Right-sizing Cash Flow: Farm and ranch customers should hedge their interest rate risk

[...]of all of the seemingly endless demand for agricultural production, farmers and ranchers started paying more and more for the principal asset of farming - land. During this period of historic low interest rates bankers can leverage their unique position to counsel their customers in a way that...

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Bibliographic Details
Published inBank News Vol. 120; no. 1; pp. 26 - 27
Main Authors Blanchfield, John, Malcolm, Heather
Format Trade Publication Article
LanguageEnglish
Published Minneapolis NFR Communications Inc 01.01.2020
Subjects
Agricultural banking
Agricultural lending
Agricultural production
Cash flow
Customers
Farmers
Government sponsored enterprises
Interest rates
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Summary:[...]of all of the seemingly endless demand for agricultural production, farmers and ranchers started paying more and more for the principal asset of farming - land. During this period of historic low interest rates bankers can leverage their unique position to counsel their customers in a way that might result in them being better prepared for a period of interest rate turbulence. Seeing what high interest rates did to many farm and ranch operations, bankers advocated for a vehicle that would allow them to safely structure debt with fixed rates so farm and ranch businesses would be insulated from future rate shocks.
ISSN:0005-5123