What rising interest rates mean for ag

Rising interest rates and inflation are putting pressure on land decisions and farm costs. Federal Reserve Bank of Kansas City’s Nate Kauffman says those looking to finance land purchases are being more cautious.

“There’s less demand for farmland, in part, because of higher interest rates and those looking to finance are having more difficulty,” says Kauffman. “But there still has not been a lot of land put on the market. We haven’t seen any forced asset liquidation.”

Kaufman says to offset inflation and help fill the gaps from a loss of government payments, there has been an uptick in demand for short-term operating loans this year. He tells Brownfield he’s unsure if that will continue in 2023.  

“We’ll be watching to see what the balance might be for thinner profit margins and then, also, reduced opportunities and increased costs associated with whatever producers may be thinking going forward.”

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