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Farmers carrying more operating debt

An ag banker says farmers are carrying more operating debt as production costs increase.

Barry Benson, VP of Agribusiness Banking at FNBO, suggests the farm economy is becoming more challenging as commodity prices soften while input costs remain high.

“So with higher debt levels and increased interest rates, that does really strain their cash flow.”

He tells Brownfield the Federal Reserve could lower interest rates later this year.

“It hasn’t been at the pace that we had anticipated earlier. But all in all, we still feel that in our FNBO customers that they are maintaining strong balance sheets (and) are well prepared for this little bit of a downturn.”

Benson encourages farmers to maintain strong liquidity, be mindful of expenses, and know their cost of production.