Let’s be honest, 2021 was not anyone’s favorite year, but the year did positively impact many things. For example, the real estate market exploded all over the United States. This not only impacted suburban areas, but rural areas started booming as well. Everyone wanted their own slice of land, whether to start their operations or just enjoy the views from their front porch.
The one thing that every agriculturalist can count on is the uncertainty of the agricultural markets. The agricultural industry is a never-ending roller coaster ride that goes up and peaks and then crashes to the very bottom. This Fall, Farmer Mac released its quarterly edition of ‘The Feed’ and the article reviews those highs and lows of the agricultural industry.
2021 Data Starting To Come In
Everyone knows that being involved in agriculture isn’t going to make you rich, but according to Farmer Mac, farm incomes are projected to be very strong for 2021. The farm incomes are projected to be up 17% from data collected in 2020. In addition, since 2012 the farm sector’s debt-to-asset ratio has increased. The measures of liquidity and profitability have also presented similar trends to the debt-to-asset ratio. So, what does this mean for the agricultural industry? These trends indicate a break in the usual pattern, which is amazing news! According to the USDA, farm bankruptcies are at their lowest point in over a decade! The overall farm debt is forecast to decline for the first time since 2012. This news is something to celebrate! In the past, farmers and ranchers were not able to catch a break. The indication that farm bankruptcies are at their lowest point indicates a light at the end of the tunnel.
Farm incomes and debt are not the only measures that are indicating a positive change for the agricultural industry. The value of land has increased as well! The data collected by the USDA has indicated an increase in farm real estate values. Increased land values mean increased farm profitability. This allows farmers and ranchers the ability to present themselves as stronger loan candidates. According to Farmer Mac, the interest rates for agricultural production remains at near historic lows in 2021. With interest rates remaining at a historic low, and land values increasing farm profitability, the ability for farmers and ranchers to borrow money and easily pay it back has heavily increased.
Given the data provided by Farmer Mac in their quarterly addition of, ‘The Feed’, right now is the perfect time to purchase that new property or to refinance your current property loan. Complete our online application today or give us a call at 866-929-5585 to see what option works best for you!