Interest rates on farm loans hit 16-year highs at the end of last year, and economists expect this year’s interest expenses to jump more than 20 percent.
To put that into perspective, the Vice President of the Kansas City Fed says interest rates for farm operating loans compared to last year are financially equivalent to a well-established farmer losing 2.5 bushels of corn per acre.
He adds even with a 39 percent increase in interest expenses at the end of last year, the ratio of interest expenses to farm earnings is still well below historical averages.
One ag real estate manager says it never hurts to talk to your financial lender to discuss getting a lower rate.
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