Belt Up for Bumps in the Road

The Resurgence of Risk

Increases in interest rates and inflation are a one-two punch, says Michael Boehlje, Purdue distinguished professor of agricultural economics, who believes inflation could be 4-5% by mid-decade.

“Interest rates could be 3-5% higher by 2015,” he says.

“Access to funds could become more problematic, especially for growers who borrow from commercial banks. A major adjustment in the commercial real-estate market (where the delinquency rate has increased from below 2% to more than 8%) could leave many local banks short of the capital to make any loans, forcing them to tighten requirements,” Boehlje says.