Oklahoma AgCredit absorbs half-percentage point increase of Federal Reserve key funds rate

On December 14, 2022, the Federal Reserve announced a half-percentage point increase (0.5%) to its key federal funds rate — the fifth rate increase in less than a year.

Upon this announcement, the Oklahoma AgCredit Board of Directors and Executive Team knew the detrimental impact this could have on our members.

After unprecedented hardships in the recent 3 years, from COVID-19, wildfires, intense drought and substantial inflation on the cost of supplies, our leadership did not want to burden our members with an additional financial trial.

In response to the Federal Reserve's announcement, Oklahoma AgCredit has chosen to "eat" the half-percent rate increase for all Association-administered variable loans.

"In times such as these, we were reminded of the Farm Credit mission to serve agriculture and rural Oklahoma in good times and bad. By eating, so to speak, the rate increase, we are saving our members cumulatively almost $1 million dollars per year," says Patrick Zeka, President / CEO of Oklahoma AgCredit.

Gary Bledsoe, Board Chairman, notes, "As farmers and ranchers ourselves, we know the tribulations the agricultural and rural communities have experienced in the past few years. We hope this rate absorption not only benefits our members financially, but gives them hope and joy going into the holiday season and new year."

This rate absorption will not impact Patronage returns for the 2022 fiscal year; in fact, the Board of Directors have decided to give back the highest return rate in Oklahoma AgCredit history – reducing the average member’s interest rate by 100 basis points (1%)*. More details about our Patronage return will be announced after the new year.

For any questions regarding your loan, please reach out to your local office.

*Only eligible borrowers will receive Patronage. Borrowers who are not eligible: 1) opted out of receiving Patronage; or 2) any loan in active non-accrual status at year end; 3) have a construction loan. Borrowers who are eligible for patronage and 1) the distribution is a minimum of $50; 2) the loan is delinquent, the distribution is applied to the active loan(s). Patronage less than $10 is not distributed. Please contact your local branch if you have questions about Patronage eligibility. Branch contact information can be found at okagcredit.com.