Fed Holds Interest Rates Keeping Farm Borrowing Costs High

Jan 31, 2025
By Jean-Paul McDonald
Assistant Editor, North American Content, Farms.com

No Interest Rate Cut Means Ongoing Financial Strain for Farmers

The Federal Reserve has kept its interest rates unchanged at 4.25-4.5%, prolonging financial strain for farmers and agricultural businesses reliant on loans.

Ryan Loy, an economist at the University of Arkansas System Division of Agriculture, explained that this decision will continue to impact farmers who rely on financing. “The steady rate decision means financial strain may persist for producers with debt-heavy operations, and financial relief may take longer than expected,” he said.

The Fed reaffirmed its 2% inflation target, a policy designed to ensure economic stability while preventing excessive inflation. Loy cited housing and vehicle price hikes as primary drivers of inflation in recent months.

Fed Chair Jerome Powell noted, “We remain committed to supporting maximum employment, bringing inflation sustainably to our 2 percent goal, and keeping longer-run inflation expectations well anchored.”

Despite maintaining the current rate, Powell confirmed that the Fed is conducting a five-year review of its monetary policy, expected to conclude in late summer. The review will assess economic trends and monetary strategies but will not alter the 2% inflation target.

As borrowing costs remain high, farmers will need to adjust their financial strategies while awaiting future rate decisions.

For more information, visit the Federal Reserve website.

Photo Credit: university-of-arkansas

Video: Learning to Wrench From Dad the Hard Way

Harvest is a week out and the farm picked this week to fall apart. The truck needs a battery, the barn curtain's got a problem, and the corn and beans are telling us we're out of time to get it all fixed.

So it's a full day of wrenching. Tork supervises while I get the truck back running, then we're out at the hog barn where one rusted up part has the whole curtain system hung up. Ladder work, cable work, and a little dad-and-son disagreement about the right way to do it. We close it out walking the fields, shelling beans and checking corn, because whether everything's fixed or not, harvest starts when harvest starts.

Chapters: 00:00 Everything breaks the week before harvest 01:00 Tork supervises while I fix the truck 12:30 Out to the barn to find the curtain problem 14:30 One rusty part hung up the whole curtain 20:00 Running the curtain cable from the ladder 24:00 Walking the beans and corn before harvest 26:30 Wrapping up

We're a 6th generation family farm in southeast Iowa showing the real ups and downs of pig farming and row crop farming. No script, just the work. Subscribe and follow along.

JOIN THE BARN TALK NEWSLETTER AND GET LIVE EVENT ACCESS: We're on a mission to hit 10,000 subscribers, and when we do, we're hosting a live event at the barn. Sign up for exclusive access to tickets and details.