Farm Income, Credit, Weakening

DanEconomy, Industry News Release

Farm income and credit conditions continued to weaken in the first quarter of 2018, but at a slower pace than in previous quarters.

farm incomeAccording to the Tenth District Survey of Agricultural Credit Conditions, compiled by the Kansas City Federal Reserve Bank, reduced farm income contributed to intensifying cash-flow concerns and tightening lending standards. Cash-flow shortages continued to limit the availability of working capital, and financing needs continued to rise.

The report released last week says the decline in the first quarter makes 2018 the fifth consecutive year that bankers have reported lower farm income than the year before. The report says reduced farm income also restricted cash flow and contributed to more farm loan denials than in recent years. In the first quarter, more than eight percent of farm loan requests were denied because of customer cash-flow shortages. And, despite a recent uptick in commodity prices, cash-flow shortages have reinforced concerns about liquidity in agricultural lending.

From the National Association of Farm Broadcasting News Service.