U.S. Agricultural Economy: Farm Profitability Expected to be Strong

The biggest problem for farm margins heading into 2024 is the elevated cost of production. While fertilizer prices have fallen, other costs of production remain stubbornly high. However, ag commodities will benefit from more upside price risk than down in 2024. Global grain and oilseed stock inventories are tight by historic measures and the northern hemisphere will likely have a strong El Nino weather pattern during the growing season for the first time since 2015. The dollar should continue its recent decline and global demand should return to its long-term growth trend.

EDITOR’S TAKE:

Interest rates have been a top concern for farmers/ranchers headed into 2024. All indications point to the Federal Reserve lowering them sometime during the year, which will boost morale even further down on the farm. Expectations also point to improving commodity prices and, when coupled with even average weather and yields, ultimately resulting in improved farmer/rancher results at the end of 2024. So, be prepared to offer your best deals to farmers/ranchers who will be looking for new vehicles throughout the year.