Right now central banks around the world are taking unprecedented measures to keep interest rates pinned near zero. In fact, in many parts of the world interest rates are now negative!
We don’t see indications sharply higher interest rates are imminent. Still, we urge all readers to consider what could cause either short- or long-term interest rates to turn higher. Decisions involving debt need to consider not just the current situation, but also scenarios for what may lie ahead.
Below are a few things to think about when assuming interest rates will stay low for years and years.
As market analysts, our toolbox contains quite a few tools that give us insight into the markets and help us make recommendations. These include futures charts, cycles, crop reports, weather reports, world fundamentals, Canadian markets, input from local grain traders and seasonal odds.
Every now and then, we read something from the UN and other organizations about the hopelessness of feeding the world. We also periodically see complaints about high food prices.
Those of us involved with farming are well aware of the ideas promulgated by some members of the media that population growth will outstrip farmers’ ability to produce food. We recognize too, that millions of people have been moving toward income categories that allow for higher protein diets in developing nations which could mean more demand for the food we produce, especially meat. The past several years have ushered in increased media coverage about these issues, raising questions as to whether farmers will be able to meet the seemingly insatiable demand.
One goal of the DePutter Market Advisory Service and the Ag-Alert service is to help our clients understand the price and profit cycles of agriculture. It can be valuable to recognize the signs and signals that identify the major highs and lows, because this can help you make business plans that fit the long-term swings in prices and profits.