A Squeeze on Agriculture by Interest Rates
With California Ag Today, I am Haylie Shipp. This is the Ag Information Network.
Rabobank’s RaboResearch team recently released its bimonthly North American Agribusiness Review. The report analyzes market conditions and trends in North American agriculture. Roland Fumasi, North American Regional Head of RaboResearch, says interest rates still have ag in a squeeze…
“Interest payments are one of the contributing factors to a bit of pain in the farm economy right now, but that's just one aspect. The major commodity prices, corn and soybeans, for example, are well off the highs that we saw there for a couple of years.”
Let’s cut the doom and gloom and get to the good news…
“We know positive side of that is we know that farmers are coming into this period with strong balance sheets because we did have three good years, including one record year in 2022, in terms of farm income, so that's the positive side of it. Yes, they're going to be giving a little of that back over the next year or two with these subdued commodity prices, particularly on the grain. Probably the most positive story that came out in our report was in the hog space. The hog industry has been struggling to be profitable and not winning that struggle for months now. Finally, the hog industry has returned to profitability. Exports in 2024 so far have been very robust, up about ten percent.”
For more information on the report, go to raboag.com.
