Mike Pearson examines how interest rates are impacting the agriculture sector.
In 2021, 90 percent of operating loans were under 5 percent. This year, it’s north of 8 percent.
Inflation increased during COVID in 2021 and the Russia-Ukraine conflict.
So, the federal government started to raise interest rates in an effort to fight inflation.
Currently, the federal rate is 5 1/4 percent which makes an interest rate around the 8 percent mark.
This makes the pressure on farm operators increase because of the high interest rates and a high cost of production.
The interest rates bumps have cooled…
