What is in this article?:
- Challenges ahead for economy
- Agriculture a bright spot
- Stimulus worked
Low interest rates
Interest rates will remain low for at least another year and possibly longer.
The economic ups-and-down affect agriculture, but perhaps not as negatively as they do other segments of the economy. Land values remain strong and represent the one positive in real estate. “Demand for agriculture land is fueled by equity capital returns. Agriculture looks very good in relation to other assets and has remained steady over the past few years.”
Energy will influence the agriculture economy. “Corn and oil are closely related in price, which will be dependent on policy. We can produce enough ethanol to meet demand as long as we have the blend wall.”
Up to that blend limit, 15 percent with a recent EPA announcement — “we can produce to demand.”
Beyond that, Conklin says, are problems with infrastructure for blends such as E-85. “We will be limited until we get a fleet of cars available and also infrastructure improvements including investment in new pumps.”
He said some demand may not be price sensitive. “The military has a big interest in direct-to-hydrocarbon fuels. The military has aggressive goals and economics is not as important. Remember $300 toilet seats?”
He said feedstocks for “drop-in fuels” may come from switchgrass, miscanthus and willows, among other biomass products.