March 25, 2020
Farm Credit East Customers:
Farm Credit East continues to monitor the COVID-19 pandemic and has taken steps to ensure the health and safety of our customers and dedicated team. We’ve discontinued in-person meetings, closed offices to visitors and most staff are working remotely, with office staffing limited to the minimum needed to maintain operations so we can continue to serve our members.
Working with Customers
Given the length and scope of the pandemic, we know that it is taking a personal toll on many and it will impact nearly all customer businesses. Please know that Farm Credit East will work with customers impacted by COVID-19 just as we would if the financial challenges were caused by low prices, marketing disruptions, weather or other factors.
A number of the states where we do business have directed specific actions to help borrowers. Farm Credit East will follow any applicable directives, but we are not limiting our actions to prescribed forms of assistance as we intend to work with customers on a case-by-case basis to find the best solution. Our team has the tools and flexibility to make modifications to loans and help customers get through this difficult period.
Variable Interest Rates
Farm Credit East will lower its variable interest rates by 100 basis points, or 1%, on April 1. This follows the Federal Reserve’s actions in March where it lowered the Fed funds rate 150 basis points, or 1.5%. Farm Credit East adjusts variable rates based on our cost of funds. Typically, our cost of funds closely tracks the Fed actions, but this month it has not. When Farm Credit East’s variable funding cost decreases further, as we expect it will at some point, there will be additional variable rate reductions.
Farm Credit East is able to offer competitive fixed rates and early in 2020, fixed rates were at historically low levels. Since the COVID-19 pandemic has escalated in the U.S., there has been significant volatility in the bond market which is impacting Farm Credit bonds as well. For now, we can still offer long-term fixed rates, but the volatility means investors are uncertain and demanding higher returns than we have seen recently, which is reflected in higher fixed rates than were available earlier in the year.
Priorities in Uncertain Times
No one knows how long this pandemic will last, or when people can resume normal activities. While COVID-19 has forced the closure of some customer businesses, many are continuing operations as nearly all Farm Credit East customers are considered essential, and continue to produce the food, fiber and other products we all rely upon.
It’s with that spirit the entire Farm Credit East team continues its mission to support customers. Though we can’t come visit face-to-face, our team is only a text, phone call or email away. If you’re being impacted by COVID-19 or have questions about your loans or interest rates, please contact your local branch office.
Thank you for being a member of Farm Credit East – we will get through this together.