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
Demand for farm loans surged in the first quarter of the year, topping the previous record set in 2016.
Labor Secretary Lori Chavez-DeRemer says the labor program will now be fully under her department, and consolidation will make the program more affordable and efficient for farmers and ranchers.
Roger McEowen with the Washburn School of Law joins us now with the highlights.
