‘Tis quite the time of introspection for our Yankee cousins across the pond as they saunter past 2024 into the possibility-laden world of 2025. Yet, whilst the broader American economy seems to be holding a jolly course of steady growth, scanty unemployment, and mellower inflation, the rural arenas appear to be somewhat adrift on a sea of uncertainty. A significant ingredient in this bubbling cauldron is the looming 2024 election, promising a few hearty shakes in federal policy—ranging from international trade to energy exploration.
NEW ECONOMIC ERA
Forecasts for the United States’ economic growth in the year 2025 meander around the 2.5%-3.0% mark, akin to the present figures. This, naturally, is contingent on the presumption of only mild policy changes afoot. Elected leader Mr. Trump’s propositions—encompassing tax cuts, a dwindling labour supply, and tariffs—bear the promise of inflation. Thus, it seems reasonable for longer-term interest rates to have started creeping upwards, lowering expectations for more cuts by the Federal Reserve, don’t you know.
Returning to the Capitol on January 3rd, the 119th Congress will undoubtedly find its plate brimming with demanding tasks. Gone are the days of the commodity booms, invigorated by global droughts and other such disruptions. Now, the wind of fortune has left row crop prices noticeably deflated—a whopping 50% down from their 2022 summits. Despite the price drop, production costs haven’t been as cooperative, you see. When it comes to the profitability of U.S. farms, these are indeed challenging times.
U.S. AG ECONOMY
But hark, there’s an upside for the dairy and livestock chaps! They seem to be faring reasonably well, owing to low feed costs and stoic demand. Nevertheless, murkier weather may yet be on the way for crop and livestock sectors, particularly with tariffs and changes in immigration policy nipping at their heels. Mr. Trump appears to be aiming for bold strides with economic policies focused on trade and immigration, stirring a tad of trepidation. More details on the impact of these can be unearthed at this [J.P. Morgan research](https://www.jpmorgan.com), detailing the concerns in the food and drink sector.
POWER AND ENERGY
In the realm of power and energy, Mr. Trump’s re-emergence could spell quite the pivot in policy. He’s inclined to undo the Inflation Reduction Act—a curious adventure considering the Act’s already fuelled investments in many a rural and embattled community. Retracting funds may present challenges more Herculean than foreseen. Instead, there’s a possibility to redirect unspent shekels elsewhere, and that’s a thought to ponder.
Lastly, the £42.5 billion Broadband, Equity, and Access Development (BEAD) programme, originally crafted under the Infrastructure Investment and Jobs Act, represents a laudable attempt to bridge the digital divide—if only it were spruced up with enthusiastic participation from operators. The programme aims to provide a long overdue broadband line for rural households, a trifle challenging given the inherent complexities.
For those keen to delve deeper into the intricacies of rural economics in America, I daresay you would benefit from [The Year Ahead: Forces That Will Shape the U.S. Rural Economy in 2025](https://tinyurl.com/4bb6rz86).
