Source: The Federal Reserve Bank of Kansas City

Agricultural finance conditions improved with rising farm incomes at the end of 2010, according to the Federal Reserve System's Agricultural Finance Databook.

Stronger farm incomes allowed farmers to pay off debts, which trimmed loan delinquencies and lifted profits at agricultural banks.

Agricultural banks continued to outperform their banking peers as both the return on assets and equity rose for the third straight quarter, exceeding the returns at other small banks.

Farmland values surged with stronger incomes, spurring a modest rise in farm real estate loan volumes. During the past year, farmland values rose more than 10 percent in the Corn Belt and Great Plains regions, with the strongest gains for good-quality farmland. With bigger farm real estate loan volumes, total farm debt outstanding rose modestly at commercial banks.

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