Profit’s Down on the Farm, but Bank Risk Managers See a Bigger Picture

For lenders, a big drop in a borrower’s net income can be a credit red flag on a corporate loan. But for those banking agriculture, a potential 25% decline in net income across U.S. farms this year is just another day in the field for a sector that’s prone to dramatic shifts in fortune.   

In February, the U.S. Department of Agriculture’s Economic Research Service estimated that 2024 net farm income—a broad measure of profits—would decline by more than …