Agricultural Economics Department

 

Date of this Version

10-29-2008

Comments

Published in Cornhusker Economics, 10-29-08. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska – Lincoln. http://www.agecon.unl.edu/Cornhuskereconomics.html

Abstract

As if the economic environment for production agriculture isn’t risky enough already, we are now heading into an ‘economic headwind’ that few of us could even have imagined just a few short months ago. A global financial system brought to a screeching halt along with massive asset devaluation, has brought the United States and the rest of the world community to a financial crisis unseen since the depression of the 1930s. While policy makers are responding with measures to divert economic disaster, there seems to be little disagreement that we are, in the very least, staring into the face of a potentially long and deep global recession.

For the agricultural production sector in this part of the country, we have in recent years, enjoyed profitable times. And thanks to the more conservative decisions of both lenders and borrowers, we are not experiencing the degree of economic hardship facing many other regions of the country. Nevertheless, serious impacts on the U.S. agricultural sector are still being felt. As seen by the recent down-turns in agricultural commodity prices, we in the nation’s heartland are closely tied to the emerging realities of a global recession that could significantly curtail demand for both food and fuel.