News

Interest rate cut on large bank ag loans

The Federal Reserve Bank of Kansas City says larger banks (with portfolios of more than $25 Million) cut interest rates on non-real-estate loans in the third quarter, boosting farm lending. According to the Fed’s Agricultural Finance Data, national farm lending was flat and while small and medium-sized banks extended variable rates on less than half their loans, large banks, on average, cut interest rates to 3.6 percent during the third quarter.

The Fed says farm real estate loans made up the largest share of farm lending as national farmland values increased. Land prices grew more than 25 percent above last year’s levels with most states in the Corn Belt and Northern Plains reaching record high gains.

The fed says strong ag profits limited overall ag loan demand, however. Equipment and livestock loans fell below levels of a year ago.

The Fed’s Kansas City 10th District Bank serves seven states: Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.