With prices increasing on almost everything recently, F&M Bank Vice President of Agricultural Banking Mike Shane says historically prices and rates are not at a high:
“In agriculture right now, grain prices are high, although they are slipping back at the moment, but interest rates are obviously climbing very, very quickly. The prime interest rate is up 3% from its low, of course it was at the bottom, so we are up 3% now. Generally, you’re operating money for your lines of credit are usually funded by that, but even the fixed rates; equipment loans and land loans, they’ve all gone up as well quite a bit. Bond market is moving up, everything is moving up, just like everything cost more and when we say everything; it is like everything, including interest rates. Historically we are not high by any means. We are still probably below average, but it is such a shock from what we have been the last several years.”
Shane says there is another possibility of the Federal Reserve raising rates another half to three quarters of a percent to calm inflation.
