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Farmers need to consider locking in interest rates

An ag lender says interest rates can change as quickly and dramatically as corn and soybean prices and farmers need to be prepared.

Michael LaPlant is vice president of ag lending with UMB Bank.  “As the economy continues to improve and the Federal Reserve Bank continues to scale back its security purchasing, we’re going to start to see a return to the normal interest rate environment,” he says.

He tells Brownfield producers who haven’t locked in interest rates could see expenses related to those rates double or even triple – and that can negatively impact cash flows.  “By reviewing today and fixing rates now, with proper use of fixed assets as collateral,” he says.  “Farmers can effectively lock in today’s low rates that can potentially save them tens of thousands of dollars in interest expense.”

LaPlant says by getting ahead of the situation – farmers can better manage any unexpected expenses down the road.

AUDIO: Michael LaPlant, UMB Bank

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