Inflation Rising
From the Ag Information Network, I’m Bob Larson. Inflation was up in July. A rebound in energy and travel costs led to the first jump in consumer prices in over a year, as inflation accelerated by just over 3% from a year ago.
And the news from the Bureau of Labor Statistics was not good for producers, big energy consumers who saw a 7% jump in fuel prices from June.
American Farm Bureau Chief Economist Roger Cryan …
CRYAN … “All these ups and downs are concerns. Farmers face so many risks, weather risks and price risks and blight. There are so many risks that farmers face. We worry about every one of them.”
And Cryan says, farmers have to pay the going price for inputs because nothing gets done without fuel …
CRYAN … “When it’s planting season and harvest season, they’ve got to pay the price today, and that’s a big expense for farmers. One of the biggest.”
Another is the cost of borrowing …
CRYAN … “The rates right now are very high, the highest they’ve been in over ten years. Actually, the highest they’ve been in about 15 years. So, with these higher rates, farmers are going to be facing higher costs of credit in the short run, and we’re worried that we’ll be talking about the burden of debt in the years to come.”
Cryan blames the Federal Reserve for tightening credit too much, saying farmers are paying 7, 8, and 9% for operating loans, well above the rates of just a few years ago.
