Tenth Federal Reserve District Ag Credit Status

COVID-19 has continued to pressure financially farmers and ranchers across the 10th Federal Reserve District. Nebraska is part of the 10th District with its office in Kansas City.

Weak market conditions early in 2020 led to declining farm income and liquidity during Q2 of 2020. 10th District farm income expectations declined at the fastest rate since 2016. Note in Chart 1 that farm income expectations for 2020 are lowest in Nebraska.

Chart 2 indicates that lenders in Nebraska expect slight improvement in borrower liquidity, current ratios. That is only because lenders do not expect the ratios will not go as low as earlier anticipated. All of the states served by the 10th District show erosion in liquidity.

            Farm loan repayment rates are expected to decline further. Drought in much of the 10th District may be behind some of the decline, Chart 6.

            Farmland values continued to rise slightly which supports the solvency of 10th District farms and ranches but most lenders expect those values to decline.

            On average, 10th District lenders expect cash rent rates to decline. But Oklahoma expects them to rise and the Mountain States, CO, WY and northern NM, to remain the same.

Pandemic Adds Pressure to Farm Finances. (n.d.). Retrieved September 2, 2020, from https://www.kansascityfed.org/research/indicatorsdata/agcreditsurvey/articles/2020/8-13-2020/pandemic-adds-pressure-to-farm-finances


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