Source: Federal Reserve Bank of Kansas City

Agricultural credit conditions in the Tenth District moderated in the second quarter and farmland values continued to increase. Following multiple years of considerable improvement, farm income softened, and borrower liquidity retracted somewhat alongside continued cost pressures and lower prices for most agricultural commodities compared to a year ago.

Despite some moderation, the District’s farm economy was steady in the second quarter. Drought early in the quarter followed by heavy rains later contributed to difficulty with winter wheat harvest and spring planting.

Some agricultural bankers commented that decreased grain prices, weather volatility, and stable production expenses could reduce borrower liquidity that had been very strong during renewal season.

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