Interest Increase
Interest rate increase.
In reading the weekly newsletter from Idaho Cattle Association, interest rates were brought up so I called Executive Dir. Wyatt Prescott. “What effect does the Fed increasing interest rates have on cattle?I think that everybody is speculating out there on how it affects everything. I fully understand why they did it. I think you need some cushion in there in case we have to back it back up down the road. Over time I think we have heard everyone continually say they need to do it, they need to do it, so eventually they did. We don't know yet what it means for us. There is speculation that obviously you increase the evaluation of your money, it's going to put a boost in the dollar's status. I have heard speculation out there of a 14% increase in the value of the US dollar. That can be problematic for us as an industry that depends on exports but that kind of immediate response, I don't know how immediate or not immediate it would be. I just put the article in there because I thought it was something folks could keep an eye on. We borrow a lot of money in our industry and in production and a quarter percent on the prime is the basis for the money we borrow but the banks have been phasing that in for some time so there is probably no immediate reaction or response. It's just important to know about because we have such a global dynamic and integrated industry.
