RWP 22-06, July 2022; updated October 2025
This study examines the degree to which changes in non-real-estate agricultural loans at commercial banks are driven by changes in supply or demand. Our identification strategy exploits information provided by agricultural lending surveys conducted by three Federal Reserve Banks: Chicago, Kansas City, and Minneapolis. Building on recent studies of loan officer opinion surveys, we estimate the changes in agricultural loan supply and demand using an unbalanced panel of 1,028 banks across the 2002-2021 period. The survey responses provide instruments for supply and demand changes to examine fluctuations in bank-level agricultural loan volumes obtained from Federal Financial Institutions Examinations Council quarterly “call reports.” We find that changes in the volume of non-real-estate farm loans at commercial banks are principally driven by changes in excess loan demand. These findings support a careful approach for policies aimed at boosting supply of agricultural credit.
JEL classifications: E51, G21, Q14
Article Citation
Scott, Francisco, Todd H. Kuethe, Ty Kreitman, and David Oppedahl. 2022. “The Supply and Demand of Agricultural Loans.” Federal Reserve Bank of Kansas City, Research Working Paper no. 22-06, July. Available at External Linkhttps://doi.org/10.18651/RWP2022-06
The views expressed are those of the authors and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.