News

Energy markets creating both headwinds and opportunities for farm economy

An extension ag economist is watching how the energy complex is influencing the farm economy.

Chad Hart is with Iowa State University.

“I think about the crude oil market, we have seen some softness there that is both opening up opportunities for agriculture, but also representing some challenges. For example, the challenges here would be as crude oil prices especially sag, gasoline prices do (too). That puts pressure on biofuels to keep prices low in order to match.”

He tells Brownfield that limits potential growth for ethanol and biodiesel facilities.

“But it’s also saying there’s opportunities there because as people are spending less on energy, that’s opening up income that can be used in other ways. And I think that’s partially what’s helping drive what we’re seeing with protein.”

Hart says energy markets are an indicator of how demand for products can change quickly.