MINNEAPOLIS, MINN. (RFD NEWS) — Farm finances weakened across the Minneapolis Federal Reserve District as higher input costs added pressure to already tight crop margins. The Minneapolis Fed says more than 75 percent of agricultural lenders reported lower farm incomes in the first quarter compared with a year earlier.
Loan demand moved higher as cash flow tightened. Forty-six percent of lenders reported increased loan demand, while nearly half said renewals or extensions increased. Almost half also reported lower loan repayment rates.
Capital spending continued to pull back. Sixty-five percent of lenders reported lower spending on equipment and buildings, showing producers remain cautious about major purchases heading into the growing season.
Land values were mixed. Non-irrigated cropland slipped slightly, irrigated cropland rose 1.4 percent, and ranchland values increased more than 3 percent, likely supported by cattle profitability. Cash rents fell across major land categories.
The outlook remains cautious, with lenders expecting lower income, weaker repayment, and higher loan demand.
