Despite falling net farm incomes, rising interest expenses, and generally low producer sentiment, Agricultural Economic Insights says farm loan delinquencies improved in 2023.
Across all commercial banks, the share of farm loans classified as delinquent fell to only 0.91 percent in the fourth quarter of last year. The previous low points in farm real estate delinquency rates were from 2005 to 2007 and 2014 to 2015. It’s worth noting that loan delinquencies at those times dipped to 1.5 percent. The current dip featuring delinquency rates below one percent is uncommon. The average fourth-quarter delinquency rate has been 2.2 percent since 1991.
However, farm real estate deficiencies haven’t been meaningfully above the long-run average since 2012. Delinquency rates for farm non-real estate loans also fell in 2023, reaching 0.71 percent. While also historically low and below the long-run average of two percent, the lowest non-real estate delinquency rate was 0.59 percent in 2014.
