Company: AGM-PH
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000845877-25-000152
Chunk: 258

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 258
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, technology, and business infrastructure. These investments are designed to enhance capacity and efficiency in support of growth opportunities and long-term strategic objectives. By investing in infrastructure and funding platforms, Farmer Mac aims to scale more efficiently in tandem with future portfolio and earnings growth. These initiatives are expected to improve product delivery and funding efficiency, potentially generating more benefits for future growth.

Another focus of our planned infrastructure investments is a continued effort to expand our servicing capabilities and to enhance the efficiency of processes associated with loan onboarding and servicing. Farmer Mac expects to continue to leverage technology enhancements and servicing standardization efforts to drive scalability and consistency. Technology enhancements and process re-engineering are planned for 2025 to continue to incorporate all Farmer Mac loan portfolios onto our servicing platform and to provide flexibility in accessing loan portfolio information, increase standardization of data and processing, as well as streamlining operational workflows.

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Agricultural Finance Industry Outlook

Farm Incomes

Overall farm profitability has compressed in the last two years. According to the USDA, net cash farm income peaked at $210.1 billion in 2022, a record for both nominal and inflation-adjusted farm profits. The primary driver of profitability in 2022 was higher cash revenues, in contrast to 2019 and 2020, when elevated government support payments supported farm incomes. The USDA has reported that annual net cash farm income decreased 25% in 2023 but currently estimates that it rebounded 2% higher in 2024. For 2025, the USDA forecasts an additional 22% increase in net cash farm income, fueled by a $33 billion increase in government support payments (authorized, but not yet disbursed) from the American Relief Act enacted in 2024. If realized, 2025 net cash farm income would reach the third-highest inflation-adjusted level in history. Ad-hoc and supplemental government support payments are not guaranteed annually, but can help offset poor market conditions for producers.

Commodity prices may continue to see elevated volatility in 2025. A rebound in global supplies put downward pressure on annual grain crop prices for much of 2024. However, annual crop prices continued to stabilize in first quarter 2025, and even increased modestly for some crops. Prices for some tree nuts also continued to recover in first quarter 2025. Tree nut producers have reduced new plantings in recent years, which, combined with robust exports this marketing year, has provided moderate support for prices. Tree nut prices, including almonds and walnuts, had faced similar