Economics
The Next Threat Stalking American Farmers Is the End of Cheap Money
- Highest interest rates in five years signal more spending cuts
- Fed moves are new blow to agriculture after years of crop glut
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American farmers have managed to stay afloat despite years of shrinking crop values, the lowest incomes since the recession and a budding trade war with China. Now, they’re feeling a new squeeze -- borrowing money is getting more expensive as interest rates rise. For some, it may be fatal.
“Commodity prices stink, and they’re set to stink for a long time,” said Jason Barnes, 50, who has 400 head of cattle and farms 1,300 acres of corn, wheat and sunflowers about 35 miles (56 kilometers) north of Pierre, South Dakota. “We’ve been able to survive because of cheap money. You raise rates high enough, it will have a huge impact on people’s ability to continue farming."