Federal Reserve Ag Credit Surveys- 2019 Fourth Quarter Farm Economy Conditions

Last week, the Federal Reserve Banks of Chicago and Kansas City released updates regarding farm income, farmland values and agricultural credit conditions from the fourth quarter of 2019.  And earlier this year, the Federal Reserve Bank of Dallas released its Agricultural Survey for the fourth quarter of 2019.  Meanwhile, a recent update posted at the Federal Reserve Bank of St. Louis, which has also historically released quarterly farm credit conditions, stated that, “The St. Louis Fed’s Agricultural Finance Monitor has been discontinued.”  Today’s update highlights core findings from the Fed reports.

2020 Farm Sector Income Forecast, February

The USDA’s Economic Research Service (ERS) indicated on Wednesday that, “Net cash farm income is forecast to decrease $10.9 billion (9.0 percent) to $109.6 billion in 2020, relative to the 2019 forecast. Net farm income, a broader measure of profits, is forecast to increase $3.1 billion (3.3 percent) from 2019 to $96.7 billion in 2020.”

Costs of Corn and Soybean Production in 2020, ISU Report

In a recent update from Iowa State University Extension (“Estimating costs of crop production vital for 2020
farm businesses”), Alejandro Plastina explained that, “Thin profit margins in corn and soybean production have become the norm over the past five years, increasing the need for proper budgeting and marketing strategies among crop producers.”

Kansas City Fed: Farm Lending Declines For a Second Consecutive Quarter

In an update last week from the Federal Reserve Bank of Kansas City (“Farm Lending Declines at End of 2019”), Nathan Kauffman stated that, “The volume of agricultural lending at commercial banks remained elevated, but declined for a second consecutive quarter. Total non-real estate farm loans decreased about 12 percent in the fourth quarter and declined over consecutive quarters for the first time since early 2017.”

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