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AG ECONOMIC OUTLOOK AS PRESENTED TO THE FARM CREDIT ADMINISTRATION
Jun. 18, 2018
Source: Farm Credit Administration
The Farm Credit Administration board today received a quarterly report on economic issues affecting agriculture, together with an update on the financial condition and performance of the Farm Credit System as of March 31, 2018.
The report discussed USDA's first price outlook for corn, soybeans, and wheat for the 2018 - 2019 marketing year and the implications for both the crop and protein sectors.
For corn and soybean producers, prices are projected to strengthen, boosting profit margins.
For livestock producers, profit margins are expected to decline as rising grain prices drive up feed costs and Southwest pasture conditions deteriorate because of severe drought.
Producers across the farm economy will face stress on cash flows from rising interest rates and higher fuel costs. Higher interest rates and declining cash rents will put downward pressure on farmland values.
In addition, uncertainties regarding agricultural trade policy and the Farm Bill will have a direct bearing on the farm economy.
For the first quarter of 2018, the Farm Credit System reported strong earnings, higher capital levels, and favorable portfolio credit quality. Overall, it is financially strong and remains safe and sound.
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