While inflation and supply chain issues cast a cloud of doubt over profitability for 2021 and into 2022, a new ag lender survey offers an optimistic outlook for borrowers. The Fall 2021 Agricultural Lender Survey, in partnership with the American Bankers Association (ABA) and Federal Agricultural Mortgage Corporation (Farmer Mac), reported that lenders expect 80% of borrowers to be profitable in 2021 and 70% in 2022. Since first launching in 2016, this is the first year that lender study showed an increase in profitability when compared to the prior year. While much of this can be attributed to the various avenues of government support during 2021, estimated to account for roughly 38% of borrower income, it does help put farmers in a stronger financial position going into 2022.
Lenders cited their main concerns for the coming year include inflation in land prices, a decrease in loan demand and reliance on government aid.
Read more on the study analysis and view the full study here.
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