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K.C. Fed ag economist sees some bright spots

corn-wymore-8-14Although the ag economy is still struggling overall, there is a piece of good news in the latest quarterly ag finance report from the Federal Reserve Bank of Kansas City.

“I think there is good news. As you look at some of the data that comes out from the lending institutions, we do see that delinquency rates and outright defaults on loans have still been relatively low,” says Nathan Kauffman, chief ag economist for the Fed’s Tenth District.

Kauffman says banks continued to see fairly strong demand for financing in the third quarter, with much of that coming from reduced cash flow. “but we still have not seen very significant problems that would lead us to think that there’s something imminent in terms of concerns.”

Bankers continue to rely more heavily on farm real estate as collateral for loans, Kauffman says. The share of collateral on loans of more than 250-thousand dollars that was comprised of farm real estate increased from 10 percent to 32 percent. That sharp increase reversed a five-year decline in the use of farm real estate as a share of total collateral on non-real estate loans.

The Tenth District consists of Nebraska, Kansas, Oklahoma, Colorado, Wyoming, the northern part of New Mexico and the western part of Missouri.

AUDIO: Nathan Kauffman

 

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