Consumer Slowdown Signals Trouble for Ag Economy

Uncertainty in global trade and falling consumer confidence are warning signs for U.S. agriculture, says Rob Fox, Director of CoBank’s Knowledge Exchange. Declining sentiment is closely linked to reduced consumer spending, a major driver of the overall economy. “When you see confidence levels plummet like we have over the past few months, [you] usually wind up with a slowdown in consumer spending, and that’s almost 70 percent of the entire economy,” Fox said. “It’s almost impossible when you have a pullback from consumers for you not to have a significant drag on the economy as a whole.” Adding to the pressure is unpredictable trade policy, which Fox said leaves agribusinesses vulnerable to rapid shifts in rules and costs. “When policy can be made via tweet at the discretion of the President, that puts businesses in a real tough spot as far as planning [and] budgeting.”