Outlook for the Ag Economy: Growing CONFIDENCE

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					Outlook for the Ag Economy: Growing CONFIDENCE
Tony Telschow
Northwestern Financial Review; Mar 1-Mar 14, 2010; 195, 5; Docstoc
pg. 10




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Description: The recession rippled into the rural economy last year, reducing exports as well as domestic demand. This hurt the dairy industry and caused additional challenges for livestock operations. But yields on cash crops were generally high, land prices are basically stable and interest rates are not expected to rise before the second half of this year. Ag banks (banks with 25 percent or more of their loans secured by farmland) have "done much better" than other commercial banks in the course of the recession and financial crisis. But that is not to say the rural economy started the year unscathed. USDA estimated a 35 -percent drop in net farm income for 2009. The Chicago Fed said ag bankers in the Seventh District saw credit conditions deteriorate. But new risks may come with modest recovery. Bankers and farmers are expressing their growing concern over federal budget deficits, and more and more people are worried about inflation. They are wanting to lock in some long-term fixed rates.
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