Credit, like any other small business, if vital for today’s farmer. And that credit, hopefully comes with dependent on reasonable interest rates.
“Right now Ag producers are experiencing some of the lowest interest rates they’ve ever experienced ever since we’ve been measuring, really, farm finances.”
Jackson Takach, Chief Economist for Farmer Mac, said not only are interest rates very low, but if you look at how many cents out of every dollar a farmer earns that gets eaten up in interest payments, it was 35 cents back in the farm crisis of the 1980’s.
“Today we’re at something more like 10 to 12 cents. Very modest levels, very manageable levels, and I think our new normal is going to be right around that 13 cents to 15 cents more. So we’re going to hold that level given where interest rates are on the outlook for interest rates.”
Takach said even though interest rates are really low, farmers in the next few months might see yet another decline.
“But is going to be much smaller than some of the more dramatic decreases we’ve seen over the last say 12 to 24 months.”
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