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Kansas City Fed Says Farm Economy Tightens Further
USAgNet - 02/12/2016

Farmland values in the seven-state Tenth District Federal Reserve District softened in the fourth quarter of 2015 as farm income continued to weaken, according to the Federal Reserve Bank of Kansas City's quarterly Survey of Agricultural Credit Conditions.

According to survey respondents, values of nonirrigated and irrigated cropland decreased 4 percent and 2 percent, respectively, from a year ago. Growth in the value of ranchland also stalled in the fourth quarter alongside sharp declines in cattle prices that persisted to the end of the year.

Survey respondents expected farmland values to fall further in the coming months. In fact, bankers expected the value of each land type - nonirrigated cropland, irrigated cropland and ranchland - to decline again in the first quarter of 2016.

Reduced farm income likely has contributed to expectations of further declines in both farmland values and cash rents. Persistently low prices for agricultural commodities remained a primary driver of diminished farm income across District states. Bankers surveyed expected farm income to remain subdued in the coming months.

Farm credit conditions in the Tenth District also deteriorated somewhat alongside lower farm income.


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