The Farm Credit Administration received a quarterly report on economic issues affecting U.S. agriculture and an update on the performance of the Farm Credit System.
Inflation and rising interest rates continue to be major economic issues despite a recent slowdown in inflation. Consumer reaction to inflation, higher interest rates, and the labor market will be key drivers for the economy in 2023. Input costs will be important for farmers next year. Volatility in the price of natural gas will continue to be passed on through fertilizer prices. Supply chain difficulties persist with agricultural equipment, leading to high prices and long waits for new equipment and replacement parts.
Through the first nine months of 2022, the Farm Credit System reported favorable financial results, including continued loan growth, increased earnings, and robust capital levels despite some decline in the System’s capital-to-asset ratio. Portfolios remained strong despite challenging operating conditions in certain sectors and regions.