AFBF: Current Financial Crisis Will Impact The Ag Industry

The American Farm Bureau Federation (AFBF) in a recent a financial analysis said the current financial crisis could moderate global and domestic demand for U.S. farm products and intensify an already volatile price situation for both commodities and the supplies that farmers must purchase, USAgNet reports. Overall the nation’s agricultural balance sheet is strong, although the situation is variable among individual farmers and changing credit conditions will impact the agricultural landscape, AFBF said.

“The fallout from the general financial malaise is being felt worldwide, especially in countries that may be already facing slowing economies due to the high price of energy,” according to AFBF economist Terry Francl. “This will most likely moderate the demand for agriculture products and ingredients, reduce the demand for U.S. agricultural exports and ultimately affect U.S. farm prices. Likewise, a slower domestic economy would also weigh on the demand for farm commodities and prices.”

The crisis is also impacting how far farmers can extend themselves financially because the cost of credit has risen as the credit supply has been impaired, AFBF said. ❖