On Aug. 5th Standard and Poor’s announced its decision to downgrade the rating of U.S. sovereign debt from the highest quality rating of “AAA” to “AA+ with a negative outlook”.
The other two large certified credit rating agencies, Moody’s and Fitch Ratings, have retained their “AAA” rating, although Moody’s reserved the right to further downgrade their “AAA” rating given the June issuance of its “negative outlook” of the U.S. debt.
According to USDA Secretary Vilsack, “it’s premature to speculate on the effects of recent credit rating downgrades on farm loans and farm programs or in the upcoming farm bill debates.”
However, if these matters are not resolved the downgraded credit rating will eventually mean higher interest rates for anyone borrowing money, including farmers who typically leverage a sizeable portion of the capital needed on today’s farming operation.
As potential spending reductions or revenue measures are being considered, NAWG will continue to work with key members of Congress to make sure essential agricultural programs are maintained and look for ways to streamline or make these programs more effective.