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Sep. 16, 2024 Source: Farm Credit Administration news release McLEAN, Va -- At its monthly meeting today, the Farm Credit Administration board received a quarterly report (PDF) on economic issues affecting agriculture, together with an update on the financial condition and performance of the Farm Credit System (System) as of June 30, 2024. To read the report click here. The latest consumer price index data indicate a slowdown in inflation, which has dropped below 3% for the first time since 2021. As the job market shows signs of softening, the Federal Reserve is widely expected to start cutting interest rates this month. Longer-term interest rates have already begun falling in recent weeks. Favorable weather has improved conditions for corn and soybeans this summer, boosting expectations for high yields this fall. Strong production and large stocks of corn and soybeans have put downward pressure on prices, with corn and soybean futures prices falling more than 30% in the past 18 months. About half of the price decline occurred in the past few months. While crop producers struggle with lower prices, livestock producers are benefiting from lower feed costs. Lower feed prices, coupled with higher product prices, have led to improved profitability in 2024, particularly for cattle, hog, and chicken producers. Strong financial positions from high incomes in 2021 and 2022 have provided a cushion for farmers as they head into a more challenging business environment. However, weak crop margins are set to further erode farm sector income this year; gains in livestock profitability will only partially offset reductions to farm sector income. The System reported solid financial results for the period ended June 30. Portfolio growth was modest in the first half of 2024, with loan volume increasing 2.1%. Loan quality remained favorable despite slightly higher credit risk measures. Year-to-date earnings through June were $3.9 billion, up 11.9% from the same period last year. Strong earnings growth also helped support capital growth. As of June 30, total capital equaled $76.8 billion, up 8.0% year over year. Overall, the System continues to be financially sound and is well positioned to meet the funding and liquidity needs of U.S. farmers and ranchers. Tweet |
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