Russia’s attack on Ukraine will have long-lasting implications for U.S. rural industries

The Russian invasion of Ukraine has brought on a new set of economic conditions that are reshaping financial and commodity markets. For the remainder of 2022, global growth will be slower and most commodity prices higher than previously expected. Key agricultural inputs are in short supply and energy prices are near multi-year highs despite the biggest ever release from the U.S. strategic petroleum reserves.

These factors are amplifying already high inflation, and the Fed is poised to let air out of the easy money balloon more quickly. This will slow the U.S. economy and increase 2023 recession risks meaningfully. Businesses that are enduring higher commodity costs will soon face markedly higher interest rates as well.

Read more in the Q2 Rural Economic Review from CoBank

Disclaimer: This material is for informational purposes only and cannot be relied on to replace your own judgment or that of the professionals you work with in assessing the accuracy or relevance of the information to your own operations. Nothing in this material shall constitute a commitment by American AgCredit to lend money or extend credit. This information is provided independent of any lending, other financing or insurance transaction. This material is a compilation of outside sources and the various authors’ opinions. Assumptions have been made for modeling purposes. American AgCredit does not represent that any such assumptions will reflect future events.

This quarterly update is prepared by CoBank’s Knowledge Exchange Division.

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