Farm borrowings have raced to record levels so far in 2016, as businesses invest while interest rates stay low or struggle with poor farmgate prices.
Lending from the Agricultural Mortgage Corporation (AMC) from January to June kept up with last year’s highest-ever total, which was 7% up on 2014.
British farms were borrowing a record £18.1bn at the end of July, after the fifth monthly rise running.
Overall lending has leapt 6% in the past year.
At AMC, almost half (47%) of new borrowing was to buy land, compared with 44% in 2015.
There were a smaller number of applications but for bigger amounts, said AMC senior sales and agricultural manager Simon Eales.
Borrowing for infrastructure, maybe for grain-drying and storage or dirty water-handling, was also increasing.
“Projects that increase control over when produce is marketed or create security of supply in energy or water are proving popular,” he said.
The cost of borrowing remains low, especially after the Bank of England dropped its base interest rate from 0.5% to 0.25% in August.
Just over a fifth (22%) of fresh lending from AMC was for refinancing, which could mean spreading debt over a longer term or restructuring borrowing taken out when commodity prices were much better.
This was an opportunity while rates were low, AMC added.
NFU economist Anand Dossa said it was important the base rate cut translated into lower borrowing costs for farm businesses.
But he said the pressures of the commodity price crash were still showing up in the record overall debt, which was still growing month on month.
“We are still experiencing prices well below where they were 12 months ago, whether it’s milk, pigs or cereals,” Mr Dossa said.