Managing Through A Tough Ag Economy
Tim Hammerich
News Reporter
Inflation and high interest rates were the story of the ag economy in 2023, causing many people in the ag community to wonder what the rest of 2024 will look like. David Widmar, managing partner at Agricultural Economic Insights says he doesn’t think it’s realistic to expect low interest rates any time soon, but we have seen cycles like this before.
Widmar... "I don't think anyone's out there projecting us to go back to this super low-interest rate environment that we enjoyed between 2010 and 2022. You know, human beings can be funny about how we anchor things. And I think a lot of us have anchored this low interest rate inflation in period to just the last two years. But if you step back a little bit, you realize that really, since about 2010 has been this very low, very stable interest rate environment. And so we've been in this bathwater for quite a while and it feels pretty comfortable. How are we going to start to transition out of that? And I'm not talking about 1980s level situations, which is 18 percent farm level interest rates or higher time about five, six, 7%. We've been there in the late 90s and early 2000s. We might have forgotten how we were managing our businesses and using debt and managing our balance sheet assets. So let's revisit that and think about that."
Learn more about economic trends and the short-term outlook at aei.ag.
