Ag economy well positioned despite rising cost concerns
An ag economist says the positives in the ag economy are outweighing the negatives and likely will for the rest of the year.
Ag Economic Insights co-founder David Widmar tells Brownfield while the cost of production for most ag goods are rising…
“It’s still a lower cost structure,” he said. “So, there are strong profits because the costs of production have been slow – they’ve lagged, the commodity price increase, we also have very strong government payments,” he said.
He said while government payments are much lower now than in 2020, they are still above normal.
And Widmar said supply chain issues have mostly impacted imports allowing for continued strong grain exports, noting more than 900 million bushels of corn sales this marketing year.
“For context, that’s above last year’s record pace of 700 million bushels,” he said.
Widmar said soybean prices are around the fifth highest in the last 20 years, even after a 20 percent loss from last year.