FCA Board Gets Quarterly Update on the Ag Economy

The latest consumer price index data indicates a slowdown in inflation, which has dropped below 3% for the first time since 2021.  The Federal Reserve is expected to begin cutting interest rates this month, while longer-term interest rates have been falling for weeks.

Crop yields are expected to be high this fall, putting downward pressure on prices.  Corn and soybean futures have fallen over 30% in the past 18 months.  And wheat prices are expected to be off last year's prices by 18%.  While the pressure is on crop producers, livestock producers are benefiting from lower feed prices and higher product prices, improving their 2024 profitability.  Strong financial positions from high incomes in 2021 and 2022 have provided a cushion for farmers heading into a more challenging business environment.

However, weak crop margins are set to further erode farm sector income this year.  Portfolio growth in the System showed solid financial results with modest growth in the first half of 2024.

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