Interest rates the forgotten input cost
An official with America’s largest non-bank agricultural lender suggests the input not being talked about enough is interest rates.
Curt Covington is with AgAmerica.
“People forget that interest, in what farmers are paying to their lenders, is a real input cost. So when it goes up 150 basis points in a matter of three months, that’s money taken directly from the bottom line of that grower.”
He tells Brownfield ag lenders are very concerned about the direction of interest rates.
“We recognize that inflation has to be controlled, but it’s a bit of a no-win situation because in order to potentially get some of these costs under control may also mean that other costs will likely go up. That being interest costs.”
Covington says farmers who successfully manage volatile price environments know what their costs are.