NASHVILLE, Tenn. (RFD News) — Farm credit conditions across the central Plains continued to weaken in the second quarter, but strong cattle prices helped cushion losses for diversified operations. Federal Reserve Bank of Kansas City economist Ty Kreitman says crop-heavy farms remain under greater financial pressure than cattle-focused operations.
Lenders reported farm incomes still below year-earlier levels, although the decline slowed as corn, soybean and wheat prices improved. Cattle prices reached record highs, lifting incomes across much of the district.
Smaller farms and majority-renter operations showed greater weakness. About 45% of lenders said farms under 1,000 acres were financially weaker than larger operations, while 60% reported weaker conditions for majority renters.
Repayment stress remains manageable, with less than 10% of farm loan balances facing major or severe problems. Farmland also stayed firm, with ranchland values rising more than 7% from last year.
Looking ahead, narrow crop margins, drought, and high costs remain key risks, while strong cattle prices and government payments continue to support balance sheets.
