As tighter margins pressure farm finances, lenders are seeing producers rely more heavily on borrowed capital to cover operating expenses. At the same time, higher interest rates are increasing the cost of carrying that debt. Chad Gent, senior vice president of retail credit with Farm Credit Services of America, said that is making cash flow management increasingly important.
Gent said the impact of higher interest rates varies widely among operations, depending on their financial position and how much available credit they’re using.
Government assistance can help producers navigate difficult years but can’t always be counted on. Gent said lenders look for sources of financial stability when planning ahead.
For more information, visit fcsamerica.com.
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