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Agricultural Outlook 2023 … Inflation, Recession, Trade and Commodity Coverage from the Purdue Department of Agricultural Economics

January 17, 2023 | Letters

Author: Nicole Olynk Widmar, Associate Head and Professor, Purdue University, Department of Agricultural Economics

As we said last week, “At the end of the day, it’s about the people”. And we’re happy to have a whole crew of people here in our department with specialty areas covering all gametes of economics, markets and agriculture. Each year we take a collective look at the markets and hear from experts in our department about key areas, including the macroeconomy, various commodities and ‘key happenings’ to watch for in the upcoming year. 

The 2023 Purdue Agricultural Economics Report focused on Agricultural Outlook was released just a few days ago. This upcoming year is going to be an active (interesting?) one with the Farm Bill expiring in September, continuing discussions (arguments?) about inflation, and the (here? coming? not coming?) hotly-debated recession. Let’s take a deeper dive into each of these topics…

The Outlook for the U.S. Economy in 2023: The Faster Inflation Falls, the Milder the Recession Will Be by Larry DeBoer, Professor Emeritus of Agricultural Economics – Professor DeBoer surmises that a recession is likely in 2023, but it may have enough confounding factors (e.g., low unemployment) to make it quite mild. 

Trade and Trade Policy Outlook 2023 by Russell Hillberry, Professor of Agricultural Economics 

What Factors will Shape a 2023 Farm Bill by Roman Keeney, Associate Professor – At the end of September 2023, the most recent omnibus “Farm Bill” (passed in 2018) will expire. This deadline for reauthorization is one of a number of factors that promise an interesting 2023 for farm policy watchers.

Food Price Outlook for 2023 by Jayson L. Lusk, Distinguished Professor and Department Head of Agricultural Economics – The U.S. Department of Agriculture Economic Research Service is forecasting a return to something closer to “normal” for food prices in 2023. At present, they are projecting grocery prices to increase between 3% and 4% over the course of 2023.

Dairy Consumption, Production, and Reflections on the Formula Fiasco of 2022 by yours truly –  Anticipated strength in demand for U.S. dairy products have led to raised expectations for 2023 milk prices, now forecast at $22.70/cwt. Total production is expected to increase in 2023, with growth in yield per cow and a slight increase in cow numbers. The infant formula situation in the U.S. continues to be closely watched; imports remain up significantly year-over-year, and we continue to explore the market and policy implications of the situation that developed in 2022.

2023 Purdue Crop Cost and Return Guide by Michael Langemeier, Professor of Agricultural Economics – The 2023 Purdue Crop Cost and Return Guide, which is available for free download from the Center for Commercial Agriculture website, gives estimated costs for planting, growing and harvesting a variety of crops, as well as estimated contribution margins and earnings. The guide is updated frequently. 

2023 Agricultural Credit Outlook By Brady Brewer, Associate Professor, & Todd H. Kuethe, Associate Professor, Schrader Chair in Farmland Economics – Increasing interest rates, higher demand for loans, lower repayment rates and fund availability suggest agricultural credit markets trending downward for 2023.

2023 Farmland and Cash Rent Outlook by Todd H. Kuethe, Associate Professor, Schrader Chair in Farmland Economics – Farmland prices are expected to continue to grow through 2023. Cash rental rates are also expected to increase in 2023.