Our family seed business, Haney Farms, held two plot tours this week which really gave me an opportunity to talk to a great cross section of farmers. One of the concerns that always comes up is the discussion about rising interest rates.
Canadian farms are significantly levered even in comparison to our US neighbours. With the advent of the interest only loan and some other lending techniques some economists and even farmers are concerned about the potential affects of rising interest rates going forward. Switching farmers from floating to fixed rates is not exactly easy either with the large spread in rates between the two.
In my opinion there are two concerns with rising interest rates. One is how fast they go up and how high. It seems to be not a question of if but when in terms of the rise but just the same farmers are hesitant to lock themselves in the higher fixed rates currently being offered.
I had the great opportunity to chat with Todd Hirsch, Senior Economist with ATB Financial about how concerned farmers need to be about rising rates. Todd is highly recognized in the economist community and has a great read on the market and the economy.
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