This is the time of year that farm publications take a swing at what farmers may expect for their businesses in the coming year. So here is a bit of what I’ve gleaned from predictions that farm economist's have made for 2023. We can expect that government aid is going to be curtailed this year, so farmers and agricultural lenders shouldn’t expect congress to come up with more multi million dollar aid programs for farmers in the near future. Dr. David Khol, professor emeritus at Virginia Tech University expects that the higher interest rates of 2022 will continue into 2023, which will impact agricultural producers by increasing the cost of borrowing, and without government aid payments, can farmers remain profitable in 2023? He’s also concerned that if the dollar strengthens, agricultural exports could be reduced, and that would affect crop prices. Economists at the Center for Farm Financial Management at the University of Minnesota point out that a combination of lower commodity prices, higher input costs and a 2% increase in interest rates, could push some producers into negative income territory in 2023. Forty years ago, high interest rates and decreasing commodity prices led to lower farmland asset values that triggered the 1980’s farm debt crisis. I hope we won’t see that happen again in 2023.
The American Farm Bureau Federation recently announced that it had signed a memorandum of understanding with John Deere Corporation that would help farmers and independent repair shops to work on newer John Deere tractors and other equipment. Because of the proprietary electronics an other components on new equipment over the past decade or so, the only way farmers could make even simple repairs, was to take their equipment to a dealership, or depend on a dealer service rep to come to their farm to make the repairs. Often, the expense of transporting equipment to distant dealer service shops or paying for an on farm service call makes the cost of simple repairs several times more expensive than they would be if owners or independent shops were able to make the repairs. Under the agreement, John Deere will ensure that farmers and independent repair shops have electronic access to its specialty tools, software and documentation. The memorandum states that farmers and independent repair facilities will also be able to access and obtain those items on “fair and reasonable” terms. “Right to Repair” legislation has been debated in the U.S. Congress, and has recently been enacted by the New York state legislature. This Right to Repair movement also concerns all kinds of electronic devices and high tech gadgets that often end up in the trash because companies refuse to provide repair parts and technical data to consumers.
The recent snow has bolstered the snowpack in western Colorado, which has encouraged some folks to believe that we finally have drought busting moisture stored in the mountains. But according to the National Resources Conservation Service Snotel Update Report, The Dolores, San Juan and Animas River basins snowpack is almost the same as it was in early January a year ago, both of which were above average for the same date. The Upper Colorado River snowpack in Colorado is also pretty close to what it was in 2022. The National Weather Service long range forecast for precipitation indicates that there’s a 30% to 40% chance that much of Colorado will be drier than normal into March, so let it snow, let it snow.
Aristotle wrote, “To appreciate the beauty of a snowflake it is necessary to stand out in the cold.”
