Is the farm economy in a recession?

Another government spending package facing an end-of-month expiration date: the Farm Bill, which has a tremendous impact on agribusiness in this country. 

But the lack of movement on that legislation is just part of what has the farm sector feeling so gloomy. Purdue’s Farmer Sentiment Index hit an 8-year low in August, and half of agricultural economists surveyed by the University of Missouri last month say the farm economy is in a recession. 

One of the economists behind Purdue’s Index, Michael Langemeier, said it’s a pretty good time to be raising livestock, with beef and dairy prices up slightly over last year. 

“Not so much for growing corn or soybeans,” he said — which is how most U.S. producers make a living. 

Input costs for those producers are still high, Lagemeier added. Meanwhile, prices for their commodities have been trending down, and this year’s strong harvests didn’t help. 

“Demand will eventually eat through these very large stocks,” Langemeier said. “It just takes a while.”

Which is why Rabail Chandio, an agricultural economist at Iowa State University, isn’t calling it a “recession” just yet.

“This is routine for ag to go through cycles,” Chandio said.

This downturn follows a few years of record-high farm incomes. “That is what will get us through this downward trend that we’re experiencing right now,” she said.

And, Chandio added, a likely interest rate cut later this month should put farmers in a better mood.