Surveyed bankers indicated farm machinery and grain storage construction loan volumes were anticipated to increase, while the volume for operating loans was anticipated to be flat.
The value of farmland is an important economic indicator for the agricultural business because it represents most farmers’ highest valued asset. Steady or rising farmland values along with low interest rates have been positive trends for farmers, particularly in light of lower commodity prices in the past several years. Stable farmland prices have remained the one positive during these years of major challenges for U.S. farmers.
Bankers responding to the third-quarter agricultural conditions survey reported overall weaker conditions across most regions of the Eleventh District, which includes Texas, 26 parishes in northern Louisiana and 18 counties in southern New Mexico.
Despite years of persistently low commodity prices and the COVID-19 pandemic, the mood of some Ninth District agricultural bankers is surprisingly upbeat, according to a recent Federal Reserve Bank of Minneapolis survey.
In its August 2020 Ag Letter, the Chicago Federal Reserve Bank of Chicago reported that repayment rates for non-real estate loans in the second quarter were down vs. the same period of 2019.
Agricultural credit conditions in the Kansas City Fed’s Tenth District and the Chicago Fed’s Seventh District slipped in the first quarter of 2020, impacted by the effects of the COVID-19 pandemic. As commodity prices drop, so has farm income, loan repayment rates and loan interest rates. At the same, farmland values have increased slightly or remained flat during the pandemic.
According to a report from Farmers National Company, following the COVID-19 outbreak, the land market hit the pause button as buyers and sellers slowed activity. Opposing factors will be pushing and pulling land values in the coming months to decide what’s next for the land market.
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The announcement of a partnership between New Holland and Bluewhite was one of the big precision stories of the summer. West Coast New Holland dealers now have the rights to sell, distribute and service Bluewhite’s aftermarket autonomy kits.