Rising Concerns: What ag leaders warn is their top worry heading into next year

interest rates_financial graph on technology abstract background_Photo by monsitj via Adobe Stock_190463205.jpg

Photo by monsitj via Adobe Stock

A new report shows the top concern facing ag lenders heading into next year is interest rates.

The Ag Lender Survey shows nearly half of those who responded ranked interest rate volatility as number one, which is up 35.5 percentage points from last year. It shows interest rates have boosted bank net interest margins, but fears of weakening loan demand and strong competition are expected to cut into yields.

Most lenders surveyed say farm profitability increased over the last year but it still remains below the prior average.

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Livestock and government payments provide a boost, but crop receipts and rising expenses keep pressure on margins. Strong financial planning remains key in a volatile environment.

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