Farm balance sheets: Interest rates going forward

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Interest rates closely link U.S. agriculture to national financial markets in various ways. First, interest rates affect the value of outstanding debt and thus the solvency of the sector. Second, agriculture is particularly sensitive to interest rates because it is one of the most capital-intensive industries in the economy. Interest rates can influence variable production costs by raising or lowering the payments required for shortrun planting-to-harvest borrowing. They also affect the cost of long-term capital investments. Third, interest rates are a key determinant of land values, the base of wealth in agriculture.

Based in part on the activities of the Federal Reserve in the latter part of 2010, interest rates in the overall economy are low and are expected to remain so through the remainder of 2012. Interest rates going forward will be affected by supply and demand forces in domestic and global financial markets.

Source: Farm Income and Costs

Comments (0) Leave a comment 

e-Mail (required)


characters left

Ag-Bag MX1012 Commercial Silage Bagger

"The Ag-Bag MX1012 Commercial Silage Bagger is an ideal engine driven mid-size bagger, designed to serve the 150 to 750 ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight