This is Not Your Parent’s Farm Economy

Some have compared the current agriculture economy to the dark days of the 1980s.  But is that an accurate assessment?  Steve Gabriel, Chief Economist at Farm Credit Administration says not really.

He told the Washington Ag Network while we are dealing with low commodity prices and a lot of uncertainty, the overall health of the ag economy does not compare to what we saw 30+ years ago.  He said one of the most notable differences, there were several key economic factors outside of the agriculture industry that weighed down on farmers in the early 1980s, specifically, two American recessions in a short amount of time.

“And then we had a strengthening value of the dollar which helped choke off U.S. exports.  So, all of that happened within several years in the 1980s and that was of course after the golden years of the 70s.”

Gabriel added oil prices are much lower today then compared to the 1980s, and farm lending is much more modest today.  While Gabriel said he doesn’t believe we’ll see a return of the 1980s anytime soon, he was quick to say that doesn’t mean farmers shouldn’t be cautious.

“Any disruption to international trade that may occur because of the result of renegotiated trade agreements or other kinds of disputations.  Could be war, or what have you.  There’s a lot going on in the Middle East right now, so we’ve very concerned about that.”

If you have a story idea for the Washington Ag Network, call (509) 547-1618, or e-mail gvaagen@cherrycreekradio.com