According to NAFB.com, the credit conditions in the Tenth District of the Kansas City Fed have softened due to the state of the farm economy. Despite two years of marked improvement, farm income and loan repayment rates have been lower than they were a year ago for the second consecutive quarter. This is particularly notable in areas heavily affected by drought, though less so in areas primarily concentrated in cattle production.

The agricultural real estate values in the region have remained stable despite these softening conditions and higher interest rates. The weakened agricultural economy has been caused by a decrease in commodity prices, coupled with heightened production costs. The reduction in key product prices over the past year is likely to have led to a decline in farm income in 2023. However, agricultural loan performance has remained steady due to continued support from strong finances over the past two years.