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.
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The Court may limit emergency tariff powers, complicating a key bargaining tool; ag could see shifts in input costs and export dynamics as China, Brazil, and India talks evolve.
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David Klein with the American Society of Farm Managers and Rural Appraisers (ASFMRA) shares an end-of-harvest update and a peek at the farmland market in Central Illinois.
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The Farm Bureau urges trade enforcement, biofuel growth, fair input pricing, and pro-farmer policy reforms to restore long-term certainty.
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Livestock profits are propping up overall sentiment, but crop producers remain cautious amid tight margins and uncertain policy signals.
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