U.S. farm banks increased lending to farmers by 5.3 percent to $108 million in 2018, according to the American Bankers Association’s annual Farm Bank Performance Report.
The report, which analyzes the performance of the 1,772 banks that specialize in agricultural lending, found that more than 94 percent of farm banks were profitable in 2018. Further, more than 63 percent reporting an increase in earnings. Overall, at the end of 2018, banks held $186 billion in farm and ranch loans.
“Even in the face of a slowing ag economy and harsh weather, farm banks continue to perform strongly while meeting the credit needs of farmers, ranchers, and their communities,” ABA Chief Economist James Chessen said. “They play a critical role in the success of farms large and small, and their civic engagement and the jobs they provide make them the lifeblood of many rural communities across the country.”
The report also found that the equity capital at farm banks increased 6.1 percent to $48.7 billion.
Looking at farm loans on a regional basis, farm loans in the Northeast increased by 14.7 percent to $1.3 billion. In the South, farm loans jumped by 7.49 percent to $8.4 billion, while loans in the Cornbelt went up by 5.24 percent to $47.9 billion. In the Plains region, farm loans increased 4.64 percent to $40.3 billion, while in the West they went up 5.4 percent to $10.1 billion.