Ag Lenders Are Feeling Squeezed by the Struggling Economy

President Trump’s trade war seems to be pushing the rural economy closer and closer to a meltdown.  According to Politico, economic challenges in agriculture are weighing heavier on banks that lend to farmers and ranchers.  Farmers are getting slammed on all sides by retaliatory tariffs, unusually bad weather, as well as a five-year drop in farm incomes.

Iowa corn and soybean farmer Grant Kimberly told Politico that agriculture has seen more than its share of “black swans” in the past couple of years. “We’ve had bad weather, we’ve had African Swine Fever, and we’ve had trade wars,” he says. “I’d say this is pretty unprecedented territory. We haven’t seen anything like this since the 1980's.”

During the first quarter of 2019, the farm loan default rate hit the highest level it’s been at in seven years.  One in five farm borrowers increased the amount of debt they carried over from 2018 to the first quarter of this year.  Producers are estimated to hold approximately $427 billion in debt this year, the most since the 1980's farm crisis.

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