Company: AGM-PH
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000845877-25-000204
Chunk: 256

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 256
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 economy. According to data from the U.S. Energy Information Administration, sales and the revenue from the sale of electricity to customers advanced in early 2025, with an annual increase in sales of 3.1% and an increase in revenue of 6.5%, respectively, in the last 12 months through April 2025 compared to April 2024. This increase was the result of higher residential and commercial electricity sales combined with slightly higher average prices paid for electricity relative to 2024. Electricity demand has been consistently strong in the first half of 2025, and power producers are continuing to invest in additional capacity to meet the rising demand from consumers and data centers. Continued geopolitical uncertainty in the Middle East and Eastern Europe could increase energy price volatility, but power producers are generally able to pass higher input costs through to retail electricity prices, as evidenced by higher retail electricity prices in 2022, 2023, and early 2025.  Credit demand for electric cooperatives will likely be tied to ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure. These growth opportunities may be affected by the demand for electric power in rural areas, increased power demand from regional data centers, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry. Generally, these investments are expected to continue at, or above, historical levels based on the replacement and modernization of existing and new infrastructure.

Renewable Energy

Investment in renewable energy generation and deployment of energy storage technologies in the last five years deepened Farmer Mac's relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable energy net generation grew by 70% in the last five years, compared to a non-renewable electricity net generation decrease of 3%. The volatile cost of fossil fuel-based inputs combined with policy initiatives and the falling costs of renewable power generation influenced this change in generation capacity. In response to this expansion, Farmer Mac hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represented a rapidly developing market opportunity for Farmer Mac.

Recent changes to tax policy may alter the trajectory and velocity of investments in U.S. renewable energy. H.R. 1, commonly referred to as the "One Big Beautiful Bill Act," which President Trump signed into law on July 4, 2025, phases out tax credits that have been routinely used to