The agriculture department’s annual projections show a slowing economy and lower crop prices for the upcoming year. The USDA also looks ahead to the next decade, showing rising crop yields but a competitive job market. Both inflation and interest rates will slow in 2024, according to preliminary projections from the U.S. Department of Agriculture, while some crop prices are expected to fall.
The USDA puts out annual reports on economic conditions for the coming 10 years — that includes particularly important information for farmers and agriculture policy-makers. In this year’s projections, the department said inflation will increase less than it did in the past year and interest rates will fall slightly. The USDA also projects some important Midwest crops like corn, soybeans and wheat will see lower prices.
Ryan Frieders is a corn and soybean farmer in northwest Illinois who keeps an eye on USDA reports to make decisions about his business.
“I can look at the different datasets and try and think what the best opportunities are for me as a farmer, and also some things that I could maybe think about that might be potential hurdles,” Frieders said.
In Frieders’ view, one potential obstacle will be the labor market. The USDA projects wages will increase over the next decade while the unemployment rate will increase slightly but remain relatively low.
“It looks to be a very competitive labor market coming at us for the next 10 years,” Frieders said. “So it'll be harder and harder for farmers to find that help that they need to get the work done on the farm.”
But there are also plenty of opportunities for farmers. In these new projections, Frieders sees a sign of hope: stability. The USDA is projecting decreasing, then stable interest rates and relatively stable energy costs, both of which are important for farmers, who take out regular operating loans and use a lot of fuel.
That stability is especially welcome after a highly variable past few years marked by the pandemic, inflation, war abroad and supply chain disruptions. Farmers also faced specific challenges, like increasing fuel prices and difficult access to fertilizer and seed.
“It made it harder to plan for everyday operation,” said Andrew Larson, director of government relations for the Illinois Soybean Association.
The last few years also stood out in other ways - 2022 was a record high year for agriculture commodity prices and was a record high year for American net farm income. In the coming years, the USDA is projecting a decrease in crop prices that is essentially a return to normal.
Source: kosu.org
Photo Credit: usda
Categories: Illinois, Crops, Missouri, Crops, Corn, Soybeans, Wheat, Government & Policy, Nebraska, Crops