{"id":214,"date":"2023-01-30T08:02:48","date_gmt":"2023-01-30T13:02:48","guid":{"rendered":"https:\/\/embarrdowns.com\/?p=214"},"modified":"2023-01-30T08:02:48","modified_gmt":"2023-01-30T13:02:48","slug":"inflation-risks-and-rising-rates-how-it-impacts-ag-retailers","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/inflation-risks-and-rising-rates-how-it-impacts-ag-retailers\/","title":{"rendered":"Inflation Risks and Rising Rates: How It Impacts Ag Retailers"},"content":{"rendered":"

The U.S. Federal Reserve has taken aggressive steps to combat inflation by raising interest rates.[0]<\/a><\/sup> On Dec. 14, 2022, the Fed raised the federal funds rate to a targeted range of 4.25% to 4.5%, the highest level in 15 years.[1]<\/a><\/sup> This rate spike sent stocks and bonds higher in January as investors bet that the Fed may pause and even reverse its interest-rate increases.[2]<\/a><\/sup><\/p>\n

The consumer price index (CPI) increased 7.1% year-over-year in November, registering the smallest monthly increase since the end of 2021.[3]<\/a><\/sup> Gasoline prices dropping significantly provided a reprieve to households, making living expenses more manageable.[4]<\/a><\/sup> For the past six months, inflation has decreased on an annual basis, reaching 6.5% after a high of approximately 9% in the summertime, partially due to the decrease in gasoline prices.[5]<\/a><\/sup> Excluding volatile food and fuel, core consumer prices have still risen by 0.3% or less over the last three months.[5]<\/a><\/sup><\/p>\n

In the fourth quarter, ethanol production was almost back to what it was before the COVID pandemic, averaging 15.5 billion gallons.[6]<\/a><\/sup> The average profit margin per gallon was $0.27 in the first nine months of 2022, which is higher than the long-term historical average of $0.25 to $0.30.[7]<\/a><\/sup> Following the Biden administration’s statement of their plan to evaluate states’suggestions, the sale of E15 throughout the year has picked up speed.[6]<\/a><\/sup><\/p>\n

In the fourth quarter of 2022, grain markets had to contend with a number of difficulties, such as the conflict in Ukraine, economic downturns in China and Europe, and increases in interest rates in the US and other industrialized countries.[7]<\/a><\/sup> Multi-year lows for the stocks-to-use ratios of corn, soybeans, and wheat were reached in 2022, a result of robust domestic demand.[7]<\/a><\/sup><\/p>\n

These risks to inflation, along with many investors\u2019 failure to acknowledge them, means core inflation is unlikely to decline in a straight line through year-end toward the Fed\u2019s target of 2%.[5]<\/a><\/sup> Rather, the decline is more likely to stall out mid-year, with inflation staying closer to 4%, a development that could keep rates higher for longer and markets possibly stuck in a volatile waiting game.[8]<\/a><\/sup><\/p>\n

Ag retailers posted exceptionally strong revenue and profit growth in 2022, driven by sturdy grain market fundamentals.[6]<\/a><\/sup><\/p>\n

0. <\/span>“What Can Trucking Expect from Inflation and Interest-Rate Numbers? [Analysis]” Heavy Duty Trucking, 24 Jan. 2023, https:\/\/www.truckinginfo.com\/10190912\/what-can-trucking-expect-from-inflation-and-interest-rate-numbers-analysis<\/a><\/a><\/p>\n

1. <\/span>“Will High Inflation Be a Game Changer for Estate Planning? | New York Law Journal” Law.com, 27 Jan. 2023, https:\/\/www.law.com\/newyorklawjournal\/2023\/01\/27\/will-high-inflation-be-a-game-changer-for-estate-planning\/<\/a><\/a><\/p>\n

2. <\/span>“Market Recovery Hinges on Quick Inflation Drop” The Wall Street Journal, 23 Jan. 2023, https:\/\/www.wsj.com\/articles\/market-recovery-hinges-on-quick-inflation-drop-11674427477<\/a><\/a><\/p>\n

3. <\/span>“Many Americans believe inflation will get worse in 2023” Fox Business, 25 Jan. 2023, https:\/\/www.foxbusiness.com\/personal-finance\/americans-believe-inflation-worse-in-2023<\/a><\/a><\/p>\n

4. <\/span>“4 Top Stocks to Benefit as Inflation is on the Wane” Yahoo Life, 27 Jan. 2023, https:\/\/www.yahoo.com\/lifestyle\/4-top-stocks-benefit-inflation-131101819.html<\/a><\/a><\/p>\n

5. <\/span>“Inflation Is Cooling, Leaving America Asking: What Comes Next?” Moneycontrol, 23 Jan. 2023, https:\/\/www.moneycontrol.com\/news\/business\/economy\/inflation-is-cooling-leaving-america-asking-what-comes-next-9922021.html<\/a><\/a><\/p>\n

6. <\/span>“Inflation begins to loosen its grip” Beef Magazine, 20 Jan. 2023, https:\/\/www.beefmagazine.com\/beef\/inflation-begins-loosen-its-grip<\/a><\/a><\/p>\n

7. <\/span>“CoBank: Inflation is Beginning to Loosen its Grip” Monitor Daily, 23 Jan. 2023, https:\/\/www.monitordaily.com\/news-posts\/cobank-inflation-is-beginning-to-loosen-its-grip\/<\/a><\/a><\/p>\n

8. <\/span>“Will Inflation Go Down Steadily From Here?” Morgan Stanley, 18 Jan. 2023, https:\/\/www.morganstanley.com\/ideas\/will-inflation-go-down-steadily-2023<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. Federal Reserve has taken aggressive steps to combat inflation by raising interest rates.[0]<\/a><\/sup> On Dec. 14, 2022, the Fed raised the federal funds rate to a targeted range of 4.25% to 4.5%, the highest level in 15 years.[1]<\/a><\/sup> This rate spike sent stocks and bonds higher in January as investors bet that the Fed may pause and even reverse its interest-rate increases.[2]<\/a><\/sup><\/p>\n

The consumer price index (CPI) increased 7.1% year-over-year in November, registering the smallest monthly increase since the end of 2021.[3]<\/a><\/sup> Gasoline prices dropping significantly provided a reprieve to households, making living expenses more manageable.[4]<\/a><\/sup> For the past six months, inflation has decreased on an annual basis, reaching 6.5% after a high of approximately 9% in the summertime, partially due to the decrease in gasoline prices.[5]<\/a><\/sup> Excluding volatile food and fuel, core consumer prices have still risen by 0.3% or less over the last three months.[5]<\/a><\/sup><\/p>\n

In the fourth quarter, ethanol production was almost back to what it was before the COVID pandemic, averaging 15.5 billion gallons.[6]<\/a><\/sup> The average profit margin per gallon was $0.27 in the first nine months of 2022, which is higher than the long-term historical average of $0.25 to $0.30.[7]<\/a><\/sup> Following the Biden administration’s statement of their plan to evaluate states’suggestions, the sale of E15 throughout the year has picked up speed.[6]<\/a><\/sup><\/p>\n

In the fourth quarter of 2022, grain markets had to contend with a number of difficulties, such as the conflict in Ukraine, economic downturns in China and Europe, and increases in interest rates in the US and other industrialized countries.[7]<\/a><\/sup> Multi-year lows for the stocks-to-use ratios of corn, soybeans, and wheat were reached in 2022, a result of robust domestic demand.[7]<\/a><\/sup><\/p>\n

These risks to inflation, along with many investors\u2019 failure to acknowledge them, means core inflation is unlikely to decline in a straight line through year-end toward the Fed\u2019s target of 2%.[5]<\/a><\/sup> Rather, the decline is more likely to stall out mid-year, with inflation staying closer to 4%, a development that could keep rates higher for longer and markets possibly stuck in a volatile waiting game.[8]<\/a><\/sup><\/p>\n

Ag retailers posted exceptionally strong revenue and profit growth in 2022, driven by sturdy grain market fundamentals.[6]<\/a><\/sup><\/p>\n

0. <\/span>“What Can Trucking Expect from Inflation and Interest-Rate Numbers? [Analysis]” Heavy Duty Trucking, 24 Jan. 2023, https:\/\/www.truckinginfo.com\/10190912\/what-can-trucking-expect-from-inflation-and-interest-rate-numbers-analysis<\/a><\/a><\/p>\n

1. <\/span>“Will High Inflation Be a Game Changer for Estate Planning? | New York Law Journal” Law.com, 27 Jan. 2023, https:\/\/www.law.com\/newyorklawjournal\/2023\/01\/27\/will-high-inflation-be-a-game-changer-for-estate-planning\/<\/a><\/a><\/p>\n

2. <\/span>“Market Recovery Hinges on Quick Inflation Drop” The Wall Street Journal, 23 Jan. 2023, https:\/\/www.wsj.com\/articles\/market-recovery-hinges-on-quick-inflation-drop-11674427477<\/a><\/a><\/p>\n

3. <\/span>“Many Americans believe inflation will get worse in 2023” Fox Business, 25 Jan. 2023, https:\/\/www.foxbusiness.com\/personal-finance\/americans-believe-inflation-worse-in-2023<\/a><\/a><\/p>\n

4. <\/span>“4 Top Stocks to Benefit as Inflation is on the Wane” Yahoo Life, 27 Jan. 2023, https:\/\/www.yahoo.com\/lifestyle\/4-top-stocks-benefit-inflation-131101819.html<\/a><\/a><\/p>\n

5. <\/span>“Inflation Is Cooling, Leaving America Asking: What Comes Next?” Moneycontrol, 23 Jan. 2023, https:\/\/www.moneycontrol.com\/news\/business\/economy\/inflation-is-cooling-leaving-america-asking-what-comes-next-9922021.html<\/a><\/a><\/p>\n

6. <\/span>“Inflation begins to loosen its grip” Beef Magazine, 20 Jan. 2023, https:\/\/www.beefmagazine.com\/beef\/inflation-begins-loosen-its-grip<\/a><\/a><\/p>\n

7. <\/span>“CoBank: Inflation is Beginning to Loosen its Grip” Monitor Daily, 23 Jan. 2023, https:\/\/www.monitordaily.com\/news-posts\/cobank-inflation-is-beginning-to-loosen-its-grip\/<\/a><\/a><\/p>\n

8. <\/span>“Will Inflation Go Down Steadily From Here?” Morgan Stanley, 18 Jan. 2023, https:\/\/www.morganstanley.com\/ideas\/will-inflation-go-down-steadily-2023<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/214"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=214"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/214\/revisions"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}