St. Louis Fed: Farm Income Continues to Decline
USAgNet - 08/11/2017
According to the latest survey of agricultural bankers in the Eighth Federal Reserve District, farm income during the second quarter of 2017 declined relative to the second quarter of last year. Respondents have consistently reported lower year-over-year levels
of income since the fourth quarter of 2013. This period correlates with an extended period of declining prices for commodities.
Both survey results and comments from bankers indicate the long-term effect has had a negative impact on the financial condition of their borrowers. For the second-quarter 2017 survey, the impact of lower income shows up in lower household spending and
lower capital spending compared with the same quarter a year ago. Furthermore, a majority of respondents feel these trends will continue into the third quarter of 2017, with lower income and spending relative to the same period last year.
Values for quality farmland and levels of cash rents for farmland also declined over the past year. Going against the overall trends, a majority of bankers felt ranchland and pastureland values and rents improved relative to a year ago. However, those results are
not expected to continue, as a slight majority of bankers project ranchland and pastureland values and rents will decline next quarter.
Responses to bank-related activities indicate that loan demand increased relative to the second quarter of last year. A majority of bankers reported a lower level of availability of funds relative to last year while also reporting a declining rate of repayment on