Limited Ag Credit Stress, but Signs of Pressure

Ag credit stress was limited in the second quarter of 2024 but showed signs of tightening amid lower crop prices and rising input costs. Those are the findings from a survey by the Federal Reserve Bank in Kansas City. Farm income in the Tenth Federal Reserve District dropped faster than in recent quarters amid lower crop prices and increased expenses. “Despite sharp declines in farm income and capital spending, agricultural credit stress remained limited, but signs of financial pressure have appeared,” the survey said. “Lenders reported modest deterioration in farm finances, farm loan repayment rates declined at a gradual pace, and repayment problems on farms rose slightly.” The Fed says about 60 percent of farm lenders reported income was lower than last year. Stronger cattle prices weren’t enough to offset low crop prices. Income was down across the country but states that rely on crop production saw the steepest income declines.