The financial health of banks lending to agriculture

Most commercial banks lending to agriculture have weathered the financial tsunami of the past 36 months. Many of the agricultural-related banks did not participate aggressively in the high-risk housing or commercial real estate markets. As a result, agricultural banks did not sustain the substantial liquidity and capital problems faced by many global financial institutions. In general, credit remained available for farmers and ranchers throughout the financial crisis. The profitability of production agriculture through the crisis certainly played a critical role in credit quality and quantity at agricultural banks. Agricultural lending increased $13 billion from 2007 through 2010. At the end of 2010, delinquency rates on agricultural loans (2.55%) are lower than the other loan types and far below agricultural delinquency rates exhibited during the agricultural financial crisis in the late 1980s...more