Farm Economy Seeks Footing according to latest Ag Credit Survey
The farm economy in the 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. Although farm income was down from a year ago, the decrease was smaller than in recent years. Farmland values also continued to weaken, but only marginally. Although agricultural credit conditions continued to weaken, bankers indicated they do not expect the deterioration to lead to a sharp rise in asset liquidation.
A prolonged downturn in the Tenth District farm economy that began several years ago persisted in the third quarter of the year. Farm income, repayment rates and farmland values declined from the previous year and were expected to decline further in the coming months. However, a larger share of bankers reported some improvement in the regions agricultural economy.
Going forward, agricultural economic conditions are still expected to remain subdued and financial stress in the farm sector may intensify further, but the sharp transition of recent years appears to be lessening.
Read the latest issue of the Agricultural Credit Survey
Story source: Federal Reserve Bank of Kansas City