Effectively Using Economic Analysis
Featured in the December issue of our magazine.
Discussion with CoBank Knowledge Exchange Division Manager Tanner Ehmke
WHAT ARE SOME OF THE KEY CRITICAL ECONOMIC ISSUES THAT THOSE ASSOCIATED WITH AGRICULTURE NEED TO UNDERSTAND TODAY?
The key economic issues in agriculture and those affecting the rural economy in our view are rising interest rates, a tight labor market, rising transportation costs, trade uncertainty and persistent weakness in agricultural commodity markets. The pain of rising costs from higher interest rates, labor and trucking are compounded by U.S. trade policies, including tariffs on aluminum and steel that have significantly increased infrastructure costs.
The lack of resolution on immigration issues complicate an already tight labor supply. The trade war with China has also helped depress the prices of some agricultural commodities at a time when farmers and ranchers are already financially stressed. Resolution to those issues would give agriculture some much needed clarity for the future.
WHY IS AWARENESS AND UNDERSTANDING OF ECONOMIC ISSUES IMPORTANT FOR PRODUCERS?
It is important to be aware of economic issues for planning and identifying risks and opportunities that may affect your business or investments. While it’s impossible to know about every potential risk, keeping abreast of the issues reduces the unknowns – and hopefully takes the stress out of planning and creates profitable opportunities.
HOW DO YOU ANALYZE TOUGH OR CONTROVERSIAL ISSUES AND SHARE INFORMATION?
Regardless of how controversial an issue may be, data will reveal facts and useful information for all parties involved. It is the basis of having a productive and healthy conversation.
We also consult with our customers, our internal experts at CoBank and the Farm Credit System, and other industry experts and academia to help understand context of any issue. Our information is shared through our reports and through our speaking engagements with customers, key decision makers and stakeholders.
HOW HAS TECHNOLOGY CHANGED THE ECONOMIC ANALYSIS LANDSCAPE?
Computer software helps us visualize data better and tell the story easier in our reports. Social media also has played a role in reaching our audience and engaging with them about issues.
HOW CAN THE ANALYSES YOU PROVIDE BE USED TO MAKE DECISIONS ON THE FARM AND THROUGHOUT THE SOYBEAN SUPPLY CHAIN?
Our reports are meant to educate key decision-makers, our customers, policymakers and other stakeholders about the risks and opportunities of the major industries affecting the rural economy. In an industry as high risk and as volatile as agriculture, our goal is to leave farmers, ranchers and their supply chain partners in a more empowered and educated position to navigate an uncertain future – and hopefully profit from that knowledge.
Tanner Ehmke is manager of CoBank’s Knowledge Exchange Division. He manages a team of six economists who provide outlooks on grain, farm supply, animal protein, dairy, specialty crops and rural infrastructure, including telecommunications, power, water and energy. CoBank is a member of the Farm Credit System serving vital industries across rural America, including agribusinesses, rural power, water and communications providers in all 50 states.