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Making decisions with the farm’s financial health in mind

The combination of high interest rates and lower commodity prices continue to threaten farm financial health.  

West-central Illinois farmer Grant Strom says expenses are getting heavily scrutinized right now.  “When it comes to capital investments, especially,” he says.  “Can you ride things out another year or two with equipment or facilities or whatever the case may be?”

He tells Brownfield the lending environment has changed a lot since he started farming in 2003.  Strom took out his first farm loan that year right after his graduation from the University of Illinois. He says his interest rate on that note was 7 percent.  “From 2003 to 2024, it took 21 years for me to pay a higher interest rate than 7% on the first loan I ever had, and that seemed really high at the time,” he says.  “We got down the 3% range for like 10 years and it wasn’t free money, but it seems pretty free now.”

Strom says this is the time when production efficiency matters most. “You know, most guys are willing to try anything when corn is $6 to $7,” he says. “I’m almost at the belief that you really need to be figuring out the things you can afford to do at $3, $4, and $5 corn, and that’ll make that $6 and $7 corn just that much more profitable and sweeter.”