Farm Progress America, August 17, 2023

August 17, 2023

Mike Pearson explains how interest rates are impacting farms across the country.

The federal government has increased the interest rate 11 times since March 2022-- that is the fastest increase since the 1980's.

And it is no secret that those hikes are impacting many farm's bottom lines.

In fact, the federal government increased the interest rates another quarter of a percent in July. This means that farms are paying between 7 and 9 percent interest for money borrowed.

The farmers being most impacted by the increased interest rates are those with the least profitable operations.

Researchers grouped farms into five different categories.

The first group with the most profitable farms have actually had debt decreased because the farm had the money to pay back loans. The farm's debt actually decreased per acre.

The least profitable group was not as lucky and actually added more debt. It has increased by 40 percent over the last three years. The debt per acre went from $1,683 to $2,526 per acre.

One interesting thing researchers has found is that the percent of the crop needed to pay interest on loans has actually decreased.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, a farm broadcaster and host of This Week in Agribusiness.

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