Using the Kansas City Federal Reserve’s farm loan summary data, the economists at Agricultural Economic Insights measured how much it costs to borrow $1,000 for farm machinery. For the first half of 2025, the cost was $154 for every $1,000 borrowed. Going back to 1977, producers have never spent this much to finance $1,000 of farm equipment debt. In recent years, the measure was approximately $135 in 2024 and 2023. In 2022, the expense was $100, and only $79 in 2021.
At first glance, the 2025 record may be surprising as it doesn’t align with the 1980s, when the average interest rate on a farm machinery loan approached 18 percent in 1981. Back then, the total interest expense for the life of the loan remained low because the average duration was short, usually 11 months. By the first half of 2025, the average loan maturity was 45.3 months.
Read more here: https://aei.ag/overview/article/farm-machinery-interest-expense-at-all-time-highs
