Economists been predicting it for a few years now, but there has been no recession. That doesn’t mean things have been easy for ag producers over that time.
Steve Nicholson, strategist with RaboBank, says the key now is that there are still jobs available.
“Until we see, in my mind, until we see a pullback in jobs created or the opportunities for jobs, it’s going to be very hard to go down a path of a recession,” according to Nicholson. “The fed may have engineered the classic soft landing. That’s I think yet to be seen, but it’s remarkable how resilient the U.S. economy has been.”
The Fed, Nicholson says will likely continue to play it down.
“So I think they’re going to be reluctant because of both political pressure to move rates up, to say that they’ve put their thumb on the scale, but at the same time, take them down too much, with their thumb on the scale, I think they’re going to try to have a fairly quiet year because, we all know that, politicians will criticize them or praise them depending on what actions they take and how that fits into their political narrative,” he says.
When it comes to the next Farm Bill, Nicholson says our economic worries and the fact this is an election year just may add to the challenges.
“Well, I hope they don’t put it off for another year, let’s say that,” says Nicholson. “You know, you’ve got two challenges there, one you have a Congress that’s not focused on anything, and a Congress that’s not functioning very well. You know, they’ve got budget deadlines that are coming up and USDA is on that first list of agencies that would get shut down. So that’s not a good thing. And, oh yeah, it’s an election year for them and I think it’s a coin toss that we could get it.”
But Nicholson says there are some incentives to getting a new Farm Bill introduced and passed.
“Keep in mind, in the politics of it, Sen. Debbie Stabenow (D-MI) is retiring. She is the chairman of the Senate Ag Committee, and she would love to be able to send one of her legacies out the door and get the Farm Bill over the line. So, there are political pressures on both sides of that issue,” he says.
But, Nicholson adds it needs to happen soon.
“Yeah, that would be my concern too. I’ll be a little more optimistic for the first half of the year. I think it’ll be really difficult to get it done, certainly, the second half of the year.”
The existing Farm Bill—which was extended beyond its original deadline of Sept. 30, 2023—is now set to expire on Sept. 30, 2024.
Source: NAFB News Service.
