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K.C. Fed ag economist remains pessimistic

The chief ag economist with the Federal Reserve Bank of Kansas City remains pessimistic about the ag economy in the near term.

Speaking at the recent Iowa Farm Bureau Economic Summit, Nathan Kauffman stood by his earlier statements that financial stress among ag borrowers and ag lenders could be more pronounced heading into 2017.

“The recent (commodity) price increases, to the extent they’ve been taken advantage of, probably stopped the bleeding,” Kauffman says. “But that doesn’t necessarily change the fundamentals—and for a lot of producers, as they’re looking at their cost structures, a lot of those things just don’t pan out in terms of cash flow.”

While there wasn’t a lot of “forced asset liquidation” this past year, Kauffman says that could change in coming months.

“I think that would be one of the things to monitor closely as we look at the next year,” he says.

AUDIO: Interview with Nathan Kauffman