DEMAND NEW HOLLAND https://agriculture.newholland.com/nar/en-us Bob Mark New Holland Sales Ltd. Campbellford • 705-653-3700 Bob Mark New Holland Sales Ltd. Lindsay • 705-324-2221 Bob Mark New Holland Sales Ltd. Napanee • 613-354-9244 Bob Mark New Holland Sales Ltd. Sunderland • 705-357-3121 Delta Power Equipment Mitchell • 519-348-8467 Delta Power Equipment St. Marys • 519-349-2180 Delta Power Equipment Tilbury • 519-682-9090 Delta Power Equipment Waterford • 519-443-8622 Delta Power Equipment Watford • 519-849-2744 Delta Power Equipment Winchester • 613-774-2887 Ebert Welding Ltd. New Liskeard • 705-647-6896 ESM Farm Equipment Ltd. Wallenstein • 519-669-5176 Maxville Farm Machinery Ltd. Maxville • 613-527-2834 McCauley Equipment Sales Orillia • 705-325-4424 Oneida New Holland Caledonia • 905-765-5011 Oneida New Holland St Catharines • 905-688-5160 Regional Tractor Sales Ltd. Freelton • 905-659-1094 Richards Equipment Inc. Barrie • 705-721-5530 Robert’s Farm Equipment Sales, Inc. Chesley • 519-363-3192 Robert’s Farm Equipment Sales, Inc. Mount Forest • 519-323-2755 Robert’s Farm Equipment Sales, Inc. Walton • 519-887-6365 Smiths Farm Equipment (Jasper) Ltd. Jasper • 613-283-1758 Stewart’s Equipment Erin • 519-833-9616 EQUIPPED FOR A NEW WORLD™ Inflation & interest rates ing land and replacing machinery.” Gervais concurs, saying robust farm revenues supported continued increases in asset values, including farmland, where land values in 2022 rose at an average annual growth of 14.6 per cent. “Investments on Canadian farms have been strong as the increase in farmland values and continued growth in farm cash receipts have supported capital expenditures,” Gervais says. Holding inventory Higher interest rates can also discourage farmers from holding onto inventory. Holding inventory comes at a cost – either the interest paid if the business has debt, or the interest that would have been collected on savings if the inventory had been sold. Olson hasn’t come across producers who’ve changed their marketing decisions over the cost of holding grain – yet. “Our grain clients over the last few years have had some really good years, so most of them aren’t carrying high debt loads on their inventory,” Olson says. “ e majority of clients I’m dealing with are doing their normal marketing as they would have, whether they usually held inventory or sold inventory.” at’s not to say this can’t change. Farmers carrying higher debt loads may need to sell their grain sooner if they’ve borrowed signi cantly against their inventory. “ en hoping for a small increase in the price of a commodity is o set by the carrying cost of the interest,” Olson says. Mitigation actions Gervais says farmers are adapting to a higher interest rate environment by strategically reviewing its impact to their bottom lines. “Some farms may opt to accelerate repayment of loans, while others may want to stand pat and use cash ow to maintain operations.” He recommends farmers review their own current loan terms, timing, and structure, as well as go back to some farm management basics. “Knowing their cost of production, when loans are up for renewal, can allow them to take proactive measures, including around scenario planning and interest rate sensitivity,” Gervais says, adding that producers should also speak to their lenders about xed versus variable rates. Olson warns the full e ects of high interest rates may yet to have been felt. He points out many farmers had locked in their rates prior to the BoC’s hikes, and that some of those loans haven’t come due yet. BF RICHARD KAMCHEN Richard Kamchen is a veteran agricultural freelance writer based in Winnipeg, Man.
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