Farmers Borrowing Cash with Interest Rates at Historic Lows - KXNet.com - Bismarck/Minot/Williston/Dickinson-KXNEWS,ND

Farmers Borrowing Cash with Interest Rates at Historic Lows

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Interest rates at never seen before lows have many people borrowing more money--including farmers.
Reporter Sarah Gustin visits with Ag lenders in Napoleon about the need for larger lines of credit.

Interest rates are low and it takes a lot of cash to farm. 
(Bruce Wentz / Stock Growers Executive VP) "Crop operating, would be number one. The operating inputs then the livestock and then the machinery."
Those are a few of the purchases farmers have been making.
Bruce Wentz is the  Executive Vice President at Stock Growers Bank in Napoleon.
Wentz says there is more borrowing going on in this bank than he can ever remember in the past 3 decades.
(Bruce Wentz / Stock Growers Executive VP) "We are doing lines of credit that are in the upwards of 1 million dollars or more. When I first started in banking if a guy borrowed a 100 thousand dollars that was a lot." 
Down the street at First Community Credit Union Branch Manager Norman Kleppe says many of his clients are taking advantage of interest rates hovering around the 3% mark.
(Norman Kleppe / Ag Lender) "We've seen land rent especially jump. 30-40% increase from where it was following these land values. So the overall input costs have tripled on most guys in the last 2-3 years here. Commodity prices have been good, but the demand for operating keeps increasing as these prices keep rising."
(Sarah Gustin / sgustin@kxnet.com) "With land prices at historic highs. Acres like these are part of the reason for those high lines of lending credit."
(Norman Kleppe / Ag Lender) "Towards the end of 2012 we saw a lot of increase in Ag real estate requests. I think a baulk of that was on capitol gains changing. So a lot of land owners decided if I am going to sell land now is the time to look at doing it." 
(Bruce Wentz / Stock Growers Executive VP) "The Ag economy has been awesome." 

Kleppe says machinery has been some of the most popular purchase for producers.  

 

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