Posted May 1, 2014
Farmers are borrowing in larger amounts during the first quarter of 2014 for inputs at spring planting, according to an article by Farm Futures available here. KTIC also reported on the story here.
Economist Maria Akers and Omaha, NE Fed branch executive Nathan Kauffman found that the trend for the “beginning of 2014 has lent itself toward not only more farm loans overall, but more loans to cover higher crop input costs and to purchase more expensive feeder livestock.”
Farm capital spending slowed and the volume of farm machinery and equipment loans fell by “almost a third compared with the previous year, marking the fifth straight quarter of decline.”
“Capital spending may have declined because operators recently upgraded equipment in high income years when tax depreciation rules were more favorable. Additionally, the prospect of lower farm income in 2014 may have shifted financing from intermediate term equipment loans to short-term operating needs,” said Akers and Kauffman.
Agricultural banks are also reporting strong repayment rates and a stabilization of the return on assets.
The Ag Finance Databook is available here.
For more information on agricultural finance and credit, please visit the National Agricultural Law Center’s website here.
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