The Minneapolis Federal Reserve Bank’s Second Quarter ag credit conditions survey shows that after several strong years of growth, that stalled in 2023.
Compared to earlier this year, farm incomes dropped slightly from April through June. Spending on capital equipment also dropped while farm household purchases increased. More than a third of ag bankers surveyed in the Ninth District said farm incomes decreased in the second quarter of this year compared to 2022. Thirty-nine percent of the lenders report that borrower liquidity had dropped in the past three months compared to last year. The Fed also says despite the falling incomes, lenders haven’t seen a boost in loan demand and the rate of loan repayment remained strong.
Loan renewals and extensions also remained steady. Farmland values rose, as did cash rents. The third-quarter outlook calls for further farm income declines, though the overall financial conditions are expected to stay relatively stable.