CoBank has published its 2024 outlook report, which examines the important topics that the organization expects to affect the agricultural and rural economies in the future year.
According to Rob Fox, Director of CoBank’s Knowledge Exchange, although the US economy is currently in excellent health overall, rising prices are projected to continue to have a toll.
Here are the top eight things to keep an eye on in 2024.
- Global Slowdown
Global growth in 2023 is expected to be 2.5%, less than half of the average growth rate from 2000 to 2018. This pattern is projected to persist over the next year. CoBank advises future corporate plans to allow for permanently weaker global economic development. - Prices Continue to Rise
While inflation and the jobless rate are both on the down, higher prices look to be here to stay.
According to the survey, the price of food at home has grown by 25% in the last three years, influencing consumer purchasing behavior. Retail expenditure has declined in all but two months this year, and this trend is projected to continue.
“Consumers are increasingly feeling the pinch of rising food, housing, and other essential goods prices.” People have formed mental expectations about what pricing should be, and those moorings are difficult to shift,” Fox adds. “Consumers are realizing that prices aren’t going back to where they were three years ago and are changing their purchasing habits to cut spending.” This will exacerbate headwinds for the US economy in 2024.” - Government Progress Is Slowing
With razor-thin majorities in both the House and Senate, shutdown deadlines loom. Major legislation, such as the Farm Bill, has made little progress.
While CoBank’s contribution to the Farm Bill may push committees to adopt it before 2025, the election of a new Senate Chair and the inexperience of many members of Congress may stymie progress. - Reduced Profitability As a result of a number of factors
Commodity prices have been affected by high interest rates, a strong US currency, and the US economy’s resilience. Moreover, despite the decline in fertilizer prices, agricultural commodity production costs remain high.
Due to limited stocks and a strong El Nino weather pattern throughout the growth season, CoBank expects agricultural commodities to profit from greater upside price risk than downside price risk in 2024. - An Increase in Soybean Acreage Planned
Soybean acreage is predicted to rise for two reasons: a lower soybean crop in the United States in 2023 and an increase in biofuel demand.
According to the USDA’s early publication of its Agricultural Projections to 2033, planted soybean area will increase 4% year on year to 87 million acres this spring.
Current 2024 futures prices indicate a drop in pricing for the sector, but the prognosis is strongly dependent on the value of the US dollar, wheat conditions in Russia, and South America’s maize and soybean crops. - Livestock Expansion Plans Are Put On Hold
Lower feed prices and local demand could aid cattle profitability, although expenses remain high. CoBank anticipates that the sector will place a strong emphasis on efficiency, technology, and risk management. - Dairy Industry Uncertainty
Price increases for customers may reduce sales growth, yet it is still predicted to expand. International demand will have a significant impact on profitability, and reduced feed prices combined with higher cow productivity should result in increased milk supply to fulfill demand. - Power, energy, and broadband sectors all face challenges.
Commodity markets and energy prices face unpredictability as a result of global conflicts. While oil prices fell by 5% in the fourth quarter, CoBank does not believe this trend will continue.
Broadband investment is continuing to flood into the market. However, owing to a tight labor market, tight finance circumstances, and a complicated permission procedure, it will not be without problems.
Click here to read CoBank’s full report.
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