Interest Rate on the Rise Again

The Federal Reserve announced an increase in their basic interest rate after what has appeared to be good economic indicators.

USDA Chief Economist Rob Johannson said that could increase the value of the U.S. dollar.

“And that has the effect of making it more difficult for our producers to sell our products overseas. It makes them a little bit less competitive on the global scene.”

The interest rate will be raised to between .75 and 1 percent.

Johannson said this could also hurt domestic values.

“Land and capital equipment will probably go down in value a little bit. As interest rates go up, it becomes a little bit more difficult to buy those and therefore demand for those assets will fall. So we would expect the price for agricultural land to come down as the interest rates go up.”

Johannson also noted that farmers will mostly likely be paying higher interests for their next operating loan.