Kansas City, MO (Radio Iowa) — A new report from the Federal Reserve Bank of Kansas City shows slight improvements in the economy of the Midwestern farm sector. Nathan Kauffman, an executive with the Fed’s Omaha Branch, says lower farm incomes and weaker credit conditions continue in Iowa and neighboring states, but he says the second quarter was not quite as negative as it has been the past couple of years.
Kauffman says many lenders were caught off guard a few years ago with the decline in commodity prices, but he says it seems like they have adjusted.
During the second quarter, more bankers reported denying new farm loan requests compared to the previous two years. Kauffman says credit conditions are weaker compared to several years ago.
Producers are not being helped by the fact that interest rates on variable rate operating loans increased to nearly six-percent in the second quarter, the highest in five years. Kauffman says conditions are stabilizing, but commodity prices are still lower than five or six years ago.
