News

Ag lenders report further declines in 7-state district

An Illinois lender says “the farm economy is preparing to shed the next layer of farmers”, those who cannot sustain “the current debt load and family living costs” or those nearing retirement age. The St. Louis Federal Reserve Bank – in its quarterly survey of ag bankers – had asked what level of interest rate would slow down farmland sales. According to the fed, that same Illinois ag banker said “overall farm profitability” would be a bigger driving force than rising interest rates.

The report shows declines in farm income and expenses in the fourth quarter of 2016. Quality farm, ranch and pasture lands also went down, along with cash rents. The survey was taken during the last two weeks of 2016.

The 34 ag lenders surveyed continued to report lower farm income levels compared to December 2015. An Arkansas lender told the Fed that cattle prices negatively affected overall income for 2016. The St. Louis district covers Illinois, Indiana, Missouri, along with Arkansas, Kentucky, Mississippi and Tennessee.