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
NMPF’s Alan Bjerga discusses pending trade agreements with Indonesia and Ecuador and how they will benefit U.S. dairy producers and improve overall global competitiveness of U.S. ag products.
Lewis Williamson with HTS Commodities discusses how tensions in the Middle East are impacting producer’s spring planting decisions.
Farm Legal expert Roger McEowen discusses new dicamba regulations, compliance requirements for growers, and the evolving outlook for herbicide use.
Land values remain key to borrowing strength.
Mike Steenhoek with the Soy Transportation Coalition discusses supply chain disruptions, rising costs, and the potential impact on agriculture as farmers navigate ongoing global uncertainty.
Strong exports support ethanol margins and corn demand.
