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.
The July 18 Kansas City Federal Reserve Bank’s Ag Finance Databook reports that growth in the average size of farm operating loans boosted agricultural lending in the second quarter of 2019. The size of farm loans has continued to rise and loans exceeding $1 million recently have had a significant effect on the overall volume of new loan originations.
According to the recent quarterly agricultural credit conditions survey, a net 7.2% of respondents reported demand for non-real estate farm loans decreased in the third quarter relative to the same time period last year. Specifically, 18.9% of respondents reported a decrease in loan demand and 11.7% said demand had increased during the quarter. Farm machinery loans were among the types of loans that saw the biggest decreases in volume for the third quarter, with a net 16.5% of bankers reporting decreases.
Each monthly issue of Ag Equipment Intelligence is like getting one-on-one personal advice from the world's most trusted ag equipment industry experts. Advice that hasn't been watered down or distorted by outside influence, providing the latest and most insightful farm equipment analysis. AEI explores where the ag equipment industry is going — not just where it's been. No filler. No bias. No conflict of interest. You can access the PDF issue archive by clicking here.
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.