers across the board, he says “it’s not guaranteed.”

“It’s a different environment than what we were experiencing in 2017 through 2017,” he said. “What that means is from a management standpoint to think about the possibility of that and whether or not you’re positioned to potentially capture that.”

Hear his full comments on AgDay above.

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Spell Check

Kearney, NE
4/12/2018 06:26 AM

  "Happy days are here again! The skies outside are clear again! Happy days are here again!" Wake this guy up! He's dreaming. If cash corn prices move into the $5.00 range, beans into the $12.00 range, and cattle back into the $3.00 per pound range for a 500lb steer, with all of these continuing higher (while input prices are constrained)in the following years I may start to believe that he's on to something. There were periods of good prices in the 1980's, they just didn't last long enough to straighten things out. We have a lot of catching up to do after losing 60% of our income for the past several years, while many of our costs continued to escalate.

Cliff Cummings
Toronto , KS
4/12/2018 06:42 AM

  Where is the Farm economy getting better? Name one commodity that is better now than a year ago. All livestock prices down as well. Fuel ,herbicide, equipment, repairs, and and interest expenses on the rise. A year ago articles said that farm revenue was increasing. Turned out to be not so. And now you talk like Trump telling us how great things are now. When in reality it is definitely worse in all Ag sectors.

Wisconsin Corn Grower
Kewaunee, WI
4/12/2018 08:01 AM

  Talked to the manager of the local coop the other day he has worked for the coop for thirty five years. He told me this is the worst he has ever seen it worse then the 1980's. He said farmers haven't paid for fuel used last fall and now it is time to start spring field work and cannot get financing for inputs. My loan officer told me that this was the year that the ax was going to fall on some of these operations. We need $5 corn $12 soybeans for an extended period of time just to make ends meet and dig ourselves out of the deep holes we have had to dig over the last four years just to stay in business. I don't see this happening any time soon especially with the drop in exports already due to Trump's trade agenda and the assault on the Renewable Fuels Standard. Unless Mr. Mintert has a crystal ball that can see the future I see it getting a lot worse before it gets better.


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