ABA Chief Economist Sees Reason for Optimism Amid Challenges in Ag Sector
ABA Banking Journal
While the agricultural sector continues to face numerous challenges, “there’s a lot of optimism” among ag lenders looking ahead to the next 12 months, ABA Chief Economist James Chessen said in an interview today with RFD-TV’s “Market Day Report” program. “Ag lenders are concerned obviously about credit quality—that’s the biggest thing that they’re worried about,” Chessen said, recapping findings from a recent ABA/Farmer Mac survey of ag lenders. “They see compression in farm profits, which gives them pause, but there’s some positive signs. Fortunately, land prices continue to be reasonably strong, and the hope is that they’ll stay that way.”
Chessen added that ag lenders said despite current conditions, they expect to see improvement in approval rates over the next year as they work to provide farmers with the credit they need. “They’re used to working with their borrowers—it’s not the first rodeo they’ve gone through with an ag cycle. They know how to work with their farmers and make sure they’ve got the right amount of debt so that they can continue to farm, get their business moving, but don’t take on more than they can handle.”
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