The Farm Credit Administration’s board received an update on economic issues affecting agriculture. The U.S. economy has continued to show modest growth through 2024, as gains in productivity support real wage growth and boost consumer spending.
For agriculture, there’s a sharp divergence in returns for crop and livestock sectors that has become apparent as producers enter 2025. Cash grain farmers are seeing lower returns, with average incomes down sharply this year. In contrast, cattle and dairy farms are forecast to see strong income as lower feed costs benefit producers across the livestock sector.
Specialty commodity producers continue to be exposed to fast-growing costs such as labor and interest on farm debt. Farmland values in most regions have been flat in real terms this year. Early indicators find increasing softness in farmland markets as values decline for low-quality land and the number of transactions falls. Premiums for metro-adjacent farmland have risen.
NAFB news service
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