Federal Agricultural Mortgage Corporation · NYSE:AGM
Federal Agricultural Mortgage — ABA Partners On-the-Line Webinar (May 2015)
10 slides from Federal Agricultural Mortgage's conference presentation, May 19, 2015
Slide 1: ABA Partners On-the-Line Webinar: Ag Economic Update
ABA Partners On-the-Line Webinar Ag Economic Update May 19, 2015 Today’s Speakers Jackson Takach Economist Farmer Mac Washington, DC Patrick Kerrigan Director of Business Development Farmer Mac Washington, DC
Slide 2: Agenda and Introduction
Agenda • Introduction • Overview of Projections • Recent Commodity Trends • Interest Rates • Impacts on Land Values • Current Credit Conditions • Opportunities with Farmer Mac • Questions Introduction • Farmer Mac – ABA Alliance – Created in November 2005 – Goal to increase awareness of the competit
Slide 3: ABA Banks Partner with Farmer Mac; USDA 2015/16 Projections
ABA Banks Partner with Farmer Mac to: Preserve existing Attract new Grow with your producer customers larger producers relationships Generate fee Diversify Improve capital income portfolio risk position Increase Offer cross sell competitive fixed opportunities rate products USDA 2015/16 Projections
Slide 4: USDA Sources of Income Change; Farm Incomes and Expenses
USDA Sources of Income Change $108.0 -$15.6 -$8.2 $0.7 $1.6 $73.6 -$10.1 -$0.2 -$2.5 $34.4 Billion Dollar Decline from 2014 to 2015 Net farm Crop receipts Change in Livestock Change in Production Government All other Net farm income crop receipts livestock expenses payments changes income 2014F inve
Slide 5: Recent Commodity Trends
Regional Income Implications 9 Recent Commodity Trends • Corn – Lower production than 2014 – Yields depend heavily on weather in July – Lower prices are starting to spur demand • Soybeans – Lower yields expected in 2015 (return to historical) – Stocks to remain high on global production • Beef – Hig
Slide 6: Planting Progress and Avian Influenza
Planting Progress Percent Planted Corn Major Catchup Soybeans Cotton Still Slightly Behind Sorghum 0 5 10 15 20 25 30 35 40 Historical Average This Week Last Week Last Year Avian Influenza • Over 33 million birds affected (less than 1% of birds slaughtered each year) • 40% of Iowa’s egg-laying hens
Slide 7: Interest Rates and Land Values
Interest Rates • Recent sell-off in treasuries, rates rise • Many think Fed is almost ready to normalize – Futures positions imply 56% think 25 bps rate hike in June – By January 2016, only 7% think there is no rate increase 9.00% 8.00% 7.00% 6.00% 5.00% FAMC 15-Year Fixed 4.00% 3.00% 4/28/2008 4/28
Slide 8: Credit Conditions; Farm & Ranch Loan Purchases
Credit Conditions • Still strong demand – Need for operating lines – Need for refinance and liquidity • 2014 financials are weaker – Still quite good – Not affecting approval rates Farm & Ranch Loan Purchases 2014 Loan Purchase Volume 165 Sellers sold 903 loans for a total balance of $707,000,000 an
Slide 9: Active Sellers; Farm & Ranch Popular Products
Active Farm & Ranch and FM2 Sellers Farm & Ranch Popular Products 5/19/2015 ABA Reset Choice Product Term Amort. Choice Margin Rate Rate Ag Equity LIBOR 20/25/30 varies 1.80% 1.99% - 1-Mo ARM LIBOR 15 15/25 1.50% 1.78% - 5-Yr ARM 15 15/25 2.30% 3.27% - 7/1 ARM 15 15/25 - 3.14% 3.01% 10/1 ARM 15 15/2
Slide 10: Conclusion and Thank You
Conclusion • Farmer Mac can be a dependable partner for your institution – Offer innovative products to your producers – Increase liquidity and lending capacity – Accommodate larger loans • Institution is required to become a Farmer Mac Seller – Seller application – Purchase Farmer Mac stock • Up to
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