Fed Says Some Livestock Loans Reaching All-time Highs

KANSAS CITY, MO – Though many agricultural lenders have seen a decline in operating loans over the past year, demand for livestock loans is growing and in some cases, reaching all-time highs.

According to Nathan Kauffman, vice president for the Kansas City Federal Reserve and the Bank’s principal expert on the agricultural economy, the average size of loans for some livestock categories contributed to the increased lending.

The average size of operating loans also remained elevated, a smaller number of loans limited the overall financing of operating expenses.

Generally, he says, the U.S. agricultural economy remains strong as elevated commodity prices continue to support farm incomes with prices of most major crops at multi-year highs, supporting farm revenue prospects.

“Weakness in the cattle industry persisted, however, as low cattle prices continued to limit profit margins for producers”, Kaufmann explains. “In addition, concerns about drought and higher input costs continued to intensify and likely contributed to an increase in producers’ financing needs in the livestock sector.”

The Federal Reserve Bank of Kansas City is located in Kansas City, Missouri, and covers the 10th District of the Federal Reserve, including Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and portions of western Missouri and northern New Mexico.
(SOURCE: All Ag News)