A farm finance specialist says the recent interest rate increase could impact farmers cost structure.
The Federal Reserve increased the interest rates by a quarter-of-a-percent last week.
While the increase was widely anticipated, it does put added pressure on farmers who are already facing a tight ag economy.
“It’s going to more so impact their operating lines of credit, short-term lending—particularly for inputs like seed and fertilizer for example,” said Matt Monteiro with Farm Credit Mid-America.
Long-term rates still remain at or near historical lows, but the Federal Reserve indicated at its latest meeting that could change.
Monteiro said the Federal Revere based its decision on what is projected to be a stronger economy with a decline in unemployment and an increase in price stability.
He anticipates one more interest rate increase this year.
Source: brownfieldagnews.com