News

KC Fed: signs of stabilization continue

The Kansas City Federal Reserve says the farm economy in the seven state Tenth 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.

The bank’s quarterly survey of ag credit conditions found that while farm income was down from a year ago, the decrease was smaller than in recent years.  And 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 non-irrigated and irrigated cropland declined three percent and six percent, respectively, from the previous year.

Ag credit conditions tightened alongside lower farm income and farmland values. Farm loan repayment rates declined for the sixteenth consecutive quarter, indicative of the prolonged downturn in the district’s farm economy. Although lenders continued to report increasing financial strain among their ag borrowers, bankers indicated that a sharp increase in the sale of farm assets was unlikely.

The Fed’s Kansas City district includes Nebraska, Kansas, western Missouri, Colorado, Oklahoma, New Mexico and Wyoming.