Farm income is still low in the Great Plains region, but the rate of the multi-year drop has slowed. That’s according to the First Quarter Survey of Agricultural Credit Conditions in the Tenth Federal Reserve District—an area that includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri.
“Reduced farm income contributed to intensifying cash-flow concerns and tightening lending standards,” report Cortney Cowley, economist and Ty Kreitman , assistant economist, for the District.
The first quarter of 2018 marks the fifth straight year of lower farm income and credit conditions for area farmers. To help farmers cope with this tough financial environment, bankers have restructured debt, increased or maintained collateral requirements or—in some cases—denied loans.
“Higher interest rates could put additional pressure on cash flows, but moderate increases in crop prices and further declines in cropland rental rates could help improve profit margins of crop producers in the District in coming months,” the economists report.
Nearly 200 bankers contributed to the Federal Reserve Bank of Kansas City’s first quarter survey. Here are a handful of their takeaways of the current economic landscape for their region.