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Outlook for the ag economy points to most expensive crop ever

Many in the ag industry are concerned the 2023 crop could be the most expensive ever raised.

Nebraska farmer Ed Lammers tells Brownfield he hasn’t made many changes to his risk management plan even though inflation and interest rates continue to increase. “Your equity or the amount of money you have to put it in the ground is going to be challenging. I borrow money to put that in the ground. That raises my input costs.  That higher interest rate will be an added cost.”

Chief Economist with Farmers Business Network Kevin McNew says recent interest rate hikes have been bad news for producers. “I think we’re going to see more pain as a result.  The US dollar probably gets stronger because of the strength in the interest rates, which could be a downgrade on commodity prices.”

Speaking with Brownfield at the Commodity Classic, he says farmers should invest in new technology to help improve margins. “We’re seeing so many cool new technologies that help reduce chemicals, fertilizers and all those kinds of things.  I think that’s where farmers should be thinking about long term strategies.”

McNew says early adopters who utilize technology and invest earlier have a higher return on investment than producers who wait to adopt them despite higher costs.