New Ag Loan Slow Down in Fourth Quarter01/23/2017
Farm lending activity at commercial banks slowed significantly in the fourth quarter as lenders and borrowers assessed economic prospects for 2017. Despite persistent increases in the level of outstanding farm debt and ongoing demand for loan renewals, new loan originations dropped sharply.
Some of the reduced loan volume likely stemmed from lower costs of farm inputs. However, as the outlook for farm income generally has remained weak and farmland values have continued to decline, both lenders and borrowers may have been more apprehensive about adding new debt heading into 2017.