THE current financial crisis gripping the United States could moderate global and domestic demand for US farm products and intensify an already volatile price situation for both commodities and the supplies that farmers must purchase, according to financial analysis issued by the American Farm Bureau Federation. However, overall, the US agricultural sector is in good financial condition at the farm level, which could serve to cushion the impact of the financial crisis. According to the analysis prepared by AFBF economists, overall the US agricultural balance sheet is very strong, although the situation is always variable among individual farmers and ranchers. "The fallout from the general financial malaise is being felt worldwide, especially in countries that may be already facing slowing economies due to the high price of energy. This will most likely moderate the demand for agriculture products and ingredients, reduce the demand for US agricultural exports and ultimately affect U.S. farm prices. Likewise, a slower domestic economy would also weigh on the demand for farm commodities and prices," AFBF economist Terry Francl said.

* Extract from more global news in Stock Journal, October 2 issue.