YOUR TEXAS AGRICULTURE MINUTE
High interest rates adding more expense to rising input costs for agriculture
By Gary Joiner
Most family farms rely on financing to fund the high cost of producing food, fiber and fuel.
Those operating loans and other forms of financing have become much more expensive because of higher interest rates.
A recent Market Intel report from the American Farm Bureau Federation says financing costs farmers 43% more in 2023 than in 2022.
And the outlook for 2024 does not offer much relief. Interest rates are expected to remain elevated for much of this year.
The situation is a huge concern. Interest rate hikes have not only increased the cost of credit as an input, but they have also limited farmers’ ability to use it.
The report says working capital declines faster, forcing farmers to lean on expensive credit to provide liquidity.
The amount of income being used to pay interest on farm debt in the U.S. has increased at a rate not seen since the 1980s.
Economists say excellent management and decision making are essential if farmers are to remain resilient during times of vulnerability.
The preceding commentary is brought to you by Texas Farm Bureau, the “Voice of Texas Agriculture.” Called “Your Texas Agriculture Minute,” TFB will issue thought-provoking editorials each week—via print and audio—to spark understanding of agriculture in the Lone Star State and its impact on each and every Texan.
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