Economic Outlook

Thomas Halverson, president and chief executive officer of CoBank, shared his insight on the future of the economy and its impact on agriculture and dairy Tuesday afternoon.

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Thomas explored the current state of the U.S. economy and the likelihood of another recession. Before diving in, he praised DFA for its standing currently and into the future.

“Of all the cooperatives, DFA stands out for its operational and financial strength,” Thomas said, “and its continuing high level of investment into the future of the business.”

Currently, the economy is preforming well in terms of employment, the job market and U.S. housing values. Thomas noted there has been volatility in equity markets and that consumer spending continues to support the growth of the economy.

Of all the cooperatives, DFA stands out for its operational and financial strength,
— Thomas Halverson, president and chief executive officer of CoBank

However, he pointed out the U.S. economy has been growing for an extraordinary 116 months, the longest expansion since after World War II. All expansions, he reasons, come to an end, which would result in a recession. Unfortunately, he believes the U.S. government is not as equipped as one would hope to cope with an economic downturn.

Thomas explained that bankers often look for an indication of when the next recession might occur by looking to the yield curve, the price of money at different levels of maturity and the unemployment rate. The unemployment rate tends to reach a trough right before a recession, and unfortunately, the United States is close to that occurring.

While economists predict another recession between 2020–2021, Thomas states that agriculture is in better standing, due to the industry being less dependent on domestic trade.

In terms of dairy, Thomas explored key questions facing the industry, but provided assurance for the members.

“America’s farmers,” he says, “have always been adept at coping with uncertainty and that is a huge reason for us to be optimistic.”

He concluded the session by reaffirming CoBank’s commitment to DFA in challenging and prosperous times.