The latest baseline projections from the Food and Agricultural Policy Institute (FAPRI) confirm that price recovery is likely not around the corner. FAPRI-MU director Pat Westhoff says it’s going to be a long stretch, “If you look at our farm income figures we’ve actually got farm income staying near the 2015 level for the next 10 years. We have some recovery in some commodities but, overall, it’s a very dismal picture.”
He reminded those at the Abner Womack Missouri Ag Outlook Conference (Wednesday) that while serious, things are not as bad as they have been, “In the ‘80s we had very high debt to asset ratios, far higher than they are today. So, the overall level of debt in this sector, while very high, is not so high relative to the asset values that we have out there. Furthermore, interest rates are far, far lower than they were in the 1980s. We have very severe problems that are getting worse in the financial sector of agriculture but it’s not the ‘80s.”
He says farmers need to continue to pull back costs and not hold on to their grain for a higher price. Westhoff says although there could be a price spike caused by weather or another event –there’s a “good chance” prices will stay the same “or even drop.”
FAPRI sees some stability in U.S. meat and dairy but volatile in the world market.
AUDIO: Interview with Pat Westhoff