According to the Federal Reserve Bank of Kansas City, the volume of new operating loans at commercial banks increased over 40% from last year. This has been the fastest volume increase pace since 2017. Also, for the first time in at least 20 years, the volume is greater for loans >$1 million than loans <$1 million.
According to the Survey of Terms of Lending to Farmers, larger loans and loans originated at small or mid-sized lenders drove the increase in short-term financing for the past two quarters.
Of note, loan maturities have declined (most notable for the larger loans) whereas earlier this year maturities were on the rise.
The average interest rates on all farm loans is slightly above 8% in Q3 2024.
