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Ag Credit Conditions Deteriorate Steadily | Rural Radio Network

Ag Credit Conditions Deteriorate Steadily

Ag Credit Conditions Deteriorate Steadily
Image: marchello74/iStock/Thinkstock

Farm income decreased across the Tenth Federal Reserve District and the trend of steady deterioration in agricultural credit conditions continued in the first quarter of 2019 according to the Kansas City Fed’s quarterly Agricultural Credit Survey.

Reductions in farm income were sharpest in Nebraska and Missouri, states heavily concentrated in corn and soybean production. While some areas were heavily affected by spring flooding and blizzards, it may be months before the full impact to farm income is realized as immediate damage and implications for the 2019 operating cycle were being evaluated.

As farm income remained low, demand for farm loans remained high and the ability of farm borrowers to repay loans weakened at a slightly faster pace than in previous quarters. In addition, carry-over debt increased again for many borrowers and bankers continued to restructure debt and deny a modest amount of new loan requests due to cash flow shortages.

Farm real estate values in the Tenth District were relatively steady compared with a year ago despite pressure from weaknesses in the farm sector and higher interest rates. In fact, the value of nonirrigated cropland increased slightly for the first time since 2015.

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