Ag Lender Survey Reveals Bankers Top Concerns
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By: NAFB News Service
The Fall 2020 Agricultural Lender Survey report shows that ag lenders continue to remain focused on credit quality, even as the farm economy continues to work through the prolonged downturn caused by COVID-19.
The survey is from the American Bankers Association and the Federal Agricultural Mortgage Corporation, also known as Farmer Mac. When it comes to their customers, lenders continue to be most concerned about liquidity, income, and leverage. Uncertainty regarding tariffs and trade, the weather, the impacts of COVID-19, and the resulting downturn are close behind.
“Facing a global pandemic and an unprecedented economic downturn, agricultural lenders’ concerns for both their institutions and ag borrowers remain focused on business fundamentals,” says Tyler Mondres, director of research at ABA. “Nevertheless, lenders remain prepared to continue providing support to the farm economy through these challenging times.” The ag economy and farm income remain stressed in 2020.
On average, lenders report that just under 51 percent of their ag borrowers were profitable in 2020, down from 57 percent last year. About half of the lenders don’t expect profitability to improve in 2021.
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