Higher Interest Rates Could Lower Crop Prices

Dec 28, 2015
Jeff Engel, flickr Creative Commons

The Federal Reserve is set to hike interest rates over the next few years. That’s likely to cause a drop in prices of the Midwest’s most important crops, but not by much.

Higher interest rates can slow the economy, including demand for crops like corn and soybeans. At the same time, storing grain becomes more expensive. Farmers are eager to sell and that leaves excess product on the market.

The fall harvest of crops in Kansas is mostly in the bin now. Winter wheat planting is done.

Kansas farmers and ranchers are taking advantage of the seasonal lull this week to gather together to socialize, hash out farm policy aims and gather information at three major agricultural conventions.

On Monday, more 1,000 farmers are heading to Manhattan to layout the roadmap for public policy issues that the Kansas Farm Bureau members consider important to agriculture.

On Wednesday, the Kansas Livestock Association kicks off its three-day convention beginning in Wichita.

Parker Michael Knight / Flickr

The federal government has declared a disaster in 82 Kansas counties because of the drought conditions.

The heat and a lack of rain have taken a toll on agriculture in the state.

The decision makes assistance available to farmers and ranchers.