Interest rates

Adding interest rates to the list of uncertainties for farmers


In agriculture, the only thing that is certain is that you will face uncertainties year after year. From the weather to your costs of seeds and fertilizers and other inputs, not to mention equipment and even farm labor, uncertainty is always present. There was too much to handle in the 2020s.

“We certainly hope there will be more certainty in the future, but I think we all understand that there are challenges ahead,” says Bill York of FarmOp Capital.

When we spoke with him in March at the Commodity Classic, York said the current atmosphere also makes it difficult to determine the direction interest rates are heading.

“The current market momentum, not only from commodity values, input costs, general market uncertainty and inflation which is strong and shows no signs of slowing down, we expect that interest rates continue to rise and probably accelerate.”

His company, FarmOp Capital says it has never been more important for farmers to manage their risk by planning ahead financially. A fixed rate loan for farming operations can help.

“That’s one of the value propositions of our lending product,” he said. “Our loans are fixed, so we lock in our loans now and that loan will remain fixed for the duration of the loan. So if that loan is 17 or 18 months, that rate will remain throughout the loan. But the rate at which rates rise is uncertain, although the additional uncertainty will likely cause rates to rise significantly.

The company is now in its 4and crop year according to York.

“Our loan structure is based on farmers’ ability to produce a crop, their crop insurance or their risk management strategies, so our collateral is the crop itself. We have really focused on farmers who rent a significant portion of their land,” he added. “When we look at this segment, it is the fastest growing segment and has been for some time.

Learn more in the full interview with York, CEO since FarmOp Capital’s inception in 2017, and now Executive Chairman and Interim Chief Revenue Officer.

Keir Renick, co-founder of FarmOp Capital and former chief financial officer, has been named the company’s new chief executive.