Company: AGM-PH
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000845877-25-000204
Chunk: 293

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 293
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 farm incomes and the years thereafter. Revenues have declined further for some agricultural subsectors in first half 2025 than others, including annual crops. Demand for corn and soybean by-products could see a boost in the remainder of 2025 as renewable diesel and sustainable aviation fuel markets continue to mature.

U.S. trade policy continues to evolve, resulting in potential challenges and opportunities for the agricultural sector. Exports have historically been a substantial demand source for many U.S. agricultural commodities, including almonds, pistachios, and several crops and livestock products. Any extended disruption to trade could therefore potentially cause domestic inventories to increase and potentially weigh on prices. Conversely, new trade agreements could lead to an immediate boost in demand if foreign trade barriers are reduced. The U.S. is rapidly evolving its trade posture and tariff levels, which increases uncertainty of foreign demand for U.S. agricultural products. Similar to many other sectors, the agricultural industry will likely remain acutely focused on trade for the rest of 2025.

Beyond developments related to trade, changing environmental regulations and immigration laws under the federal executive administration could result in significant impacts on agricultural producers and the sector as a whole. These changes could lead to both favorable and unfavorable conditions, different labor costs and availability, and new regulatory frameworks. The agricultural sector may experience varying degrees of disruption and adaptation in response to these evolving policies, and these changes could increase the volatility of sector profitability in the near term.

Lower prices for several agricultural commodities could have multiple competing effects on loan performance and agricultural credit demand. Constraints on cash flow and additional market volatility could cause loan delinquencies to continue to rise above historical averages, most likely in commodities experiencing negative market conditions like some grain and permanent crops. Simultaneously, cash flow constraints and heightened uncertainty can increase demand for debt capital to reorganize balance sheets and replace lost incomes. Farmer Mac believes that its portfolio and market strategy is sufficiently diversified by borrower, industry, and region to maintain robust portfolio performance through the current cycle to be positioned to support any expansion of the farm mortgage market that may arise in the coming quarters.

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Land Values

Record-setting farm incomes in 2021 and 2022, combined with historically low interest rates in 2020 and 2021, drove a rapid rise in land values and a decrease in farm delinquencies and bankruptcies. Momentum for farmland values persisted throughout 2023 due to high levels of farm liquidity and a constrained supply of farmland for sale. Land values slowed in some markets in 2024