Agricultural Survey

Quarterly comments

District bankers were asked for additional comments concerning agricultural land values and credit conditions. These comments have been edited for publication.

Timely rains have given us the first good wheat pasture season in several years. More wheat than normal is being put up as wheatlage. Wheat harvest has started up, and early reports are favorable. Cash flows are tight for 2024 with these lower commodity prices. The cattle fundamentals remain strong, but with cow salvage prices at historically high levels, there has been no aggressive rebuilding of the cow herd yet.

We have had some beneficial rain in the last few weeks. Wheat silage harvest is almost complete with good yields and fairly good prices. Summer crops are planted and looking good so far.

There have been great recent rains in most of our area. Cotton planting was delayed due to wet fields, but we should still have time to get it planted. Wheat took a hit from hail and the crop turned out as average after promises of a record crop. Cattle prices are at all-time highs.  

Recent rains have helped the corn crop, although corn yields are expected to be only average. Cotton crop needs less rain and more sun. Hay production projects to be good. Prices for all cattle classes continue at a record high. Grazing conditions are good to excellent.

Demand for cattle loans continues to be strong.

Banks are becoming noncompetitive due to the Farm Credit System (FCS), and others who do not pay income tax on their ag income have a 38 percent pricing advantage. We seem to end up with less-desirable ag customers or those who do not fit the box at the FCS. It’s a real disadvantage for community banks.

Year-over-year ag real estate values have seen modest increases but have stabilized given the increase cost of borrowing that has curbed demand. Demand for ag production loans as a whole has remained stable except for livestock production loans that have experienced an increase in demand due to the high prices in the cattle market. Crop production loans remain stable, but expectations for farm income margins are expected to be tight as inputs and borrowing costs have remained elevated as crop prices have decreasing futures values. Considering adverse pressures in crop production, credit has tightened on marginal borrowers to seek financing elsewhere or utilize government guaranteed programs. As harvest approaches for grain in our area, operators are still optimistic on farm income due to recent timely rains that should boost local yields.

Summer crops are planted, and harvest has begun on alfalfa farms, with the second cutting now in the barn. Cattle prices remain strong; however, drought conditions persist despite some spotty rains that have been received. Without a solid monsoon season this summer, it’s very likely many producers will have to further cull their herds.

Historical data

Historical data can be downloaded dating back to first quarter 2000.

• Land Values
• Cash Rents
• Farm Lending Indexes
• Loan Volume Indexes by Loan Type
• Anticipated Farmland Values and Credit Standards
• Interest Rates by Loan Type

Charts

What changes occurred in non-real-estate farm loans at your bank in the past three months compared with a year earlier?

What changes occurred in the volume of farm loans made by your bank in the past three months compared with a year earlier?

What trend in farmland values do you expect in your area in the next three months?

What change occurred in credit standards for agricultural loans at your bank in the past three months compared with a year earlier?

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