Ag Lenders Build Equity While Supporting Rural Communities

WASHINGTON, DC – Agricultural lending by the nation’s farm banks dipped nearly 2 percent last year ($98.6 billion) as demand for agricultural production loans declined slightly, according to the American Bankers Association’s (ABA) annual Farm Bank Performance Report released today.

Agricultural production loan demand declined almost 7 percent due to rising costs, supply and production bottlenecks, price volatility and an increase in federal cash payments, the report found. Government payments also enabled producers to pay down existing loan balances. Farm banks continued to increase equity capital, a 9 percent rise ($52 billion) while Tier 1 capital improved by more than 7 percent ($48.3 billion).

The report also found that farm banks supported rural communities through the Paycheck Protection Program (PPP) by holding 172,818 PPP loans worth $12.7 billion on their balance sheets at the end of 2020. Farm banks distributed these loans via more than 7,700 branches across rural America.
(SOURCE: All Ag News)