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Effect of high interest rates tempering ag investments

While the Federal Reserve left interest rates unchanged for the second month in a row, an ag economist says a year’s worth of increases has already made an impact.

Brian Briggeman is with Kansas State University.

“We’ve seen in some of the farmer data on loans where they have begun to pull back,” he shares.  “I’m hearing reports from cooperatives where they’re starting to feel the crunch on an added interest expense.”

The former economist for the Kansas City Fed tells Brownfield interest rates paid by farmers in that region have increased from 5 to 8 percent over the past year.

“We’ve seen a significant increase and that really has slowed down a lot of farm lending and farmers are using a lot more cash for various purchases,” he says.

Briggeman says farm machinery and farmland purchases are likely to slow in the near term.