Agricultural loan portfolios remain healthy, despite 2 years of low farm commodity prices. Most farm lenders continue to report strong profitability and good loan quality. The spillover of lower commodity prices onto farm loan portfolios has been mitigated by a large federal safety net. Even without any further federal assistance, USDA forecasted in September 1999 that direct federal payments to farmers could hit $15.5 billion in 1999, 2nd only to the 1987 record. As long as federal transfers to farmers remain high, the effect of low commodity prices on the performance of agricultural loans will likely remain subdued.