(NewsDakota.com/NAFB) – Despite numerous headwinds in 2022, agricultural lending by U.S. farm banks increased by 8.1 percent in 2022 to $103.1 billion.

The American Bankers Association’s annual Farm Bank Performance Report says the change is due to a 9.7 percent increase in outstanding loans secured by farmland and a 5.9 percent increase in agricultural and production loans. The report also says farmland continues to provide a strong equity base for producers to tap as land values saw strong growth in 2022 after staying flat for several years. The bankers say the ag sector will face continued challenges in 2023 due to monetary policy actions targeting persistent inflation in the U.S. and continuing geopolitical uncertainty.

The report also shows farm banks are a major source of credit to America’s small farmers. Banks held more than $43.8 billion in small farm loans, including $9.3 billion in micro farm loans at the end of 2022.