Economist sees direct and indirect farmer impacts following rate hike
An ag economist sees direct and indirect consequences to farming operations following the Federal Reserve’s latest interest rate hike.
Chad Hart with Iowa State University Extension says farmers will see upward pressure on operating loans and land mortgages.
“And it’s a sizable bump when you’re looking at another three-quarters of a percent jump, the third one in a row.”
He tells Brownfield higher interest rates will also affect lines of credit from seed companies and input suppliers as overall costs go up.
“And that leads to the indirect affects here that this also chains through on other costs that we have that aren’t directly linked to interest, but the idea is that those companies also pay interest and they have to basically pass that cost along.”
Hart says farmers can reduce the impact of higher interest rates by actively managing their debt portfolio and by locking in rates now before another increase.