Agricultural banks say loan volume for feeder livestock rose by 50 percent in the second quarter of this year after rising by 13 percent year-over-year in the first quarter, according to the Federal Reserve in its Agricultural Finance Databook. The surge in borrowing coincided with the steep increase in feeder livestock prices. “Even though high prices for feeder livestock may persist, the financial strain on feedlot operators might be lessened somewhat by improved profit margins due to lower feed costs and high prices for fed cattle and hogs,” said the Kansas City Federal Reserve Bank, which compiles the databook.
“The significant run-up in cropland prices in the past several years seems to have abated, especially in the Corn Belt…Still, downward price fluctuations were modest even in Nebraska and Iowa and most bankers surveyed expected farmland values would hold near current high levels for the near future,” said the report. Lending for purchase of cropland “appeared to ease” in the second quarter and spending on farm equipment was down.