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Tight margins ahead for 2024

A senior vice president with Farm Credit Service of America says farmer liquidity remains high to start the year despite some bumps in the protein sector.

Fallon Savage tells Brownfield, “Our swine market in particular has seen some pretty devastating losses over the last six to seven months and the beef sector is starting to cool down significantly the last couple of months as well.”  “But as we think about 2024, in general, balance sheets are the strongest they’ve really ever been,” she shares.

But she says margins are likely to be compressed because of high expenses and pencils need to be sharp when finding breakevens.

“Where do they want to spend their capital? Because ultimately, sometimes the profitability may not necessarily be there for 2024,” she says.

Savage says farmers who own their land and have limited debt are in the best position to make future investments in the coming year.

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