Farm Loan Rates Continue to Be Favorable

The Chicago Federal Reserve publishes a quarterly Ag Letter.  The 2017 first quarter letter showed a chart summarizing the interest rates charged by banks in their system over the previous five quarters.

Interest rates on Operating Loans have ranged from a low of 4.87% in the third quarter of 2016 to a current high of 5.13%.  Although this is up, it is only by about 27 basis points, which is probably a result of the Federal Reserve hike in December, 2016.

Feeder Cattle loans have ranged from a low of 4.95% (again in the third quarter) to the current high of 5.27%.

Real estate loan rates ranged from 4.57% in the second and third quarter of last year to the current 4.8% rate.

Although all of these rates are higher than a year ago, the net change is still fairly minor.  As the Federal Reserve continues to raise rates, it will be interesting to see how these rates will continue to change.

  • Principal
  • CliftonLarsonAllen
  • Yakima, Washington
  • 509-823-2920

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives a combine each summer for his cousins and that is what he considers a vacation.

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