KC Fed executive expects rising farming costs

The Kansas City Federal Reserve Bank’s Omaha executive says he expects farming overhead costs to rise heading into harvest and beyond. 

Nate Kauffman points to inputs like fertilizer and…  

“Land values in our region are about 10 percent higher than they were last year and it seems likely then that cash rents will, to some extent, track land values over time as well,” he said.

Kauffman’s region includes Nebraska, Kansas and part of Missouri.

The KC Fed says interest rates have risen so far this year but remain relatively low. Kauffman said there has been a broad increase in inflationary pressure partially because of supply chain disruptions as the economy reopened but… 

“The general view going forward is that with some stabilization in economic activity and demand, that we would start to see a bit more stabilization in some of those inflationary pressures,” he said.

Nate Kauffman Interview

The KC Fed said its outlook for the ag economy remains strong for the rest of 2021 but Kauffman cautions growers that managing production cost will be important even with expected strong grain prices. 

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