Growth in farm lending activity slowed in the third quarter of 2019. Following 9 consecutive quarters of year-over-year growth and a particularly notable increase a year ago, the volume of total non-real estate farm debt declined nearer to the historical third-quarter average. The primary contributor to the slowdown from sharp increases a year ago was a decline in the average size of farm operating loans. Despite a slowdown in the pace of debt accumulation, weaknesses in the sector persisted, continuing to pressure farm cash flows and agricultural credit conditions.

The most recent Beige Book (October 2019) released by the Federal Reserve System included conditions impacting agriculture throughout the country. In this edition, it noted that agricultural conditions deteriorated further due to the ongoing impacts of adverse weather, weak commodity prices and trade disruptions.

While reporting overall weaker farm conditions across much of the Eleventh District, the Federal Reserve Bank of Dallas reports that farmland values held their own in the third quarter.

Equipment and software investment growth decelerated during the second consecutive quarter and is expected to moderate at 3.9% (unchanged from the Q3 Update of the Economic Outlook published in July), according to the Q4 Update to the 2019 Equipment Leasing & Finance U.S. Economic Outlook released today by the Equipment Leasing & Finance Foundation.