Farm income is still low in the Great Plains region, but the rate of the multi-year drop has slowed. That’s according to the First Quarter Survey of Agricultural Credit Conditions in the Tenth Federal Reserve District—an area that includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri.
“Farm income in the Tenth District continued to decline in the first quarter, but at a slightly slower pace than in recent quarters,” report Nathan Kauffman, assistant vice president and Omaha Branch Executive and Matt Clark, assistant economist.
Here are the key takeaways:
- 73% of bankers reported farm income was lower than the year before.
- The decline in the first quarter marked the fourth consecutive year that district bankers reported farm income was lower than a year earlier.
- Despite the persistent decline, the pace of softening appeared to slow in the first quarter. For example, 24% of bankers indicated farm income remained unchanged from the previous year, the largest share since the third quarter of 2015.
- Bankers expected farm income to decline further in the coming months, but also at a slower pace than in recent quarters.”
“The news seems to suggest that the farm economy, although not in great shape, is also not getting worse and may be bottoming out,” says Paul Neiffer, CPA with CliftonLarsonAllen and author of the Farm CPA blog and Top Producer column.
Cattle and wheat profitability are two of the major economic indicators for the region—both of which have seen dramatic downturns. As a result, bankers in region express concerns about the local farm economy.
“In particular, farm income remained subdued in Kansas and the Mountain States, regions with relatively more cattle and wheat production,” Kauffman and Clark report. “Although farm income continued to decline in western Missouri, bankers were slightly more optimistic in their assessment for farm income in that region, where crop yields were particularly strong last fall.”
More than 200 bankers contributed to the Federal Reserve Bank of Kansas City’s first quarter survey. Here are a handful of their takeaways of the current economic landscape for their region.
Christopher Walljasper/Farm Journal Media