Farm Income Decline Slows in First Quarter But Continues to Weaken, According to Federal ReserveFri, 18 May 2018 09:42:33 CDT
Farm income and credit conditions continued to weaken in the first quarter of 2018, but at a slower pace than in previous quarters, according to the Federal Reserve Bank of Kansas City’s Survey of Agricultural Credit Conditions.
Despite moderate increases in prices of key agricultural commodities, Tenth District bankers reported that farm income and spending continued to decrease. The decline in the first quarter makes 2018 the fifth consecutive year that bankers have reported lower farm income than the year before. Reduced farm income contributed to intensifying cash-flow concerns and tightening lending standards.
Compared with declines in farm income, declines in Tenth District farmland values have remained modest. In the first quarter, values for all types of farm real estate declined by just 3 percent, on average. Cash rental rates for non-irrigated and irrigated cropland also fell by about 3 percent in the first quarter. Going forward, higher interest rates could put additional pressure on cash flows, but moderate increases in crop prices and further declines in cropland rental rates could help improve profit margins of crop producers in the seven states of the Tenth District in coming months.
The first quarter Survey of Agricultural Credit Conditions is available at http://www.kansascityfed.org/research/indicatorsdata/agcreditsurvey.
Source - Federal Reserve Bank of Kansas City, Omaha Branch
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