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Ag economist says high costs and inflation will likely continue to pressure farm margins

An ag economist says he doesn’t expect input costs to soften anytime soon.

David Widmar with Agricultural Economic Insights says prices continue to move higher.

“Moderating inflation often means that inflation is happening at a slower rate,” he says. “That doesn’t mean it’s going down or retreating. A thousand dollars worth of parts back in 2000 would be about two thousand dollars worth of parts today. More than 50 percent of that inflation has happened in the last five years.”

He tells Brownfield the ongoing conflict in the Middle East continues to increase the cost of goods. 

“It takes a lot of diesel and a lot of energy to move these products around,” he says. “The longer the conflict remains unresolved, the more price pressure that’s going to be on freight. That freight piece is going to be critical to keep an eye on.”

The U.S. inflation rate currently sits at 3.3 percent, compared to 2.4 percent last month, and 0.3 percent higher than the long-term average.

AUDIO: David Widmar, Agricultural Economic Insights