Farm Credit East has released the cooperative’s mid-year Agricultural Credit Conditions report indicating that Northeast agriculture is in a good position for 2014. While planting got off to a late start this year, farmers have largely made up for lost time and crop production looks back on track.
2014 looks to be an excellent year for dairy, with improved milk prices and lower feed costs, but volatility in commodity prices can be expected to continue. Grain and oilseed prices have declined from last year.
As for the greenhouse, nursery and ag retail industries, consumer demand for products has been stronger than last year. Despite a shaky start to the year, economists are predicting a strong second half of 2014 for the general economy.
At the midway point in 2014, financially sound farm businesses will have no problem with credit availability and Farm Credit East has responded to increased demand for loans from farmers. While variable interest loan rates remain at historically low rates, long-term rates have been moving up from their lows. Modest rate increases are projected in 2015 and 2016.
Farm production costs dipped in early 2014, but have since rebounded, and are now in record territory, squeezing margins for some producers. In this environment, it is essential for producers to watch margins closely and make adjustments necessary to maintain profitability.
“Overall, Northeast agriculture is dynamic and resilient, and has always adapted to both hardship and opportunity. We have strong farmers in our region that create great optimism for the outlook of Northeast agriculture,” said Bill Lipinski, Farm Credit East CEO. “We encourage consumers to actively support local farmers at farm markets, you-pick operations and by purchasing Northeast grown produce in food stores.”
To view the full report, 2014 Mid-Year Credit Situation and Outlook Report, click here.