Land Loans: Fixed Interest Rate vs. Variable Interest Rate

Interest rates are rising, what does this mean for agricultural and recreational land owners?

In September, the Federal Reserve raised its benchmark federal-funds rate for the third time this year, as an effort to help sustain a strong economy for the long-run. Increases to the benchmark rate affect both short-term and long-term interest rates; however, rates on short-term loans such as revolving lines of credit and operating loans are impacted the most. This is of significance to farmers and ranchers who often employ these types of loans for day-to-day operational expenses. Economists speculate the government will increase rates once more this year in December, with that in mind, now is the prime time to review your operation’s financial plan.

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