Borrowing costs are at the top of farmers’ minds as they get ready to plant for the year.
Fed Chair Jerome Powell left interest rates unchanged last week. Economists say it is anyone’s guess where the year will go, but warn you need to be prepared.
“I wish we had a crystal ball to know what’s next, and I would say that what you don’t want to do is just cross your fingers and hope interest rates keep falling. Not doing anything is just as risky as taking an all-in position either way. So what we’ve seen a lot of people do is somewhere meet in the middle where they try to get to a risk rate neutral stance where half the debts floating, half the debts fixed. If rates go up, great, you have protection in place. If rates keep falling, great, half the debt keeps on floating down lower, too,” said Josh Cannington with StoneX.
Carrington says it is important to make use of market tools, like swap options, which could allow farmers to choose which risks they want to take.
Retail competition and improved supplies are helping offset food inflation, pushing Thanksgiving meal costs modestly lower despite higher prices for beef, eggs, and dairy.
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The ACRE Act modestly reduces farmland borrowing costs now, with more savings possible once federal guidance clarifies which loans qualify.
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USMEF’s Jay Theiler discusses his leadership role in representing U.S. beef and pork and provides an update on this week’s conference in Indianapolis.
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Manure from a hog farm is more than just waste; it is also becoming a key renewable resource for operations.
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