The U.S. agricultural economy is undergoing a period of moderation, marked by declining commodity prices and persistent elevated costs, particularly in interest rates, which are forecast to remain high throughout 2024.

“Interest expenses are our ongoing headwind,” said Nate Kauffman, senior vice president and Omaha branch executive of the Federal Reserve Bank of Kansas City. “Interest rates have increased sharply. We maybe haven’t seen all the implications associated with higher interest rates yet.”

Kauffman discussed the U.S. farm income outlook and, specifically, recent trends and issues affecting agricultural lending and credit conditions at the U.S. Department of Agriculture’s (USDA) 100th annual Agricultural Outlook Forum Feb. 15.

Despite two years of robust agricultural financial positions, Kauffman warned of tighter farm income...