Able to stave off the early rounds of economic downturn, will the ag economy follow commodities on a slide?
Today’s Farmer talked to a team of agricultural lenders about how the credit crunch will affect farmers. Generally, they predict it won’t have a huge impact. Still, our team says you may experience more scrutiny on cash flow at a time when margins are tightening. You may also face higher interest rates over the long term. Read on to learn what you can do to attract credit. 1. How has the credit crisis affected farm lending? Oldvader: The crisis hasn’t had a major impact on farm lending at this time. We have access to debt capital, and we will continue to fund loans as needed. Some larger agribusinesses could find it more difficult to obtain capital, and we’re seeing higher interest rates on long-term loans. Until now, the yield curve was relatively flat—that is, longer-term interest rates were not much higher than short-term rates. As the Federal Reserve Bank tries to bring credit stability to the market, short-term interest rates may actually go down in the near future, while the gap
