The Farm Credit Administration recently received a quarterly update on economic issues affecting agriculture as well as an update on the performance of the Farm Credit System through 2022. Inflation continues to be a core economic issue despite recent declines.
Inflation has been driven, in part, by a tight labor market and rising production costs and consumer demand. The report also says strong prices for many commodities have continued into 2023. Tight global grain stocks, declining cattle inventory, and disruptions to specialty crop production continued to support prices. Input costs will remain high this year and curb farm profitability. With the end of the three-year La Niña pattern, drought conditions have improved across many parts of the country.
The update also says the System reported strong financial results in 2022, including strong loan growth and higher earnings. The System’s loan portfolio continued to perform well, and portfolio credit quality remained strong.