Farm Loan Delinquencies Continue Higher

by David A. Widmar

As farm incomes decline and financial conditions erode, concerns about farmers’ ability to repay farm debts mount. The Kansas City Federal Reserve Bank provides great insight into the health of the farm economy – and specifically farm loans- through its Ag Finance Databook. This post considers the latest farm loan delinquency data and evaluates conditions at the end of 2016. Continue reading

Ahead of the Fed — Farm Level Interest Rates

By Brent Gloy

At the end of 2015 many expected that the Federal Reserve might raise interest rates several times in 2016.  This was not an unreasonable guess as the December 2015 economic projections of the members of the FOMC suggested that most thought increases in the targeted Federal Funds were likely.

As it turned out, there were no additional increases in the target through November, setting up the December meeting as the last likely opportunity for a 2016 increase.  While we discussed the potential for farm level impacts of an increase back in 2015, we thought now would be a good time to take another look at farm level interest rates and begin to think through some of the implications of a potential interest rate increase. Continue reading

Credit Concerns?

by Brent Gloy

From sticky input prices to falling commodity output prices, U.S. farmers are working their way through some of the most difficult financial times in recent memory.  Purdue’s Ag Economy Barometer showed that after a slight July uptick, producer sentiment has turned decidedly lower. As we noted in a previous post this summer banker attitudes about agricultural credit conditions were turning as negative as they had been in some time.   We thought that now would be a good time look at credit conditions.  Continue reading