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Farm loan interest rates sharply higher

Farm loan interest rates are rising.

Nate Kauffman with the Kansas City Federal Reserve says there was a sharp increase in the third quarter.

“There are obviously other expenses to be concerned with, but interest expenses could very well be something that’s a bit more prominent next year than what maybe it was going into 2022.”

He tells Brownfield higher borrowing costs should be considered as farmers manage risk.

“Being aware of how the level of debt that they might be taking on, even if it is for good opportunities and new investments, is ultimately positioning them in a place where they’re going to have to service that debt at a higher cost.”

Kauffman says it will be important to meet with lenders more regularly to discuss plans.