Journal Article

Increased Loan Demand and Higher Interest Rates May Benefit Ag Banks

Abstract: Extreme weather, geopolitical conflicts, supply chain disruptions, and rising interest rates all directly affect U.S. agriculture, which may in turn affect banks that make agricultural loans. Demand for loans from ag banks could rise following events that reduce net farm income or increase banks’ ability to reprice loans, such as supply chain disruptions or higher interest rates. But competition with other banks and nonbank financial institutions may offset some of these benefits.

Keywords: Agricultural Banks; Bank loans; Agricultural loans; Farm income;

JEL Classification: G21; Q14;

Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2022-07-13

Issue: July 13, 2022

Pages: 4