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Increased Loan Demand and Higher Interest Rates May Benefit Ag Banks

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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.

Suggested Citation

  • Francisco Scott, 2022. "Increased Loan Demand and Higher Interest Rates May Benefit Ag Banks," Economic Bulletin, Federal Reserve Bank of Kansas City, issue July 13, , pages 1-4, July.
    • Handle: RePEc:fip:fedkeb:94471
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    References listed on IDEAS

    as
    1. Leon F. Hesser & G. Edward Schuh, 1962. "The Demand for Agricultural Mortgage Credit," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(5), pages 1583-1588.
    2. Charles A. Towe & Mitchell J. Morehart, 2009. "Credit Constraints: Their Existence, Determinants, and Implications for U.S. Farm and Nonfarm Sole Proprietorships," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 275-289.
    3. repec:ags:inpuer:244725 is not listed on IDEAS
    4. Hesser, Leon F. & Schuh, G. Edward, 1962. "The Demand for Agricultural Mortgage Credit," Production Economics Papers 246981, Purdue University, Department of Agricultural Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Agricultural Banks; Bank loans; Agricultural loans; Farm income;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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