In a nationwide survey, farm lenders “are not as optimistic as they were in the fall of 2013,” say Kansas State University economist. Lenders expect higher interest rates in the short- and long-term, while land values would fall over the same time spans. Overall, interest rates are low at present. One lender said “favorable interest rates are still helping customers.”
The lenders said tighter cash flows were prompting more farm operators to seek loans. Grain farmers were hit harder by tighter cash flows, which generally reflected lower commodity prices, while the financial standing of livestock producers improved with lower feed prices. “Cash flows are extremely tight for 2014 although this has been offset by the large amount of liquidity built up over the past 4-5 years,” said one respondent.