Nowhere but up from here: will an increasing interest rate affect your farm?

Jul 14, 2017

Bank of Canada raises lending rate up to 0.75 per cent from 0.5 per cent

By Kaitlynn Anderson

Farms.com

Agriculture will be able to manage the recent interest rate growth, as well as the one expected this fall, according to J.P. Gervais, chief agricultural economist at Farm Credit Canada.

The Bank of Canada increased the interest rate by a quarter of a percentage point earlier this week, up to 0.75 percent from 0.5 per cent.

This rate change is the first increase since September 2010, according to data collected by the Bank of Canada.

Source: Tradingeconomics.com

“This increase is not significant enough for most farmers and agribusiness operators to revise their business strategies, but I recommend they consider reviewing their long-term financing options with the expectation that this increase could be the beginning of a slow and gradual increase,” Gervais said in a release by FCC on Wednesday.

Producers are advised to review their personal risk tolerance when deciding between a fixed-rate or a variable-rate mortgage.

The chief economist remains optimistic, reminding Canadians that rising interest rates are an occurrence that an entire generation has yet to experience.

“Rates have been going down and have been low for many years. So, to them, this is something new that leaves them wondering,” Gervais said in an article released by FCC this morning.

For more information on why interest rates rise and the effects of the increase, watch the following video from the Financial Post.

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.