Farm Loans Increasing in 2012

Major banks across the country are reporting increased demand for farm and agricultural loans in 2012, the Federal Reserve Bank of Kansas City said earlier this week. The demand is being spurred by increased investment in farm machinery and infrastructure upgrades.

Despite the current drought that is hammering farmers across the country, the last few years have been good to the agricultural sector. Increased demand for major grains (in part due to increased production and consumption of ethanol and other biofuels) has driven up crop prices and raised farm incomes to record highs.

Cash-rich farmers are using this opportunity to retire some debt, but also to invest in major farm upgrades (such as new machinery, silos, land improvements, etc.).

“During the first quarter, commercial banks reported a 1.4 percent increase in total agricultural loan volume, led by stronger gains in non-real estate farm loans,” the Fed said in its agricultural finance databook. “A sampling of national agricultural loan activity during the first full week of May suggested strong agricultural lending during the second quarter. Non-real estate loans were up almost 3 percent from the previous year.”

To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting

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Written by: Justin Ellison / Farm Plus Staff Writer