Crop prices slightly increase, yet farm income drops
A report from the Kansas City Federal Reserve late last week highlighted the findings from the Tenth District Survey of Agricultural Credit Conditions where farm income in the region continued to decline.
“Farm income decreased from a year ago across all states in the region, with some variation in the pace of decline. Compared with other District states, crop conditions through October were slightly worse in Missouri and slightly better in Nebraska. Alongside production variability, income weakened at the fastest pace in Missouri, following sharp declines in 2018 (Chart 2). In addition, a steep decline in cattle prices also contributed to lower farm income across other District states.”
I think the most interesting part of the report is that Nebraska ranked the highest for percent of farm borrowers on the bank ‘watch lists’. This means with farmers having problems making their loan payments, new investment cannot be made. Now would be a good time to lower taxes on farmers to help them make their payments and keep their farms from delinquency.
“Bankers in the Kansas City Fed region expected agricultural credit conditions and farm income to continue to decline in coming months.”