Federal Reserve Cuts Rates To Ease Farm Credit

The modest cut should slightly reduce borrowing costs on operating loans, land notes, and equipment financing for agriculture, giving some relief to producers under heavy debt loads.

WASHINGTON, DC (RFD-TV) — The Federal Reserve lowered its benchmark interest rate by a quarter-point on September 17, the first cut of 2025. Chair Jerome Powell said the move was a “risk management” step to support the labor market while inflation remains above target. The Fed also raised its 2026 inflation outlook, signaling persistent cost pressures across the economy.

For agriculture, the modest cut should slightly reduce borrowing costs on operating loans, land notes, and equipment financing, giving some relief to producers under heavy debt loads. At the same time, input costs for fuel, fertilizer, and labor remain elevated, limiting overall margin gains. A softer U.S. dollar could lend support to farm exports, but trade demand remains the dominant driver for prices.

Tony’s Farm-Level Takeaway: The Fed’s rate cut offers limited relief for farm credit costs, but persistent inflation keeps input prices high. Farmers may find refinancing opportunities, though cash-flow discipline remains critical.
Related Stories
Reviewing risk management now can help dairy and livestock producers enter 2026 with clearer margins and fewer surprises.
Stronger rail movement and lower fuel prices are easing logistics, even as export pace and river conditions remain uneven.
Recent USDA export sales data show China has been active in the U.S. market, but analysts tell RFD-TV News that the timing is a key clue.
In Minnesota, a legal and legislative battle has reached a tipping point. For over a decade, the state’s Department of Natural Resources (DNR) and the private deer-farming industry have been locked in a dispute over the management of Chronic Wasting Disease (CWD).
Tight feeder supplies and lower placements indicate continued support for the cattle market, with regional impacts heightened in Texas by reduced feeder imports.
Farm CPA Paul Neiffer outlines the key difference between previous ECAP payments and the Farm Bridge Assistance Program.
Larger operations maintain cost advantages, while softer equipment sales suggest producers are pacing machinery upgrades amid tighter margins.
Transportation access, legal disputes, and fertilizer freight costs will directly influence input pricing and grain movement in 2026.
Despite China’s sharp drop in grain purchases this year, new USDA export data this week shows that even some buying activity from the trade giant still moves the markets.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Delaware FarmHER Katie Evans turns “ugly” produce into delicious treats through her nationally recognized brand, The Frozen Farmer
George Baird, with the American Society of Farm Managers and Rural Appraisers (ASFMRA), joins us with updates on how this year’s rice harvest is shaping up.
Crop insurance remains a vital tool for managing climate-driven risk.
Expect firm demand for dependable HRS and SW, steady movement in HRW, more sorting on SRW, and selective bids on durum until full milling results are released.
Reversion would sharply increase dairy prices and raise crop supports, driving up government costs and consumer prices while unsettling markets—even as crop insurance remains in place.
Dr. Todd Davis, Chief Economist with the Indiana Farm Bureau, shares a snapshot of his state’s harvest conditions and insights from producers.