Pandemic Relief vs. Lending: The changing landscape of farm economics

The U.S. agriculture industry is confronting a new economic reality as pandemic aid ends, pushing producers into debt as a form of financial relief from high input costs.

Once a lifeline for farmers during the pandemic, government payments have dwindled, leading to a significant uptick in farm lending now surpassing $100 billion.

According to the American Bankers Association, heightened production costs and an end to pandemic subsidies for farmers has driven up demand for agricultural loans by nearly 7% in the last year. This surge has propelled total farm lending to a staggering $110 billion.

Farm banks are now emerging as vital pillars in supporting small-scale farmers, holding over $40 billion in credit. As of the end of 2023, banks nationwide collectively hold just shy of $200 billion in farm and ranch loans, underscoring the shifting financial landscape of American agriculture.

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