• Sat. Dec 9th, 2023

Agricultural Sector Drives Relaxation in Lending Standards


Nov 21, 2023

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

The ag economy has been affected by a softening trend in recent quarters, coinciding 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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