Banker Comments from the Tenth District
Attracting and maintaining large and higher quality loan customers has become increasingly competitive. – Southeast Colorado
Crops in the area look good and some operators have benefitted from good cattle prices. – Southwest Kansas
Surprisingly, we are seeing stronger land prices despite current commodity prices. – Northeast Kansas
Higher interest rates, along with increasing fuel and repair costs are key concerns for producers. – Southwest Kansas
Much of our area was hit with significant drought, which paired with the currently low commodity prices has reduced capital for most producers. – Northeast Kansas
The real estate market has been slow lately, but we anticipate some sales this fall and winter. – Northeast Kansas
Abundant rain during the growing season will provide average yields. Yields should offset the commodity price declines. – Southwest Kansas
We seemed to have a good wheat harvest, and I think a good fall crop harvest is on its way. I believe that this will get our farmers through the year. - Northwest Kansas
Devaluation of land, cattle and equipment are causing adjusted analysis of borrowing capacity and cash flow. – Central Kansas
Current grain prices make it very hard for borrowers to cash flow. Trade agreements need to be worked out with other countries to hopefully help prices rebound. – Southwest Kansas
We are on the border line between drought and severe drought. Most farm customers will produce 60 to 80% of normal and will have income deficiencies. – Western Missouri
Yields on corn will be extremely variable due to lack of rain. Soybean yields should hold up with timely late rains but yields will not be record breakers. – Western Missouri
We expect farm operations to lose money in 2018 with many facing the need to restore working capital by refinancing land or possibly selling assets in spring of 2019. – Southeast Nebraska
Low commodity prices are going to negatively affect land values and rental rates. – Northeast Nebraska
It is going to be a tough renewal season. We have heard of a lot of land that is going to be pushed on the market this winter to shore up debt or liquidity positions. – Eastern Nebraska
There have been very few land sales in this area during the past three months with little change in values. – Southwest Nebraska
With current commodity prices, nobody is buying land. – Central Nebraska
Predictions of large 2018 corn supply and the current trade war is adversely affecting the agriculture sector in our area. – Western Nebraska
Deteriorating working capital and overall equity erosion of ag customers is starting to have a significant impact on producers and lenders. – Western Nebraska
A total of 176 banks responded to the Third Quarter Survey of Agricultural Credit Conditions in the Tenth Federal Reserve District—an area that includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri. Please refer questions to Cortney Cowley, economist or Ty Kreitman, assistant economist, at 1-800-333-1040.
Visit the Ag Credit Survey page for more information.
The views expressed in this article are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Kansas City or the Federal Reserve System.