Rising interest rates don't just have implications for existing debt.

When borrowed money gets more expensive, it also raises questions about taking on new investments.

The current economy presents farmers with competing incentives, said Thorsten Egelkraut, an agricultural economist at Oregon State University.

Should they lock in low rates or guard their cash flow? Unfortunately, there are no easy answers.

Expanding one's business during a downturn is a lot like investing in the stock market: The best time to snatch up bargains is when everybody else is scared to buy, Egelkraut said.

The same concept largely applies to interest rates, since their rise is expected to track the economic recovery, according to credit experts.

"The longer you wait until the uncertainty is resolved, the smaller your risk becomes," Egelkraut said. "On the other hand, there's a smaller potential for gains as well."

While interest rates are an important part of making business decisions, potential fluctuations shouldn't be used as an excuse for rushed action, said Dave Kohl, a retired Virginia Tech University economist.

Any investment needs to be viewed in perspective of the farmers' current debt load and overall financial strategy, he said. "It's much more than just interest rates."

-- Mateusz Perkowski

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