ILLINOIS (WCIA) – In early 2020, farmers were on the verge of agribusiness. Prices were low and the prospects for recovery bleak. But a new day has dawned for agriculture.
Farm Credit of Illinois has $ 4.3 billion in loans to 8,700 farmers and agribusinesses in the lower 66 counties of Illinois. While that’s a lot of money at risk, President and CEO Aaron Johnson says the turnaround in the Ag economy over the past year has been remarkable.
“Everything has changed since last year,” he says. “We went last summer and last fall and thought it was going to be a tough time on the farm. The margins were tight. The raw material prices were falling. The pandemic was underway and we didn’t know what impact that would have and trade problems.
“When we got into the fall, the prices of corn and soybeans went up and the trade problems left us, and the export business started to develop very positively. Everything has changed. We went into the winter and our members were about as financially strong as they have been since 2014. Default rates have fallen sharply and farmers were in a very good financial position until 2021.
“Now in 2021, interest rates are still low and raw material prices have held up. They are a little volatile now, up and down, but they are still very strong. So we’re looking forward to a good year 2021. We assume that input costs will continue to rise, will probably eat up our margin a bit in winter and then move into 2022. But right now in central and southern Illinois, it’s a good time to be in agriculture. “
Aaron Johnson says Farm Credit is watching closely what the Fed will say this afternoon about the inflationary potential and its timetable for addressing this issue.