Wisconsin Bankers Association President and CEO Rose Oswald Poels joins Mid-West Farm Report for an update on today’s interest rates and the appetite for agricultural loans.
She says interest rates are projected to continue climbing for the sake of reducing inflation — but notes it’s anybody’s guess if it’s working. She’s seeing consumer spending is going down, but at the same time, wages are high and employment numbers are strong.
Home prices remain high because inventory is limited. But the roughly 5.5 percent interest rate for a 30-year fixed-rate mortgage is still relatively low if you’re looking to buy. She says this rate will only increase, and encourages home purchasing.
In the ag community, she says farmers are focusing on operating lines of credit versus loans for land, buildings or new equipment. This is because of the uncertainty of 2023 and the high input costs in regard to fuel and fertilizer. She encourages farmers to lock in their operating line of credit — it will cost more than last year.
Oswald-Poels says ag lenders across the state have worked with farmers through many highs and lows, and ag banks are used to the risk that exists in the ag sector regardless of the type of farm. She adds banks are in a good place to make loans. She expects ag lending to increase this year because farmers have had the last few years to finance their own expenses thanks to stimulus packages and strong balance sheets.
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