Cowley and Kreitman found that an increase in farm income in the fourth quarter appeared to be a major driver of recent strength in farm credit conditions. With better financial results in 2020, the capital spending plans of farm borrowers also strengthened in the fourth quarter and are expected to increase in all districts in the coming months, according to the survey.
The survey found that other financial indicators also moved rapidly in the fourth quarter, as borrowers were relieved of financial strains from previous years.
“On average across all districts, demand for loans has contracted at the fastest rate since 2013 and availability of funds has increased at the fastest rate since 2013 according to agricultural bankers,” according to Cowley and Kreitman. “The trajectory of the two indicators was consistent across all regions, but loan demand declined at the fastest rate in the Dallas District and liquidity growth was strongest in the Chicago District.”
According to the survey, farmland values and cash rents remained high in most reporting states.
“Although drought appeared to be putting some pressure on agricultural property markets in mountain states, the value of rain-fed cropland increased in all other states in the fourth quarter,” according to the results of the investigation, ”said Cowley and Kreitman.
They wrote that the gains were strongest in the High Plains and Corn Belt, where farmland values rose 8% in North Dakota and 9% in northern Indiana. Cash rents on non-irrigated cultivated land also …
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