Ag Lenders Expect Borrowers to be Profitable This Year
By: Jody Heemstra
The American Bankers Association and the Federal Agricultural Mortgage Corporation released their most recent survey of agricultural lenders. The good news is that the lenders expect 80 percent of their borrowers to show a profit in 2021.
Looking ahead to next year, the lenders expect that 70 percent of their borrowers will remain profitable through 2022. The report says the agricultural economy was “shaken” by the events of 2020. For the first time in the history of the survey that began in 2016, most of the ag lenders expect that overall farm profitability increased in the prior year. Almost 70 percent of the lenders say the profitability largely stemmed from government support, which lenders say made up 38 percent of borrowers’ net income.
Lenders expect some deterioration in conditions next year, with almost 30 percent expecting a decline in farm profitability during 2022. Lenders cited inflationary pressure as the number one concern for producers.
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