Commodity Prices and Exports

As we head into the New Year, agricultural has some challenging headwinds to face —- lackluster exports and lower commodity prices. USDA Chief Economist Rob Johansson shares more details about the 2015 export year facing a strong U.S. dollar.
Johansson: “Just look back at 2014 we were exporting about $151 billion and this year we are expected to export around $131 billion so we’ve lost about $20 billion over the last two years in export value — due primarily to loss of some of our export markets but also due to the fact that a lot commodities are much less expensive than they were in 2014.”
Combine that decrease in exports with the lower prices farmers are receiving and the New Year doesn’t seem to all that bright. Johansson suggests that farmers examine their bottom line and see where they can become more efficient as well as
Johansson: “ Perhaps idle some marginal lands, back off a little bit of equipment purchases. Avail themselves of farm programs more than they would have otherwise. Take out more bank loans.”
One bright spot for farmers who lease ground, may be the decreasing land values
Johansson: “And that will lower cash rents and that will help the bottom line as well for farm producers. The ag economy will adjust but certainly cost of production will remain relatively tight for producers to meet.”