Company: AGM-PH
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000845877-25-000152
Chunk: 202

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 202
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 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 pressure in recent years from rising production. However, production was relatively stable in 2024, helping limit and even partially alleviate the buildup in inventories. Within the livestock and animal protein sector, producers benefited from lower feed costs and robust export demand in first quarter 2025, particularly the cattle sector. Overall farm expenses remained somewhat stable in first quarter 2025, with lower expected feed, fertilizer, interest, and fuel costs partially offset by higher expected livestock, labor, and rental rates. Demand for corn and soybean by-products could see a boost in 2025 as renewable diesel and sustainable aviation fuel markets continue to mature.

The change in U.S. political leadership has induced uncertainty into the outlook for the agricultural sector. Notably, trade policy continues to evolve, resulting in potential challenges and opportunities. 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