|
Glasgow, Ky | As with any other business the ability to withstand tough economic times varies from one farming operation to the next.
I see the highly leveraged operations which rent most of their land as being the most at risk if, and when, interest rates rise. As we have already seen the profit per acre in grains is being squeezed by higher input and rental rates. The ability of these operations to shift short term debt to long term is also limited along with the tightening of credit.
Operations which own a significant portion of the land they farm and are carrying little debt are in a much better position to weather the storm. If commodity prices stay up they can reap the benefits without having to worry about losing their land or how high rents are getting.
I just hope that the livestock people are able to go through this and come out in decent shape. The short term outlook for them looks tough.
| |
|
Stagflation vs. commodities
