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Ag’s economic landscape is changing
Declining grain and soybean prices will change the economic landscape for agriculture.
“We’re going to have a lot of yield this year and that’s going to help somewhat with the lower prices—and insurance this year will help to buffer the downturn,” says David Oppedahl, senior business economist with the Federal Reserve Bank of Chicago. “It’s really more next year that the crop farmers are going to feel the full weight of these lower prices, unless something else changes.”
But Oppedahl says most farmers are in good shape financially, with very positive balance sheets.
“Of course, there will be certain operations that maybe expanded a little too quickly and are in a tighter situation,” he says, “and, going forward, working capital is an issue because a lot of farmers have used that up in purchase of either land or equipment—so that’s going to be a key issue, how much working capital you can have.”
Brownfield visited with Oppedahl at the Iowa Farm Bureau Economic Summit in Ames.
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