Three key factors important in future ag lending

The chief economist with Farmer Mac says soil health, resiliency and relationships will be important long-term for farmers and ranchers who want to borrow money.

Jackson Takach says lenders are starting to use on-farm data to understand how certain farm practices influence risk and then, lenders can adjust the cost of capital.

“If we can take a practice and show it reduces the volatility with a risk in a farmer’s cash flow and profitability, they’re a less risky borrower to the lender and capital can be reduced.”

Takach says relationships will also be important as the concentration in ag lending continues.

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