Regional Farm Sector Stress Intensifies
The Midwest farm economy in the Tenth Federal Reserve District weakenedin the first quarter of 2017, but conditions varied from east to west. The Kansas City Federal Reserve Bank’s Agriculture Credit Conditions survey reports farm income, loan repayment rates, and the value of most types of farmland all trended lower in each of the districts seven states.
However, the deterioration in the western portion of the district was more severe than the moderate weakness in the eastern portion. The district includes Colorado, Missouri, Kansas, Nebraska, New Mexico, Oklahoma and Wyoming. Since 2014, following a drop in the prices of major row crops, farm income has fallen more sharply in the Mountain States and the western portion of Nebraska, Kansas and Oklahoma.
According to the survey, the gap between the two regions widened during the first quarter of this year. Alongside persistent weakness in cattle and wheat markets, more than 80 percent of bankers indicated farm income was lower than a year ago in the western part of the district versus about 60 percent in the eastern part.