Meyer: Farm Income Part Of Cyclical Cycle

Last week's farm income forecast from USDA reflects what chief economist Seth Meyer calls a cost price squeeze and part of the cyclical nature of farm economics.

“We go through these periods where we have a shock in the market, prices, jump input prices, follow them as farmers do what they do best, which is produce their way through it. Those prices fall and input prices tend to remain sticky. So we go through these periods. We saw it in the 2007-08 period. We saw it in the 2010-13. Period and followed by a number of years of pretty tight margins."

At this week's AgriPulse Ag Outlook Forum in Kansas City, Meyer acknowledged that a tighter margin situation for producers seems to be developing at a faster pace than what he saw during the last forecast in February.  Although, he pointed out market shocks such as those created by the Ukrainian war or global pandemic, could lead to higher prices.

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