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Despite input prices, FCA Administrator says farm economy is strong in 2022

The Chairman and CEO of the Farm Credit Administration says loan growth over the last two years signals a strong ag economy. 

Glen Smith tells Brownfield that will likely continue this year despite concerns over inflation and input costs. “Farmers and ranchers are price takers and not setters. When those input costs are so high and very sticky about coming down.  That could potentially create a tenuous situation down the road that we’re very much aware of.”

But, he says, higher commodity prices are supporting a healthy lending environment. “As long as we have high prices, and the availability to lock in future high prices, it absolutely pays to throw high price inputs into the operation because you get a high return on it.”   

Smith says there was an increase in lending recently but that was because of low interest rates. “Many operators took advantage of refinancing their operations. Land values have held up well and have advanced quite rapidly in the last year in most areas of the country.”  

He says increases in interest rates could be another factor.