The current economic context implies a high level of market uncertainty. But overall, the farm economic climate is better than expected.
The CME/Purdue “Ag Economy Barometer” reports that U.S. farmers’ sentiment about current and future economic conditions is at its highest since the beginning of the pandemic. High crop yields and recent upswings in commodity prices may be contributing to making things feel better than expected a few months ago.
The latest agricultural credit survey of the Federal Reserve reports that agricultural lenders are also more optimistic about the agricultural economy and credit conditions than they were a few months ago. Bankers seem to be encouraged by the ability of farmers to cope with the situation. And land value indicators have held constant across most of the country, while interest rates on farm loans are at an all-time low.
In line with the perception of farmers and lenders, the latest USDA farm income projections for 2020 are significantly higher than the 2019 farm income measures. All in all, things may not be great, but they are better than expected. Most dairy farms have shown to be resilient. In Wisconsin, the number of operating dairy farms still decreased over the last 12 months, but at a much slower pace than in previous years.
As many dairy farms have displayed their ability to adapt to the new economic reality, leadership and innovation will remain key for them to succeed in this changing and uncertain world. Things are changing fast, and this unprecedented crisis will have long-term impacts, including the effect on customer habits, world markets, employee concerns for health and safety, and our use of technology and its future development.
About the future
Many are talking about 2020 as being a watershed moment, a turning point for many industries. Among the long list of changes brought to us in 2020, which will provide you an opportunity to grab a competitive advantage?
Moving forward, caution will be in order, but some dose of optimism and strategic planning and leadership will be key. There will be a clear advantage for those that have a strong vision and strong planning processes.
Do you know where you want to be in five or 10 years?
Do you have strong planning tools and processes in place to identify opportunities lying ahead and support important strategic decisions?
Do you have a network of peers and advisers to guide you through this turmoil?