Economist paints macro picture for ’21
An ag economist says there are several moving parts impacting the farm economy coming out of the pandemic.
David Widmar says many markets will see deceptively large growth this year. He points to markets like ethanol that took hits because of the pandemic.
“For the second quarter of 2021, it’s going to be measured off those lows so that can make it feel like it’s really big growth. We’ve got to keep in mind, where is this growth relative to overall activity and total dollars relative to prior to the pandemic?”
He says the magnitude and duration of inflation will also have an impact on consumer costs.
Widmar tells Brownfield while interest rates are at historic low levels, long term rates are rising.
“Producers should keep an eye on longer-term interest rates. That’s, of course, an important metric if we’re thinking about financing farmland or refinancing farmland. Those have been turning higher in the last three or four months.”
Widmar says supply issues will also add pressure into the broad market as consumer demand returns.