Nate Kaufman and Ty Kleitman in last week’s article agricultural credit investigation The Kansas City Fed stated:Farm incomes and producer liquidity have cooled in recent months as commodity prices have fallen.. Nearly half of respondents in the third quarter survey reported that farm income and borrower liquidity were lower than a year ago, the highest percentage since 2020. Farm financial situation is weakening From a fairly strong level Prices of major products have fallen”
of agricultural credit investigation “Depending on industry concentration, some states had relatively poor revenue prospects. Farm income increased from a year ago in states that rely heavily on cattle production such as Oklahoma and the Mountain States. In contrast, the situation has worsened at a slower pace this year. Kansas and Nebraska There are many fields that depend on income from corn, soybeans, wheat”
Regarding Interest levelthe Kansas City Fed noted:The easing of agricultural credit conditions has coincided with a rapid rise in agricultural loan interest rates..
” lowest average rate Non-real estate and real estate farm loans offer: Approximately 400 basis points and 300 basis points increase,Each, past 2 years”
The highest average interest rates have increased as well, with many borrowers paying more than 10% interest on their agricultural debt.
of investigation Furthermore, “despite the rapid rise in interest rates and the recent slowdown in the agricultural economy; Agricultural real estate values remain strong.The value of non-irrigated farmland is approx. That’s up 5% from a year ago, and cash rents on those acres are up about 2%.
“Irrigation and ranch values have increased by about 10%.” And while cash rents for irrigated acres increased, ranch rents were lower than a year ago. ”
Recall that earlier this month the Chicago Fed suggested: Farmland value increased 5% year-on-year in the third quarter.