The Federal Reserve raised the federal funds rate four times in 2023 for a cumulative rate hike of 100 basis points, though it left rates unchanged in September and November. Higher borrowing and carrying costs have been the new normal in agriculture, a shift that will linger to some degree for the next several years. Indeed, the forecast from the Food and Agriculture Policy Research Institute (FAPRI) at the University of Missouri forecasts interest expenses in 2024 to be $12.8 billion more than what the cost of capital to producers was in 2021. It's easy to forget that the federal funds rate was at a 0 to 0.25 percent at the end of 2021, before the Fed started to raise rates in Q1 2022.   According to the USDA’s Economic R...

TAGS – North America, Macroeconomics