Generally, the farms in the region were able to protect working capital this past year. However, Farm Business Management instructor Josh Tjosaas is seeing tighter margins going into the new year. Interest costs are part of that discussion. “We’re putting together their balance sheet on their operating line, they look at that number and they go that’s almost double what I paid last year and I didn’t even borrow as much money,” explained Tjosaas. “Your interest rate is four or five percent higher than it was a year or so ago.” Interest rates on operating lines of credit are in the seven-to-ten percent level. “I’ve been doing this for 12 years and I haven’t seen double digit interest rates in that entire time on operating (loans).” Land rents are also edging higher.
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