Chicago Fed says farmland values are flat while credit declines
The Chicago Fed reports farmland values declined one percent in the second quarter of 2019 with muted expectations for farm income a major factor.
Senior business economist David Oppedahl says income has been a struggle for farmers and it’s leading to deteriorating credit conditions.
“They’re not in as good position financially, and this is leading to repayment problems as well as a higher rate of loans that are being renewed and extended and not paid off fully at the end of the year.”
More than 80 percent of bankers expect farmland values to remain unchanged in the third quarter while 15 percent expect further declines.
Bankers in the district, which includes Wisconsin, Michigan, Indiana, Illinois and Iowa, reported nearly 70 percent of borrowers have been at least modestly affected by extreme weather this year.