Despite Challenges in Agriculture, Farm Banks Holding Up

WASHINGTON, DC – In what was considered to be cautious lending during a boom in farmland values has actually provided farm bankers the flexibility to work with borrowers in stress. According to the American Bankers Association (ABA), farm banks have held up well despite challenges to the agriculture industry since 2014, and problem loan levels have remained modest. Citing a report from the FDIC, net farm income for 2020 is expected to increase 46 percent to $121.1 billion, due in part to record levels of government assistance and a rebound in commodity prices,. However, “absent a sustained improvement in agricultural conditions, stress is likely to continue for some farmers and their lenders.” Forecasts for 2021 point to a retreat in strength, though still above the long-term average.
(SOURCE: All Ag News)