The United States has to get back on a more sustainable path, says Bob Young, chief economist for the American Farm Bureau Federation. The market uncertainty that’s been on display over the past few days will dominate for the foreseeable future.

“When you downgrade the ultimate sovereign unit—the United States—all other units attached to it, like Fanny Mae and Freddie Mac get downgraded too,” Young notes. “We saw that this week with Farmer Mac notes as well.”

As for the impact all of this could have on farmers and ranchers, Young told AgriTalk that while the short-term impact is yet to be seen, interest rates have turned lower as bond markets have moved higher. That’s because money continues to flow into those federal bonds, which are still considered a safe bet. The economic turmoil elsewhere in the world, particularly in parts of Europe, is more troublesome to investors than the U.S. bond market.

Longer term, “riskier paper does bear a higher cost in the form of higher interest rates,” Young says. “So, unless the market just shrugs this off, in six months or 12 months, we could be facing higher interest rates than we’d pay without this downgrade.”

On Tuesday, however, the Federal Reserve came out and said that interest rates will remain low through 2013. That was a highly unusual move, one that was thought to help sooth consumers' nerves, giving them a timeline for big purchases. However, the stock market's reaction was uninspired and other issues, including consumer confidence will remain nagging obstacles.

Truly resolving the debt ceiling issue and moving on to the longer term budget issues won’t begin until after Aug. 16, when the 12-person “super committee” is named. From there, it will need to complete its work and make recommendations by Nov. 23, with the Congress vote by Dec. 23. Young is hoping the smaller group will take the opportunity to cut spending, address entitlements and work on tax reforms.

The one small bright spot for agriculture could come on the export side. “If the dollar continues to weaken, it makes our exports more competitive,” he notes.

Still, Young considers the U.S. credit downgrade to be very serious overall. “We’re never going to be the same,” he says. It’s like a winning streak, once the Triple-A rating has been lost, the United States can’t say it’s always been; it changes the overall perspective.

Click here for the AgriTalk audio clip.'