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How are ag banks doing?

During a webinar Thursday, Kansas City Federal Reserve ag economist Nathan Kauffman was asked how he thinks ag and rural banks are doing, considering agriculture’s struggles related to the coronavirus outbreak

Kauffman indicated most banks are currently in pretty good shape. He says they were well-positioned heading into the coronavirus outbreak.

“Even though agriculture has been in a pretty long downturn, banks have been pretty well capitalized. Even though delinquencies on loans have been picking up a little bit, it hasn’t led to systemic problems in banking—even in ag banking,” Kauffman says.

“If you do see challenges with liquidity and if cash flow is low and you start to see payment problems, you could see some of those banks also having challenges as well—and especially in the cattle industry. If you’re a bank or an entity that’s lending into cattle, or hogs for that matter, there may be some real concerns in that market.”

The webinar was sponsored by the University of Nebraska ag economics department.