Agricultural News
Ag Survey Reports Crop Prices Tumble on Rebound in U.S. Production
Fri, 15 Nov 2013 10:54:09 CST
Falling crop prices dragged Tenth District farm income lower in the third quarter, according to the Federal Reserve Bank of Kansas City's quarterly Survey of Agricultural Credit Conditions.
After last year's drought, a rebound in U.S. crop production was under way in September, leading to a sharp drop in prices. Although persistent drought in the Western Plains stressed some District crops, preliminary estimates suggested that production would be relatively strong in many growing regions. However, the rebound in production may not have been enough to overcome the decline in prices, and more District bankers reported farm income fell short of year-ago levels.
Despite lower farm income, farmland value gains did not moderate much in the quarter. Bankers indicated that demand for high-quality farmland outpaced supply as fewer farms were for sale during the growing season. Both non-irrigated and irrigated cropland values were approximately higher than a year ago while ranchland values gained 15 percent.
Shrinking incomes spurred demand for farm operating loans and cut farm capital spending. Loan repayment rates generally held steady, but bankers noted more requests for loan renewals and extensions. Interest rates on farm operating loans edged down and loan-to-value ratios for operating loans held steady.
The complete survey is available at www.KansasCityFed.org/agcrsurv/agcrmain.htm.
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