Public Policy Breakout Sessions: Economic Outlook
The biggest wildcard for the economic outlook of Georgia agriculture is trade, University of Georgia Ag Economist Dr. Jeffrey Dorfman said during a presentation at the Georgia Farm Bureau convention. Dorfman, a professor of agricultural & applied economics at the UGA College of Agricultural & Environmental Sciences, provided the economic outlook at the GFB Convention.
“A trade war would be very bad for Georgia. If we get rid of NAFTA, Georgia could gain in blueberries and vegetables, but Georgia would lose in poultry, corn, peanuts and pecans,” Dorfman said. “If we can’t sell to Mexico and Canada, someone else will sell to them. These are the two countries we can sell to with the lowest transportation cost. We could sell our products to other countries, but we’ll make less money because we’ll be paying higher shipping costs. This is why we’ll lose if NAFTA goes away.”
Dorfman said it will be important for farmers to watch their debt in 2018, especially if it’s secured by the high land prices of recent years, and encouraged people to pay off their debt.
“I think land prices are likely to come down in the next one to five years,” Dorfman said. “No one sees commodity prices going back up as they were, so I think land prices have to come back down, but I don’t see it being catastrophic for Georgia.”
On the plus side, Dorfman said he expects a long era of low interest rates because the U.S. is the biggest debtor in the world and we want low rates.
“I can’t tell you your commodity prices are going up, but I can at least tell you your interest rates aren’t going up drastically,” Dorfman said.
Jared Powell, President Trump’s nominee to be the next chairman of the Federal Reserve, has said if he is confirmed by the Senate that he would continue the Fed’s current practice of gradually raising interest rates.
Dorfman said cattle and timber should see good prices in coming years.
“Cattle might be the most favorable [commodity] over the next 20 years because the rest of the world is getting richer and they will eat more meat. This will be good for Georgia poultry and cattle producers.”
Timber should fare well in the coming years, Dorfman said, as millennials look to move out of cities and buy or build houses in the suburbs.