• Wed. Dec 6th, 2023

Improvement in Farm Economy Prompts Relaxation of Credit Policies


Nov 20, 2023

In the third quarter of 2023, agricultural credit conditions in the Kansas City Fed’s Tenth District showed signs of softening. Lower farm income and loan repayment rates compared to the previous year marked the second consecutive quarter of decline. This moderation was more evident in areas heavily affected by drought, while areas more focused on cattle production experienced a more tempered effect. Despite this, agricultural real estate values in the region remained stable.

The ag economy has been affected by a softening trend in recent quarters, which coincided with a moderation in commodity prices. The combination of elevated production costs and a decrease in the price of key products over the past year is likely to have contributed to a reduction in farm income in 2023. However, despite the softening incomes and higher interest costs, the performance of agricultural loans has remained strong due to the solid financial position cultivated over the past two years.

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