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Economist says inflation is still impacting the ag economy

An ag economist says inflation and higher interest rates continue to impact farm profitability.

David Widmar with Agricultural Economic Insights says producers are expected to face additional financial pressure. 

“The Fed is now positioning themselves to raise interest rates as we wrap up 2026 and head into 2027,” he says. “For farmers, that means higher borrowing costs.”

He tells Brownfield inflation has remained above the Federal Reserve’s target rate of 2 percent for the last five years.

“The Iran conflict and the strike in the spring made is obvious that inflation was out of bounds,” he says. “It had actually been decreasing in the second half of 2025.”

The U.S. inflation rate currently sits at 3.4 percent, compared to 2.7 percent this time last year, and is 0.12 percentage points higher than the long-term average.

AUDIO: David Widmar, AEI