Risks Remain for the Global Ag Economy: How Will the Next Six Months Unfold?

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5/15/2023

Ag OutlookInflation and skyrocketing prices captured the most attention over the past few years. Now, three months into 2023, pricing in most areas show signs of cooling. Some uncertainty persists, however, as prices are tested by the ongoing conflict in Ukraine, expected weather patterns in late-2023, economic growth in certain markets, rising interest rates, and other factors.

AEM Business Intelligence highlighted the following current conditions during its Q2 Equipment Market Outlook Webinar:

  • Food Prices Relent: The Food Price Index has receded from its peak in the early part of 2022, as reflected in fertilizer, grain, and soybean prices.
  • Headwinds in the US Market: Interest rates and stress in the banking system create additional risks for the U.S. farming forecast.
  • Slow growth/recession fears: Third parties forecast U.S. GDP growth of 1.1% this year, with a narrow recession taking place late this year or in 2024—emphasis on the word narrow.
  • Other short-term risks:
    • Russia is threatening to exit the Black Sea Grain Initiative, which poses a major risk for grain exports from the region.
    • There is now an 80% probability that El Niño will arrive sometime in the July-September timeframe.
    • Stronger-than-expected demand in China could strain food supplies due to depressed global inventories of grains.
    • Certain indicators, such as the reduction in global grain inventories over the 2022-23 season, suggest that markets will remain tight.

Want to know more about what’s on the horizon for equipment manufacturers and the construction industry they serve? If you’re an AEM member, be sure to attend the upcoming Q3 Equipment Market Outlook Webinar, set for Aug. 3 from 12 p.m. to 1:15 p.m. Register now.

Introducing AEM Market Analyst Craig Frizzell

AEM is pleased to announce a new hire in Craig Frizzell, the association’s new Market Analyst for Business Intelligence. Frizzell brings tremendous knowledge and expertise that will allow him to add value in areas such as research, analysis, and presenting of key data, insights, and trends to support AEM members and AEM’s strategic priorities. 

Frizzell holds a PhD in Political Science and brings almost 20 years of experience providing research, data analysis and data visualizations for a variety of organizations, including a global industrial manufacturer, Washington D.C. political research firm and a financial services corporation. 

Learn More: Contact Your Account Success Advisor

In addition to its quarterly Equipment Market Outlook Webinars, AEM continues to offer a wide range of other market data products, including the AEM Business Intelligence Dashboard. To learn more, contact your Account Success Advisor.

For more industry perspectives, subscribe to the AEM Industry Advisor. 

 

AEM Updates, Agriculture & Forestry

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