10/14/08 Economic crisis and its impact on agriculture

Most Americans wonder if Wall Street hit bottom last week or there's more to come. Others want to know how all of this affects the folks who making their living on a farm or ranch. We asked US Department of Agriculture economist Joe Glauber to look into his crystal ball for an ag impact. GLAUBER "We're watching some fairly dramatic events obviously swirl around us and so trying to figure out the overall impact of all this financial crisis, how that will impact agriculture is still uncertain." Like just about everyone else, his guess is as good as yours or mine. Producers have seen prices for most of their commodities spiraling downward in recent weeks. GLAUBER "Returns should be off somewhat from the really high returns that we saw last year." Glauber says if there's one equalizer in all of this it's the falling energy and oil prices. GLAUBER "I think that will be a relief to farmers as we should see prices for other energy related inputs fall somewhat, fertilizer prices in particular." However falling fuel demand will mean less ethanol consumption. GLAUBER "That's right and a lot of that's based on somewhat declining margins because of lower ethanol prices. Corn prices are lower as well." Glauber says right now is appears that bank credit will be available to farmers next spring. Today's Idaho Ag News Bill Scott