Against that backdrop the Federal Reserve this week chose to not raise interest rates. But the Fed indicated it was still concerned about inflationary pressures of tight labor market and energy prices. That outlook disappointed many in the financial community, muting trading on Wall Street. Ironically, one of the seemingly more optimistic areas of the U.S. economy is the troubled and government- dependent agriculture sector.
The government payments add approximately 47 cents to the price of a bushel of wheat, 27 cents for a bushel of corn. And the additional cash seems to have buoyed the outlook enough to encourage farmers to invest in their operations.
The Equipment Manufacturers Institute reports sales of farm tractors in all categories as well as self-propelled combines are up for the year. The biggest gains were generated by sales of smaller 2 wheel drive tractors under 100 horsepower.