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Journal Article
How Mergers in the Farm Credit System Have Affected Ag Banks
Commercial banks and the Farm Credit System (FCS) have been the most important sources of agricultural loans in the United States in recent decades. Since the 1990s, however, mergers and acquisitions have increasingly concentrated both the FCS and commercial banks, raising concerns about potential effects on the agricultural credit market. Starting in the 2000s, the FCS gained a substantial market share of total agricultural debt, lending credibility to these concerns. Thus far, however, how the FCS’s evolving size and scope affect agricultural bank operations, particularly through mergers, ...
Journal Article
Mapping Stress in Agricultural Lending
Repayment rates for farm loans have declined every quarter since the second quarter of 2013, suggesting heightened stress in agricultural lending. If repayment rates continue to decline?and the outlook for the agricultural sector remains downbeat?agricultural banks could become less able to lend to creditworthy farm borrowers. Thus, declining repayment rates could lead to adverse outcomes for agricultural banks, farmers, and the rural economies they serve. {{p}} Cortney Cowley uses data from the Federal Reserve Bank of Kansas City?s Ag Credit Survey to model and map areas with the highest ...
Journal Article
Increased Loan Demand and Higher Interest Rates May Benefit Ag Banks
Extreme weather, geopolitical conflicts, supply chain disruptions, and rising interest rates all directly affectU.S. agriculture, which may in turn affect banks that make agricultural loans. Demand for loans from agbanks could rise following events that reduce net farm income or increase banks’ ability to reprice loans,such as supply chain disruptions or higher interest rates. But competition with other banks and nonbankfinancial institutions may offset some of these benefits.