How Will Interest Rates Impact Farm Country?
What will be the effects of higher interest rates be on farmers and the agriculture industry?
"I'm almost gun-shy of making strong predictions in the environment we've been in, in the last couple years."
But USDA Chief Economist, Seth Meyer, said classic economics would say that normally:
"Rising interest rates in the United States strengthens the dollar, makes us a little less export competitive."
But Meyer this isn't a normal situation. Commodity prices are very high, demand also continues high in light of short supplies of commodities like wheat and weather concerns for other crops. However Meyer is not gun-shy on making this projection for producers:
"If you're a producer, the thing you're instantly going to see is if you're gonna go in and borrow, you're gonna see the rate increasing. And if consensus is right, that rate will continue to increase throughout the year."
But as far as the possible effects on land values and farm income, Meyer says it's impossible to know; at least right now.
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