The decline in net farm income isn’t losing steam to close out the year. The Kansas City Federal Reserve’s latest report showed the decline in farm income accelerated from July to September.
The Kansas City Fed covers the western half of Missouri, Kansas, Nebraska, Oklahoma, Wyoming and Colorado. The Fed says more than half of bankers reported lower farm income, compared to a year ago in that district. Less than five percent reported higher income.
Despite interest rates on the rise, the Fed says rates on farm loans still remain well below pre-recession levels.
The Kansas City Fed also showed farmland values remain stable. Farmers National Company said it’s good quality land still bringing top dollar. However, there is more caution from land buyers across the country. So, have land values found a bottom or plateaued? It’s still too early to tell.
“Some think we’re at the bottom because of how much we’ve declined,” said Randy Dickhut, Farmers National Company. “Others think we’re at more of a plateau because we have some headwinds we’re facing.”
He said the headwinds are coming from every direction. Lower commodity prices are staying low, and interest rates are slowly inching higher.
“It’s not a large increase, and it’s not fast, but that’s going to have some effect eventually as land borrowers think about borrowing, it’s going to cost them a little more,” he said.