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
The report shows that, despite production challenges, dairy farmers are producing more milk with fewer resources per gallon across the industry.
Smaller U.S. production and steady global demand could provide better pricing opportunities in 2026.
Higher yields are cushioning lower acreage, but reduced production could support firmer potato prices into 2026.
Producers across the country balanced winter weather disruptions, shifting export demand, and tightening margins as year-end decisions come into focus.
Reviewing risk management now can help dairy and livestock producers enter 2026 with clearer margins and fewer surprises.
Canada’s new voluntary Grocery Sector Code of Conduct will take effect on Jan. 1, a goodwill effort to promote fairness and transparency between retailers and support farms that sell directly to stores.
