• Thu. Dec 7th, 2023

Relaxation of Credit Terms Boosts Agricultural Sector


Nov 20, 2023

In the third quarter of 2023, agricultural credit conditions in the Kansas City Fed’s Tenth District showed signs of softening. This was evident by lower farm incomes and loan repayment rates compared to the previous year, marking the second consecutive quarter of decline. While this moderation was more apparent in areas heavily affected by drought, it had a more tempered effect on areas with a focus on cattle production. Despite this softening trend, agricultural real estate values remained stable in the region.

The ag economy has been affected by a softening trend in recent quarters, which coincided 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 likely contributed to this reduction in farm income. However, despite these challenges, the performance of agricultural loans has remained strong due to the solid financial position cultivated over the past two years.

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