Charlie,
The $600B in Quatitative Easing number 2... directly lowered US interest rates on farm loans.
From the DTN article 'Fed Action Hits Farmers' Sweet Spot'.
"Look what happened to benchmark Farm Credit System interest rates tracked by DTN daily last week, immediately after the Fed announcement. Rates on 5-year fixed rate loans at Farm Credit Services of Mid-America slipped to 3.8 percent, down from 5.4 percent in April. (The bellwether 10-year Treasuries slipped from 3.96 percent in April to about 2.37 percent in early October. ) Contrast that with 1983 when 10-year Treasuries averaged 13.91 percent.
Cheap credit and a cheap U.S. dollar act as a kind of export subsidy for U.S. farm products. That’s one of the reasons, for example, that U.S. soybean exports to China have doubled in about the last five years, even though the price in dollar terms has exploded. In other words, a devalued dollar immunizes foreign buyers from the $6 corn and $13 soybean rally."
How do Canadian farmers compete if we do not have access to Capital at 'competitive' rates?
The $600B in Quatitative Easing number 2... directly lowered US interest rates on farm loans.
From the DTN article 'Fed Action Hits Farmers' Sweet Spot'.
"Look what happened to benchmark Farm Credit System interest rates tracked by DTN daily last week, immediately after the Fed announcement. Rates on 5-year fixed rate loans at Farm Credit Services of Mid-America slipped to 3.8 percent, down from 5.4 percent in April. (The bellwether 10-year Treasuries slipped from 3.96 percent in April to about 2.37 percent in early October. ) Contrast that with 1983 when 10-year Treasuries averaged 13.91 percent.
Cheap credit and a cheap U.S. dollar act as a kind of export subsidy for U.S. farm products. That’s one of the reasons, for example, that U.S. soybean exports to China have doubled in about the last five years, even though the price in dollar terms has exploded. In other words, a devalued dollar immunizes foreign buyers from the $6 corn and $13 soybean rally."
How do Canadian farmers compete if we do not have access to Capital at 'competitive' rates?
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