Softening Farm Economy Leads to Easier Credit Conditions, According to 95.3 MNC Report

During the third quarter of 2023, agricultural credit conditions in the Kansas City Fed’s Tenth District improved slightly, with farm income and loan repayment rates lower than a year ago for the second consecutive quarter. The moderation was more pronounced in areas hit hardest by drought but less tempered in areas concentrated in cattle production. Despite this, agricultural real estate values remained firm.

The ag economy has softened in recent quarters alongside a moderation in commodity prices and elevated production costs. A drop in the price of many key products during the past year has likely reduced farm income, which has been impacting loan performance. However, despite high-interest costs, ag loan performance has remained solid due to ongoing support from strong finances over the past two years.

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