Fed cuts interest rates to near zero, possibly saving some farms
The Federal Reserve has cut interest rates to near zero in response to the COVID-19 pandemic.
Minnesota Soybean Research and Promotion Council CEO Tom Slunecka calls the move a saving grace for some farmers.
“At these times, whenever we’re dipping into the equity of our farms (or) borrowing against the equity of that land just to continue to operate, one percent can mean an awful lot.”
He tells Brownfield the option to refinance will probably depend on the lender and whether the current rate is locked in.
“If you have (locked in rates) you may need to go renegotiate that. But I would say on average, if you look at a percent is probably the same as $30,000 to $40,000 to the bottom line for your operation.”
Slunecka says interest rates were already historically low and he expects them to stay that way for a while.