Rising interest rates are among the lesser-discussed threats farmers face to their bottom line, but it’s one that got attention at a recent farm bill hearing. Fuel, fertilizer, and chemicals get most of the attention among soaring farm input costs. But rising interest rates are also taking a bite out of producers’ bottom lines
Central Illinois Congresswoman and farmer Mary Miller said “credit could potentially become too expensive for producers.” She then asked farm bill hearing witnesses how that would impact them.
American Soybean Association head Daryl Cates responded; “Rising interest rates are, especially for a beginning farmer, going to be huge. Just my operating loan from Farm Credit, now, has jumped to eight-and-a-quarter percent.”
American Sugar Cane League Chair Patrick Frischhertz; “As a younger farmer, really just starting out, it’s been a major hurdle to overcome. With rising interest rates, we will see younger farmers not have the ability to purchase the equipment they need to enter the industry.”
National Association of Wheat Growers Brent Cheyne said; “Interest rates are becoming a significant problem in farm country. I had loans a couple of years ago that were at three percent. My banker and I got along. Now they’re at ten percent. We’re not seeing eye to eye, so much.”
And National Sorghum Producers Chairman Craig Meeker; “As we see rising interest rates, it’s going to be the ones that have the financial stability and ability who will be able to continue to farm, not the ones that have to use lending as an option.”
Meeker says crop insurance helps leverage some of that credit, but Daniel McMillan for the U.S. Peanut Federation says as credit becomes tighter, “I may be looking for something else to do.”