CHICAGO, Il. (RFD-TV) — Farm finances tightened across the Chicago Federal Reserve’s Seventh District in the third quarter, with ag bankers reporting higher loan delinquencies even as farmland values posted modest year-over-year gains. The Chicago Fed’s latest AgLetter, led by policy advisor David Oppedahl, found credit conditions weakening further while crop farms remained pressed by narrow margins and rising costs.
Corn and soybean prices improved slightly late in the quarter, offering limited relief to crop producers who continue to face competition from Brazil and elevated input expenses. Bankers noted that weaker cash earnings are expected this fall and winter for most crop farms and dairy operations.
Operationally, more renewals and extensions signal increasing stress, and nearly half of the surveyed bankers anticipate a rise in forced liquidations. Some lenders are advising producers to tighten expenses or sell assets to rebuild working capital.
Regionally, farmland values rose about 3 percent from a year ago and held steady from the previous quarter, supported by strong demand and some interest from outside investors.
Looking ahead, livestock operations — particularly cattle and hog producers — may see stronger earnings as beef demand keeps prices elevated.
Farm-Level Takeaway: Credit stress is building for row-crop farms despite steady land values and slight price improvements.
Tony St. James, RFD-TV Markets Specialist
As we start the new year, let’s take a look at some of the legislative items from 2023 affecting agriculture that will continue to play out in the political area for months to come.
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