Matthew H. Williams, president of Gothenburg State Bank in Gothenburg, Neb., spoke at the FDIC symposium on U.S. farmland prices today and highlighted that banks are successfully managing agricultural loan risk.
“Farmers, especially those who produce crops, are enjoying some of the best profitability they’ve seen in a generation,” Williams said. “As a result, farmers are carrying less leverage today than they did just a few years ago.”
FDIC Chairman Bair said, “ while we don't see a credit problem in agriculture at this time, the steep rise in farmland prices we have seen in recent years creates the potential for an agricultural credit problem sometime down the road.”
Williams stressed the importance of managing credit risk highlighting that “knowing our customer is fundamental…along with what risks our customer faces.”
Williams is the vice chairman of the American Bankers Association.
Read the press release.
Read Bair’s speech.