Source: Federal Reserve Bank of Kansas City news release
The farm economy in the seven states of the Tenth Federal Reserve District continued to show signs of stabilizing in the third quarter of 2017, even as financial stress continued to build and income continued to decline, according to the Kansas City Fed's quarterly Survey of Agricultural Credit Conditions.
Farm income was down from a year ago, but the decrease was smaller than in recent years. Banker expectations of future declines in farm income moderated throughout the District in the third quarter.
Farmland values also continued to weaken, but only marginally. The value of nonirrigated and irrigated cropland declined 3 percent and 6 percent, respectively, from the previous year. Although the magnitudes of recent declines have yet to approach the magnitudes of the 1980s, the duration of the recent downturn in cropland values has approached that of the 1980s.
Agricultural credit conditions tightened alongside lower farm income and farmland values. Farm loan repayment rates declined for the 16th consecutive quarter, indicative of the prolonged downturn in the District's farm economy. Although lenders continued to report increasing financial strain among their agricultural borrowers, bankers indicated that a sharp increase in the sale of farm assets was unlikely.
Read the complete Survey of Agricultural Credit Conditions here.