Deteriorating agriculture credit conditions and its ensuing stress on struggling farmers was a recurrent theme in the latest update released last week by Federal Reserve Bank of Chicago.
Using input from agricultural bankers across the Seventh Federal Reserve District, the report provides updates regarding farm income, farmland values and agricultural credit conditions from the fourth quarter of 2018.
David Oppedahl, a senior business economist at the Chicago Fed says in the February edition of the AgLetter that repayment rates on non-real-estate farm loans decreased in the Oct. through Dec. period of 2018 compared to the same period last year, and the rates of loan renewals and extensions increased.
"Even so, about the same percentage (2.4 percent) of current agricultural borrowers were not likely to qualify for operating credit at the survey respondents' banks in this year as in 2018."
Average interest rates on farm operating loans and farm real estate loans increased by the end of 2018 to levels not seen since 2010 and 2011, Oppedahl wrote.
Read more in the Wisconsin State Farmer.