U.S. inflation fight darkens economic outlook, ag lender says
The Federal Reserve will continue to raise interest rates into 2023, "and the outlook for the coming year grows increasingly gloomy," said agricultural lender CoBank on Monday. The strong dollar "will pressure U.S. exports as the global economy struggles and U.S. goods remain expensive," it said, with warfare in Ukraine injecting additional volatility into world food supplies.
Cropland values soar by 15 percent in Midwest and Plains
High commodity prices and low interest rates fueled a sharp 15 percent increase in the value of cropland in the Midwest and Plains in the third quarter, according to surveys of ag bankers by four regional Federal Reserve banks. "Alongside prospects for further strength in commodity markets, the outlook for farm finances and agricultural land values through the end of 2021 remained strong," said a summary of the surveys.
Flush times for farmers, buoyed by strong markets and pandemic aid
Farmers in the Midwest and Plains are reaping a cash bonanza that has dramatically improved their finances a year after the pandemic pummeled commodity markets and prompted a record $46 billion in federal payments to agriculture, said three regional Federal Reserve banks on Thursday. (No paywall)
Strongest farm outlook in years, say ag bankers
Farm income and land values surged in the closing months of 2020, lifted by higher commodity prices and large federal payments, according to farm lenders across the Midwest and Plains. With the commodity rally expected to persist, the farm economy was in its best shape in years, said the …
Farmland values rise in Midwest and Plains
Ag bankers in the Midwest reported the largest year-over-year increase in agricultural land values, 2 percent, since 2014, said the Chicago Federal Reserve on Thursday. The Kansas City Federal Reserve said land values rose by 1 to 3 percent in the Plains, with the value of ranchland and non-irrigated cropland rising the most.
As coronavirus weakens ag sector, federal payments may be key
If 2019 was stressful for farmers and ranchers, with low commodity prices and bad weather for crops, the coronavirus crisis is compounding the economic challenges this year, said three Federal Reserve banks in recently released quarterly reports. (No paywall)
Federal support may determine farm sector outlook
Farmland prices are holding steady and agricultural banks are financially strong — potentially two key sources of support for the farm sector during the disruptions of the coronavirus pandemic — said the Federal Reserve in a report on Thursday. (No paywall)
Farmers borrow less, and tariff payments may be why
Agricultural lending declined during the second half of 2019, and while that reflected lower production costs, it “likely also was due to an increase in revenue from government payments (Market Facilitation Program) connected to trade disputes that lingered through the year,” said the Federal Reserve on Thursday.
Short on cash, some farmers will sell assets during winter
Low commodity prices and high costs are tightening the credit squeeze on the farm sector, with little expectation of improvement in the near term, according to ag bankers in the Midwest and Plains. Some farmers and ranchers will liquidate assets during the winter to stay afloat, and some highly leveraged operators will be forced out of business, they said.
Profitability of many midwestern corn, soy farms ‘will almost surely fall’
Farmland values are falling for the fifth year in the Midwest, and one factor in the decline is “muted expectations for farm income” this year, said the Chicago Federal Reserve Bank on Thursday. “The profitability of many corn and soybean farms will almost surely fall from their 2018 levels — possibly by a lot for some.”
Rise in commodity prices slows decline in farm income, say bankers
Agricultural lenders expect farm income, which weakened in the spring, to continue to decline this summer, although a recent rally in corn, soybean, and wheat prices will act as a stabilizer, said Federal Reserve banks in Kansas City, Minneapolis, and St. Louis on Thursday.
Producers borrow more, need more time to repay
Agricultural bankers are lending a markedly larger amount of money to farmers and ranchers, with loan volume up 11 percent from April, May, and June of last year, said the Federal Reserve on Thursday. It was the highest rate of growth in loan volume in the spring quarter since 2011.
The greatest ag risk, say some bankers, is an adverse trade outcome
Farm income weakened in much of the Midwest and Plains during the opening months of this year, said reports from regional Federal Reserve banks on Thursday, with ag bankers telling the St. Louis Fed that an adverse trade outcome is clearly the most significant threat to agriculture in 2019. On Friday, the Trump administration increased the tariffs on $200 billion worth of Chinese goods.
Farm economy weakens in Plains and Midwest, fall outlook grim
The slump in commodity prices that has accompanied the ongoing tit-for-tat trade war has sapped the farm economy this summer and poses financial risks going into the fall, said Federal Reserve banks in Chicago and Kansas City on Thursday.
Midwest farmland values rise for first time in three years
Although corn and soybean prices are lower than a year ago, farmland values in the Midwest are up by 1 percent compared to this point a year ago, the first year-over-year gain in three years, said the Chicago Federal Reserve Bank. But land values fell in the central Plains, according to ag bankers surveyed by the Kansas City Fed.
U.S. cropland prices stable for fourth year amid ag sector slump
Farm income plummeted with the collapse of the commodity boom in 2013 yet cropland, usually a farmer's biggest asset and the foundation of a farm's financial health, is as valuable as ever, the USDA says. Producers are making enough money to pay their mortgages, aided in part by low interest rates on the loans, while the perennial hunger among farmers, ranchers and investors to buy land is bolstering prices on the national level, although the Midwest and northern Plains feel the pain of lower commodity prices.
Regional food systems spur economic growth, Fed says
In a lengthy report, the St. Louis Federal Reserve Bank identifies regional food systems as "a promising avenue for economic growth for both rural and urban communities through the creation or enhancement of existing jobs and businesses."
Higher costs for farmers when interest rates rise
If the Federal Reserve raises interest rates, "it will mean higher costs for many producers" at a point when farm income is falling and growers are making increased use of credit, says Brent Gloy at Agricultural Economic Insights.