Loans at all-time high for young, beginning and small farmers in 2020
Loans from the Farm Credit lenders to young, beginning and small farmers hit an all-time high in 2020 despite challenges from the COVID-19 pandemic.
President and CEO Todd Van Hoose tells Brownfield the company’s report indicates growth in that sector. “The expectation would have been young farmers would have been very reluctant last year, but our numbers look very different than that.” Van Hoose says. “We had big increases in loans to young farmers, big increases in loans to beginning farmers and big increases in loans to small farmers so it’s good news.”
The report shows nearly 220,000 loans were given worth almost $59 billion with many farmers taking advantage of the Paycheck Protection Program.
He says the increase is driven partly by low interest rates. “If you were going to borrow some money, last year was a good time to do it because interest rates were historically low,” he says. “We think that led to a lot of refinancing and a lot of people taking a loan to do something new.”
Van Hoose also says the data could signal more young farmers returning to the farm but also an increase in costs. “Price inflation, land prices are going up in a lot of places. The price of supplies and commodities and things like that farmers use are definitely going up that’s causing them to borrow some more money.”
A young farmer is 35 or younger, a beginning farmer has 10 years or less of farming experience and a small farmer has gross annual farm sales of less than $250,000.