The Kansas City Federal Reserve Bank says farm lending at commercial banks fell in the third quarter of 2016 but remained elevated as lenders continued to assess the downturn in the U.S. agricultural economy. In a new report, the bank said the need for short-term financing in the farm sector remained high as profit margins remained weak. The volume of farm loans originated in the third quarter decreased about 19 percent from a year ago but remained elevated by historical standards. Consistent with recent trends, the Fed report said loans for operating expenses continued to drive the demand for new loans. So far in 2016, loans used to finance operating expenses total about 70 percent of all non-real estate farm loans and nearly 60 percent of total loan volume.
From the National Association of Farm Broadcasting news service.