Rising interest rates have a hold on most areas of the ag economy, but the least profitable producers have taken the biggest hit.
The Minneapolis Fed says producers in the ninth district have faced more expenses as a result of the current economy. That includes operations in Minnesota, Montana, and the Dakotas.
Right now, the district’s least profitable producers have higher debt per crop, and as rates go up, their cash flows are more sensitive. Those increased expenses could require them to get more funding because of less working capital.
The Fed estimates the least profitable farmers spend three times more on interest.
Related Stories
Brooks York with AgriSompo provide insight on crop insurance considerations and the decisions farmers are making as the enrollment deadline approaches.
Strong consumer demand supports livestock market outlook.
Farm legal expert Roger McEowen discusses a new rail antitrust case in Kansas and its potential implications for farmers as rail upgrades signal continued export-driven demand for logistics.
Strike risk adds volatility to already tight markets.
Technology-driven lending decisions may shape the future availability of farm credit.
Logistics remain firm, but freight costs continue to rise.
