Rural finance management

Periodical

U.S. Agricultural Credit Conditions: A Softening in 2006?

The Main Street Economist (2006)

Farm credit conditions throughout the nation were healthy entering 2006, and farmland values continued to increase robustly. Surveys conducted by several Federal Reserve banks track trends in the farm economy. According to the surveys, farm borrowers were timely with their loan payments in 2005, leading to historically low delinquencies on farm loans. Requests for extensions on farm loans remained in check in most areas. A strong farm economy in recent years as well as strong demand from non-farm buyers has boosted farmland values. Notwithstanding strong farm finances in 2005, bankers have raised concerns about the outlook for 2006. Rising operating costs have dampened income expectations. Drought conditions in major agricultural regions could trim production and incomes this year. Many are wondering whether 2006 will be the year that farm credit conditions soften and land values cool.

You can also read linked documents for this article.