Pandemic-relief aid along with mostly bountiful harvests in the Ninth District and a slight recovery in prices have painted an optimistic picture for the end of 2020, according to the Federal Reserve Bank of Minneapolis’ third-quarter (October) agricultural credit conditions survey.
Farmland values for the Seventh Federal Reserve District were up 2% in the third quarter of 2020 from a year ago, given support from lower interest rates, additional government payments and some rising agricultural prices.
Bankers responding to the third-quarter agricultural conditions survey reported overall weaker conditions across most regions of the Eleventh District, which includes Texas, 26 parishes in northern Louisiana and 18 counties in southern New Mexico.
In its August 2020 Ag Letter, the Chicago Federal Reserve Bank of Chicago reported that repayment rates for non-real estate loans in the second quarter were down vs. the same period of 2019.
Agricultural credit conditions in the Kansas City Fed’s Tenth District deteriorated at a slightly faster pace at the onset of developments related to COVID-19. The survey for the first quarter of 2020, distributed in mid-March, indicated a larger decline in farm income and loan repayment rates than in recent quarters.
“With the prices of most farm products dropping as the quarter ended, it’s not much of a surprise that key measures of [Seventh] District agricultural credit conditions deteriorated during the first quarter of 2020,” said David Oppedahl, senior business economist for the Federal Reserve Bank of Chicago in the May 2020 Ag Letter.
The Minneapolis Fed’s first quarter agricultural credit conditions survey, conducted during April, sheds some light on the early impacts of the pandemic on farmers and ranchers.
The volume of agricultural lending at commercial banks remained elevated but declined for a second consecutive quarter, according to the Federal Reserve Bank of Kansas City’s latest Ag Finance Databook report. Total non-real estate farm loans decreased about 12% in the fourth quarter and declined over consecutive quarters for the first time since early 2017.
Ag lenders in the Federal Reserve’s Ninth District remained concerned about trade and weather challenges confronting farmers but say the earlier price rally bolstered growers’ immediate outlook, says Joe Mahon, the district’s director of regional outreach, in summarizing the second quarter 2019 Agricultural Credit Conditions Survey.
Farmland values for the Seventh Federal Reserve District were down 1% in the second quarter of 2019 compared to the same period of 2018, according to the Federal Reserve Bank of Chicago’s August Ag Letter.
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In this episode of On the Record, brought to you by Associated Equipment Distributors, we take an initial look at the Dealer Business Outlook & Trends Report and what dealers are forecasting for 2025.