Concerns about inflation have shifted Rabobank’s forecast of the first Federal Reserve rate cut this year from June to September, according to the bank’s RaboResearch “North American Agribusiness Review.”
Economists with RaboResearch now expect two interest rate cuts in 2024 instead of three, the report said. Looking ahead to the presidential election, RaboResearch said current polling indicates Donald Trump will win. Trump has said he will impose a universal 10% tariff in 2025, which Rabobank economists could say could lead to a rebound in inflation next year.
The “North American Agribusiness Review,” issued every other month, includes an analysis and summary of market conditions and trends across North American agriculture issued every other month.
“U.S. consumers have proven far more resilient than expected and we continue to analyze drivers behind evolving consumption patterns,” Roland Fumasi, head of RaboResearch North America, said in a news release. “Grocery volume sales have started to recover as food inflation has slowed. Our upstream market expectations are mixed, with continued weakness in some and expected recovery in others.”
The report said noted downward pressure on apple prices, with April 1 fresh apple inventories up 36% over last year and up 29% from the five-year average. Major apple variety pricing at the shipping point level was off 20% to 50% compared with year-ago levels, the report said.
RaboResearch said industry reports point to lower potato acreage this fall, with expectations of a 5% decline year over year. Processing acreage is expected to drop, and russet table potato acreage is expected to decline in Idaho and other key growing areas due to below-break-even prices, the report said.
