Another sign of trouble on the borrowing front for farmers and others. Moody’s last week lowered its outlook to negative from stable on U.S. debt, raising the specter of even higher borrowing costs.
Political polarization is again threatening the nation’s credit rating, as Moody’s raised doubt about Congress’ ability to tackle long-term debt amid another shutdown cliff at midnight Friday.
Soaring borrowing costs are compounding longstanding inflation on the farm for fuel, fertilizer, seed, chemicals, and labor. American Soybean Association head Daryl Cates testified at a House farm bill hearing this year saying “Rising interest rates is, especially for a beginning farmer, is going to be huge. Just my operating loan from Farm Credit, now, has jumped to eight-and-a-quarter percent.”
National Sorghum Producers Chair Craig Meeker says survival on the farm may come down to the cost of borrowing. He says, “As we see rising interest rates, it’s going to be the ones that have the financial stability and ability who will be able to continue to farm, not the ones that have to use lending as an option.”
The way Central Illinois Congresswoman and farmer Mary Miller sees it; “Credit could potentially become too expensive for producers.”
Meantime, House Speaker Mike Johnson’s short-term plan to keep the government funded after Friday includes an expected extension of the farm bill through next September.
The four leaders of the House and Senate Ag Committees released a statement Sunday that they agreed on the extension but that it’s “in no way a substitute for a five-year farm bill” that they’re committed to finishing next year.