What are ag lenders looking for in the 2023 Farm Bill?
Weather is among several factors that impact prices for producers and can certainly play a role in the need for farm loans.
So, ag lenders are watching 2023 Farm Bill discussions carefully to see how the legislation will impact borrowing.
Some lenders are expressing concerns over the large amounts of ad hoc payments over the last couple of years. Ed Elfmann with the American Bankers Association shares what moving away from those payments would look like for them.
“It’s actually funny when direct payments went away, that was something, in hindsight, we didn’t realize how much, how easy it made it for us because we knew what a producer was guaranteed to receive. Now, we have producers that, I mean they’ll get a check in September that was not an anticipated part of what we were doing. So, I think lending has changed quite a bit since the 2018 Farm Bill went in place because we had to adhere to the kind of these new rules, right? And then banking regulations require us not to just pick a number and hope it works right. We’ve got to work through that process. Are we watching? Are we worried? In a way, I’d say we’re more worried about if there are any potential cuts to crop insurance, we’d worry about that a lot more than some program changes,” according to Elfmann.
The Senate Ag Committee is meeting tomorrow to discuss crop insurance and credit.