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There’s a Beast in the Economy Right Now Named Inflation

2023 might face a difficult outlook, but seeds are in a good place.

There’s a beast that our economy is currently battling. The battle started in 2022, but it doesn’t look like this monster attempting to wreak havoc is ready to leave: inflation.

Inflation is currently at levels we’ve not seen in the United States or around the world in over 40 years, according to Dan Basse, president and economist at AgResource.

“Gone are the days of low-interest rates,” he says in his presentation at the American Seed Trade Association’s CSS & Seed Expo 2022. “Gone are the days we’ll have employees come knocking on our door. Cheap labor around China and in the U.S. has left us — so as we think about this reset, I want you to think about your investments. Think about the world ahead and how this fits into the picture of dollars and where the world sits today.”

Think about what the U.S. — and the globe — have faced within the last few years. In addition to a global health pandemic, supply chains have yet to recover. Drought and heat are becoming more of an issue as temperatures rise. Russia invaded Ukraine in February 2022, causing issues within the global grain trade. Inflation has been a major issue, along with rising interest rates, high gas and diesel prices and threats of protest on the railways.

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Iran War = “Trend is Your Friend” Short-Term BUT……

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Historically wars like the 2026 Iran war are bullish hard assets like grains, metals and energy! The funds are spooked and do not want to be short, but do they price in the news over time, similar to the Ukraine/Russian war that started on Feb. 24, 2022? A closure of the Strait of Hormuz is the key to the surge in crude oil, natural gas prices and fertilizer prices.  Grains are breaking out to new contract highs as a hedge against inflation.