For farmers, higher interest rates may offer even less relief. Raising rates tamps down excess demand in the economy but does little to unsnarl supply bottlenecks, which lie behind much of the inflation afflicting farmers. To be sure, by slowing the economy higher rates will put downward pressure on prices of natural gas, a critical ingredient in some fertilizers. Then, too, whatever their effect on farm-input inflation, higher rates hurt farmers directly when they borrow to finance operations or land purchases. A recent Wall Street Journal article quoted DTN fertilizer prices extensively.

Source: Wall Street Journal December 17, 2021 21:55 UTC