Commodity prices remain low as farmers complete the harvest, but Iowa State University economist David Swenson says those low prices don’t have as big an impact on the state’s overall economic health as they once did.
“The ag economy and the low commodity prices continue to be a drag on the state’s economy — but it’s important to remember that Iowa’s economy is continuing to expand even though the ag economy has been performing less than stellar,” according to Swenson.
“The overall economy is doing pretty well,” Swenson says, “and so again, it would be great if we had higher commodity prices. But you know, nobody is better at overproducing commodities than the United States.”
Farmers have report better than expected yields this year and that helps them a little with income — but doesn’t help bring up prices when there are good supplies. Swenson doesn’t see the ag situation changing much in the new year.
“In the short run it looks like — for the next year at least — we’re going to see the same thing with the ag economy, depressed prices, excess supplies, and no mechanism to put those prices higher,” Swenson says.
He says he’d give Iowa’s overall economy a solid “B” right now, even with the issues in the ag sector. Swenson says there’s growth in the economy and wages — just not big growth.
(story courtesy of Radio Iowa)