Farm Economy
The Federal Reserve has four more chances this calendar year to cut interest rates. Since July 2023, the system has kept its benchmark interest rate steady at a 23-year high of 5.25% to 5.5%.
The barometer reported its lowest reading since May 2023, falling seven points from December and 24 points from January 2023.
Ag economists’ views on the ag economy took a dive in the first Ag Economists’ Monthly Monitor of 2024; however, relatively strong balance sheets and working capital could provide a cushion for 2024.
Joanna Carraway is the 2013 winner of the Tomorrow’s Top Producer Horizon Award.
Noted ag economist Dr. David Kohl forecasts tighter margins in the year ahead and emphasizes the need to globalize and future-proof operations.
If Congress doesn’t pass stopgap funding, crop production and progress reports will probably stall. That won’t bode well for markets. “Usually it means that we’ve got some selling pressure ahead,” says one analyst.
There’s a new record farmland sale on the books. After a 15-min. bidding war between two area farmers, the gavel fell at $34,800 per acre, which is $4,800 more than the previous record set in November 2022 in Iowa.
Sixty-five percent of farmers surveyed in July expect interest rates to climb in the next 12 months. On a positive note, 7 out of 10 said they expect farmland cash rental rates to remain roughly the same for 2024.
For 2020, total farm lending was $98.6 billion, a slight decrease from 2019.
The rural economy keeps chugging along, according to the Creighton University Rural Mainstreet Index. For the ninth straight month, the RMI has stayed above growth neutral.