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Farm loan rates are going up across Minnesota

The commodity loan rates are increasing to hopefully help farmers get caught up on their profit.

Posted: Dec 6, 2019 1:05 PM
Updated: Dec 6, 2019 1:05 PM

CLAREMONT, Minn.- It's been a difficult year for farmers with a number of setbacks like the extreme weather and the U.S., China trade war. These hurdles have hurt local farmers financially, but there could be a lifeline. 

Commodity loan rates are going up on corn and soybeans through the county Farm Science Agency, or FSA, which is a branch from the USDA. This will hopefully allow for some farmers to get caught up on their profit until they can sell their grain at a better price on the market. 

Corn went up 25 cents per bushel, from $1.82 to $2.07. Soybeans went from $4.97 to $6.11, increasing over a dollar. This is only on already produced grain that farmers do not have income on though. Farmer Bruce Schmal said this program will temporarily help farmers get a low-interest loan they can benefit from while they wait for a better market. "It's going to be important for farmers to have the opportunity to rely on that loan capacity to get them through until they can see some improvements in the market and hopefully improve their standing with their farming operation," explained Schmal. 

This is important to non-farmers because farmers play a huge role in our food supply. If they can't make a profit from the grain they produce and be able to make more, then it would be a different story - that's why this loan is in place. However, each loan rate increase is different depending on the county.

Farmers will pay interest until either the market goes up and they can make that profit, or if the market price lowers, that can turn over unsold grain to the FSA office and will not have to continue paying on the loan. "The commodity loan program is another tool in a farmer's toolbox that can help them get through periods of time when the cash flow is short and you're waiting for new market opportunities," Schmal said.

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