Interest Rates and Strong U.S. Dollar Pressures Ag Economy

The combination of high interest rates and a strong U.S. dollar is having a significant impact on the farm economy. According to the new quarterly report from the CoBank Knowledge Exchange, the United States is also facing sizable export competition from Brazil and Russia. High barge freight rates are also pressuring basis levels on the Mississippi River. Fed cattle prices are up 30 percent over last year and consumer demand remains strong. CoBank cites California’s Proposition 12 as a major issue for pork production. Class III milk prices bottomed out much lower than the five-year average, but the forecast is improving for the fourth quarter.