Washington, DC
April 3, 2009The
2008/2009 World Economic Crisis: What It Means for U.S.
Agriculture
By Matt Shane, William Liefert, Mitch Morehart, May Peters,
John Dillard, David Torgerson, and William Edmondson
Outlook Report No. (WRS-09-02) 30 pp, March 2009
The world economic crisis that
began in 2008 has major consequences for U.S. agriculture. The
weakening of global demand because of emerging recessions and
declining economic growth result in reduced export demand and
lower agricultural commodity prices, compared with those in
2008. These, in turn, reduce U.S. farm income and place downward
pressures on farm real estate values. So far, the overall impact
on U.S. agriculture is not as severe as on the broader U.S.
economy because the record-high agricultural exports, prices,
and farm income in 2007 and 2008 put U.S. farmers on solid
financial ground. Moreover, the debt equity ratios in
agriculture tend to be more conservative than those in most
other sectors of the economy. There is much uncertainty
concerning the depth and extent of the crisis. The outcomes for
U.S. agriculture are dependent on whether or not there is a
global realignment of exchange rates to correct current
macroeconomic imbalances.
Listen to a
podcast based on this report.
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