Fortenbery Looks At Key Economic Issues Of New Year
In some ways, 2023 will be very similar to 2022 when it comes to the farm economy. But in other ways, it’s expected to be very different. One of those differences will be the supply chain, which has made strong improvements over the past 3-4 months, removing some of the uncertainty farmers faced last year. And input costs, including fuel and fertilizers have moderated a bit from the highwater marks we saw in spring 2022.
But, according to Washington State University Ag economist Randy Fortenbery, one of the constant themes will be Ukraine. He said not only will wheat production be a looming question, so will exports from the area.
“There's questions about whether or not Russia will continue to allow freight traffic to move through the Black Sea any disruptions in that environment will create a lot of uncertainty that will impact all commodity markets not just what we grow but what's growing other places."
Fortenbery said the behavior of the dollar will also have a big impact on American farmers this year.
“As we've been raising interest rates in the United States to try and battle the inflation pressures, that's been associated with an increase in the value of the dollar. The more expensive the dollar is in the international market the more yen it takes to convert to a dollar or the more Canadian dollars it takes to convert to USD for the less competitive U.S. exports are in the world market and generally that means our market share might decline a little bit. So, the combination of sort of these macroeconomic events, what's happening to interest rates globally, what's happening to interest rates in the U.S. and how does that affect relative currencies will be important.”
He noted the farming community won’t have a better idea of what 2022 was, and what 2023 could be until economic numbers are released in February.
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