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High interest rates to have bigger impact on farm profitability in 2024

High interest rates are expected to have more of an impact on farm profitability in 2024.

Farm management analyst Kent Thiesse with MinnStar Bank in southern Minnesota says costs for land and crop inputs remain elevated while commodity prices have softened.

“One of the things with farmers not selling as much grain means they’re probably not going to have as much cash available to pay for those inputs up front, which means putting more of that on an operating line of credit.”

He tells Brownfield strong corn and soybean prices the past three years allowed farmers to use cash, but working capital could be running out.

Thiesse says some rates might be double that of a year ago.

“And that’s going to be an added cost.”

He says high interest rates will influence grain marketing because break-evens are going to be tighter.