A news release on Tuesday from the American Bankers Association (ABA) stated that, "Eighty-two percent of agricultural lenders reported a decline in farm profitability in the last 12 months, according to a joint survey by the [ABA] and the Federal Agricultural Mortgage Corporation. Despite the continued decline, the survey of more than 580 agricultural lenders revealed that the agricultural loan approval rate is 84 percent."
An article on the front page of Saturday's Des Moines Register explored issues associated with corn and soybean production, prices, and farm profitability in Iowa. Meanwhile, the Federal Reserve Bank of Kansas City released a paper last week which noted that, "Lending at agricultural banks appeared to stabilize in the third quarter of 2017, but risks in the sector have remained alongside a persistently weak agricultural economy." Today's update includes highlights from these two current news items that shed additional light on the state of the Corn Belt farm economy.
On Wednesday, the Federal Reserve Board released its October 2017 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.
Earlier this week, the Federal Reserve Bank of Dallas released its Agricultural Credit Survey for the third quarter of 2017. The Fed update indicated that, "Demand for agricultural loans overall decreased for the eighth consecutive quarter. Loan renewals and extensions continued to increase."
Iowa State University (ISU) Extension Economist Alejandro Plastina penned a recent article titled, "Financial Stress in Iowa Farms: 2014-2016." Today’s update recaps some of the key findings from the ISU article.
Reuters writer Rod Nickel reported yesterday that, "On Canada’s fertile Prairies, dominated by the yellows and golds of canola and wheat, summers are too short to grow corn on a major scale. But Monsanto Co is working to develop what it hopes will be North America’s fastest-maturing corn, allowing farmers to grow more in Western Canada and other inhospitable climates, such as Ukraine...The question, amid historically high supplies and low grain prices, is whether the world really needs more corn."
An update on Friday from the Food and Agriculture Organization (FAO) of the United Nations indicated that, "After steadily declining for over a decade, global hunger is on the rise again, affecting 815 million people in 2016, or 11 percent of the global population, says a new edition of the annual United Nations report on world food security and nutrition released today. At the same time, multiple forms of malnutrition are threatening the health of millions worldwide."
Donnelle Eller reported on the front page of Friday's Des Moines Register that, "After three years of decline, Iowa farmland values bumped nearly 3 percent higher this year, but experts say it's unlikely a signal the ag downturn has turned a corner. Iowa farmland values are climbing because of limited supply of farms for sale, outweighing concerns about low corn and soybean prices that drive income from the land, experts say."
Cole Epley and Barbara Soderlin reported on the front page of the Money section in Friday's Omaha World-Herald that, "Farmers heading into harvest season have reason to believe the nation’s struggling agriculture economy won’t get much worse. Still, there is only faint hope that it will get much better anytime soon."
Last month, the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri released its latest baseline update for U.S. agricultural markets. Recall that in its March baseline report, FAPRI indicated that, "The latest analysis of national and global agricultural trends from the University of Missouri indicates continued financial pressure on United States farm sector." Today's post summarizes highlights from the August FAPRI baseline report, which noted that, "the outlook now is more nuanced."