Farmers Should Do OK Financially in 2024

Ag lenders say economic conditions have softened and margins are thinner compared to recent years, but financial stress in agriculture should be limited this year.

Ty Kreitman, an associate economist with the Federal Reserve Bank of Kansas City, says agriculture is coming off a few years of exceptional strength. “That strength allows borrowers to put cash on their balance sheet.”

But even though the outlook is ok this year, he says several risks remain for the ag sector including higher interest rates. “On average, farmers and ranchers have an 8.5 to 9.5% interest rate or greater.”

Kreitman says what happens beyond 2024 depends on how long those higher interest rates last and what happens with commodity prices.

EDITOR’S TAKE:

This year may not be a record breaker for farmer/rancher net farm income, but according to the Federal Reserve Bank of Kansas City, 2024 will be “OK”. Incomes for farmers/ranchers in previous record years were off the charts and they not only paid down debt, but also accumulated cash. In addition, their land values escalated as well, thus, making the balance sheet look rock solid. Therefore, farmers/ranchers can survive a downturn and should still rate a position at the top of your customer prospect list. You also have a secret weapon that can be used to help farmers and ranchers in your area to lower their operating expenses – it’s called AgPack® offering up to $35,000 in exclusive rebates and discounts from nationally known brands!