Ahead of the Fed — Farm Level Interest Rates

By Brent Gloy

At the end of 2015 many expected that the Federal Reserve might raise interest rates several times in 2016.  This was not an unreasonable guess as the December 2015 economic projections of the members of the FOMC suggested that most thought increases in the targeted Federal Funds were likely.

As it turned out, there were no additional increases in the target through November, setting up the December meeting as the last likely opportunity for a 2016 increase.  While we discussed the potential for farm level impacts of an increase back in 2015, we thought now would be a good time to take another look at farm level interest rates and begin to think through some of the implications of a potential interest rate increase. Continue reading

Credit Concerns?

by Brent Gloy

From sticky input prices to falling commodity output prices, U.S. farmers are working their way through some of the most difficult financial times in recent memory.  Purdue’s Ag Economy Barometer showed that after a slight July uptick, producer sentiment has turned decidedly lower. As we noted in a previous post this summer banker attitudes about agricultural credit conditions were turning as negative as they had been in some time.   We thought that now would be a good time look at credit conditions.  Continue reading

Rates of Return in U.S. Agriculture

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by Brent Gloy

Most of those involved in agriculture understand that farming can be a volatile business, with wide swings in profitability and earnings. But just how wide are those swings and on average what should one expect in terms of a return for their investment in agricultural assets? This week we take a look at the historical experience of the rate of return on assets in agriculture. Continue reading