Agricultural Economics Department


Date of this Version



Cornhusker Economics.


Used by permission.


For those involved in agriculture, it has been quite a while since interest rates on farm real estate, equipment, and operating lines have been as high as they are for the industry. As the fall harvest winds down and producers focus on next year, interest rates on operating lines may cause shock. It has been over 20 years since interest rates on operating lines exceeded 10%. To better understand what may be causing interest rates on operating lines to rise, it will be beneficial to understand some basic monetary policy tools the Fed has at its disposal. The tool receiving heavy attention of late, and the one (often incorrectly, but) frequently reported on by the media, is the fed funds rate.