Ag Lending Variables and Farmland Values

“Rounding out a year characterized by lower farm incomes, uncertainties about agricultural trade and the growth of lending volumes, interest rates on agricultural loans trended higher. The mounting combination of higher leverage and rising rates could put additional pressure on some farm operations.” Today’s update looks at the Kansas City Fed update in more detail with a particular focus on agricultural lending variables and farmland values.“Non-real estate lending continued to increase in the fourth quarter, according to the National Survey of Terms of Lending to Farmers. Total non-real estate farm loans were up nearly 8 percent from a year ago.”“The increase in farm financing also continued to be driven by lending to fund current operating expenses. The volume of operating loans reached a historical high for the fourth quarter, increasing more than $10 billion, or 22 percent year overyear,” the Fed report said.