Third-quarter crop prices and farm income fell in the Federal Reserve district that includes Nebraska, while land values remained high, according to the Federal Reserve Bank of Kansas City’s Survey of Agricultural Credit Conditions released Friday.
The Kansas City Fed said prices for Tenth District farm goods have seen a “sharp drop in prices” after production rebounded from last year’s drought.
“However, the rebound in production may not have been enough to overcome the decline in prices, and more District bankers reported farm income fell short of year-ago levels,” the central bank branch said.
Despite the lower farm income, farmland value gains did not moderate much in the quarter. Bankers, the Fed said, indicated demand for high-quality farmland outpaced supply as fewer farms were for sale during the growing season.
Both nonirrigated and irrigated cropland values were higher than a year ago while ranchland values gained 15 percent.
In other findings:
>> Shrinking incomes spurred demand for farm operating loans and cut farm capital spending.
>> Loan repayment rates generally held steady, but bankers noted more requests for loan renewals and extensions.
>> Interest rates on farm operating loans edged down and loan-to-value ratios for operating loans held steady.