NC State Economist, Drs. Mike Walden and Blake Brown were keynote speakers at Thursday’s Ag Development Forum during the Southern Farm Show at the State Fair grounds. Walden led off the duo speaking to the general economic recovery, and some of the reasoning behind higher commodity prices, explaining that actions by the Federal Reserve are playing a big role:
"There is a line of reasoning that says the more money the Federal Reserve has printed that has been effectively showing up in higher commodity prices. And so, if the Federal Reserve ever starts taking this money back — which they have the power to do, which doesn't look like they're going to do any time soon, but if they did, and a couple of years down the road start taking this money back — that could have an adverse effect on, depending on how you look at it, on commodity prices. That is commodity prices coming down. So this is something for you to keep your eye on."
But, all in all, Walden says, the economy is growing:
"We do see improvement in the economy. Most of the economic dials, not all — but most, have pointed toward the positive, the problem is they haven't pointed very far in the positive direction. Economic growth is slow."
Dr. Blake Brown followed Walden zeroing in on the ag perspective to the overall economy, saying that the falling dollar makes US ag goods more attractive, and then what’s been happening in Brazil:
"Brazil is one of our biggest competitors in the agricultural market their currency has actually been appreciating so it has made US agricultural prices very favorable compared to Braziliam prices."
While theres been ups and downs with more major crops, Brown feels strongly about specialty crops and tobacco continuing to excel:
"North Carolina is a state of specialty crops and so when you talk about things like sweet potatoes, hopefully, we'll continue to see that demand continue; you talk about peanuts where prices are very strong right now; fresh produce… If you talk about the tobacco outlook, I'm cautiously optimistic for 2012 because of some other factors internationally that make it a fairly good outlook for this year…"