Despite continued deterioration in financial conditions among Plains state farmers, the value of both nonirrigated and irrigated cropland edged only slightly lower versus a year earlier. That’s the reading from the second quarter survey of agriculture bankers in the district served by the Federal Reserve Bank of Kansas City.
The bank’s update of agriculture credit conditions in its district found the value of nonirrigated cropland slipped only 1.5% versus a year earlier while the value of irrigated cropland moved 3% lower.
Despite modest declines in recent months, the bank notes the average value of nonirrigated cropland remains about 70% higher than in 2020 and more than 300% higher than in 2010.
Cattle ranchers and cattle feeders, meanwhile, continue to pocket hefty profits and sport strong financial conditions. The survey finds the value of district ranchland rose 4.2% versus a year earlier.
The Kansas City district consists of Kansas, western Missouri, Nebraska, Oklahoma and the Mountain States of Colorado, northern New Mexico and Wyoming.
Similar to recent months, cash rents on all types of land are nearly unchanged from a year ago
The bank says deterioration in ag credit conditions was most pronounced in areas more dependent on crop revenues but strong cattle prices continued to support farm finances in some parts of the region. While lenders report an increase in loan repayment problems, the majority of issues remained minor.
Loan repayment rates declined at a pace similar to recent quarters and comparable to 2017-2019; but most repayment issues remain relatively minor. On average, less than 10% of loan balances have major or severe repayment problems while about 15% have minor troubles.