Fed Reserve banks release farm reports
February 14, 2014
The rates of increase in farm land values and farmers' expenditures are slowing, according to reports released Thursday by the Federal Reserve Bank of Chicago, the Federal Reserve Bank of St. Louis, and the Federal Reserve Bank of Kansas City.
The Chicago Fed said that in 2013, the Seventh Federal Reserve District, which encompasses Illinois, Indiana, Iowa, Michigan and Wisconsin, had an annual increase of 5 percent in "good" farmland values, yet growth in farmland values appeared to be slowing.
"In a major reversal from a year ago, farmers' capital expenditures — specifically, expenditures on land or improvements, buildings and facilities, machinery and equipment, and trucks and autos — were expected by survey respondents to be lower in the year ahead," the bank said.
"Iowa and Wisconsin were the only district states to have lower rates of loan repayment in the final quarter of 2013 compared with a year ago."
The St. Louis Fed reported that quality farmland prices in the fourth quarter were up 12.2 percent from a year earlier, but that bankers in their survey expect farm income and quality farmland values to decline over the next three months compared with year earlier levels.
Respondents also expect farm household expenditures and farm equipment expenditures in the first quarter of 2014 to be lower than a year earlier. The St. Louis Fed's territory encompasses parts of Illinois, Missouri, Indiana, Kentucky, Arkansas, Mississippi and Tennessee.
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The Kansas City Federal Reserve Bank noted in its report that "farmland markets in the Tenth District may have begun to cool."
"After several years of large increases, agricultural bankers indicated cropland value gains slowed dramatically in the fourth quarter and ranchland values declined slightly," the bank said.
With softer farm income, more bankers reported a decline in loan repayment rates and a rise in loan renewals and extensions compared with last quarter, but the banks continued to offer operating and farm land purchase loans at under 6 percent, the bank said.
The Kansas City's Fed's area includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri. F
–the Hagstrom Report