Fears of higher rates and weakening economic conditions linger over the year’s second half.

Effects from the pandemic and Ukraine war continue to reverberate through the global economy. Food and energy prices remain high, though prices for underlying commodities have lost upward momentum as economic fears rise. The Federal Reserve is poised to raise rates until it believes inflation has been tamed. Unfortunately, the risk of over- or under-doing it is high given that the lag time between action and reaction in monetary policy can be long.

Supply chains are still a mess. Warehouse capacity is still hard to come by and inventory is expensive. But transportation costs have slipped since Q1, offering a glimmer of hope of more efficient days to come. Container shipping has become cheaper but conditions for agricultural transport are mixed. Rail, truck, barge, and vessel costs remain stubbornly high and capacity limited.

Read more in the Q3 Rural Economic Review from CoBank

Disclaimer: This material is for informational purposes only and cannot be relied on to replace your own judgment or that of the professionals you work with in assessing the accuracy or relevance of the information to your own operations. Nothing in this material shall constitute a commitment by American AgCredit to lend money or extend credit. This information is provided independent of any lending, other financing or insurance transaction. This material is a compilation of outside sources and the various authors’ opinions. Assumptions have been made for modeling purposes. American AgCredit does not represent that any such assumptions will reflect future events.

This quarterly update is prepared by CoBank’s Knowledge Exchange Division.