While interest rates on farm loans are still relatively cheap by historical standards, the best deals are apparently in the rear-view mirror. Rates on farm loans moved higher in the past month, following the trend in most benchmarks for term debt.
Rates for 10-year fixed farm land mortgages moved to 7.5% recently, reflecting a move in the Treasury note for that duration. Yields on the government's note are up more than 1.5% since making lows in December; ag rates haven't risen that much, though they didn't fall as dramatically during the depths of the financial crisis, either.
Investors increasingly are demanding higher rates on term debt, especially on the long end of the yield curve, because inflation fears are once again in the air. Massive government debt could trigger inflation, though so far there's little direct evidence of rising prices.
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