Farm economists worry further interest rate hikes will hurt producers
Farm economists fear more interest rate hikes from the Fed will further damage the economy and the ag sector, even if inflation is brought under control.
Federal Reserve Chair, Jerome Powell says that he is committed to further interest rate hikes until inflation is under control, and that has farm economists like Farm Bureau’s Bernt Nelson concerned.
“With the basis point adjustment, we really saw some strengthening happening with the U.S. dollar comparatively to other countries. So, as the dollar increases in value relative to other countries, that makes our products more expensive for these countries to purchase,” Nelson explains. “That could result in things such as a slowing in exports of some of our products, like meats.”
Final data confirms negative growth, for the second straight quarter.
The White House has been hesitant to use the word recession, with others saying it has been the standard industry definition for decades. Either way, Nelson says that it is consumers who are suffering.
“When we start to see these recessions looming, or when we start to see an economic slowdown, we typically see consumers shift toward getting a better deal at the grocery store rather than necessarily purchasing a premium product,” he adds.
Those prices are still going up!
USDA last week revised upward its food price forecast yet again, a trend that has happened nearly every month this year.