Is the US on the Verge of Another Farm Crisis?

America Now

With everything that is going on in the world and everything that is facing the economy, there are bound to be sectors that are overlooked. With much of the economic focus on jobs, the Fed’s monetary policy, and the performance of stock markets, areas of potential crisis are growing under the radar. Everyone focuses on the housing sector, the financial sector, and other areas that were of concern during the last financial crisis. But they’re missing a lot that is right under their noses.

One particular area of concern is the farming sector. A few years ago there was some concern at how the price of agricultural land was rising so fast, but since then very little has been written about the agricultural sector.

Last week Agriculture Secretary Sonny Perdue testified before the House Agriculture Committee that farm debt has reached levels last seen during the 1980s farming crisis. The only reason no one is concerned yet is because agricultural land prices remain elevated and interest rates remain low. But rising interest rates could hurt many of those indebted farmers, especially those hurt by the trade conflict with China. If those farmers start to sell their land it could lead to a full-scale depression of land prices and a collapse of the agricultural sector.

The farm crisis of the 1980s decimated rural farming communities across the country, and a similar crisis today could do the same for smaller towns that are already suffering economically. Soybean farmers are already hurting from China’s reduced purchases, and potential future trade conflicts with China and with the European Union could harm even more farmers.

When farmers start to go under so do their banks, so there are undoubtedly a number of small and regional banks sweating the possibility of a continued slowdown in agriculture. This is an area to keep an eye on, particularly if you’re an investor in agricultural commodities or in agricultural land. It may not be on most people’s radar screens, but it still could have a dramatic effect on the US economy.

Is the US on the Verge of Another Farm Crisis? was last modified: February 28th, 2019 by Louis J. Wasser

This article was originally posted on Red Tea News.

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