Meat & Livestock News

Rising Interest Rates Impact Agricultural Investment Trends

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The agricultural sector is witnessing a tempering in investment activities, influenced by a year-long increment in interest rates, despite the Federal Reserve’s decision to hold the current rates steady for the second successive month.

Brian Briggeman of Kansas State University has noted a downturn in loan applications from farmers, a trend that is supported by reports from cooperatives which are beginning to experience the impact of increased interest burdens.

In the Kansas City Fed’s district, the interest rates charged to farmers have climbed from 5% to 8% over the past twelve months, leading to a more prudent approach to borrowing.

This increase has significantly slowed down farm lending, with farmers now more inclined to use cash for purchases. Briggeman suggests that, in the near future, there could be a decline in the purchases of farm machinery and land, as the agricultural community adjusts to the evolving economic landscape.