By Justin Walker
Communications Specialist

The national cooperative bank, CoBank, released “The Year Ahead: Forces that will shape the U.S. Rural Economy in 2018” report, identifying 10 key factors that point to a mixed, but improving, outlook for rural America.

The report, released by CoBank’s Knowledge Exchange Division, anticipates an expanding global economy, strong U.S. consumer confidence and persistent economic recovery, but also expects lingering financial stress from low commodity prices to cause another year of on-farm belt tightening.

“The rural economy is uniquely impacted by what happens in Washington, the broader U.S. economy and around the world,” Dan Kowalski, vice president of CoBank’s Knowledge Exchange division, said in a news release. “In the coming year, rural America will rise with the broader economic tide, but it will also contend with persistent barriers to prosperity.”
The global economy is gaining momentum, but the challenge, according to CoBank, will be properly managing the expansion.

Another factor is rising interest rates, which the report said will continue to rise with larger fiscal deficits and extensive leadership transitions within the Federal Reserve.

CoBank also believes consumers feel wealthier, predicting business investments will rise this year to keep up with strengthening demand as consumer confidence and the unemployment rate are at their best levels since 2000.

Rural jobs and incomes, however, have been slower to rebound. CoBank believes efforts to improve rural access to broadband will be influential and offer the greatest opportunity to make a bridge the rural-urban economic divide.

The report identified tax reform and rural infrastructure as factors to improving the rural economy.

Trade, specifically the North American Free Trade Agreement, will be a primary focus, according to the report. But other trade deals in flux could also have an impact on U.S. agricultural exports.

According to the report, a turbulent year faces the grain, farm supply and biofuels sectors as the industry adjusts to a protracted cyclical downturn.

Dairy, livestock and poultry sectors will face price pressure during expansion and trade uncertainties loom.

The full report is available here.