Higher Prices Helping Some, Drought Conditions Pressuring Others

DALLAS, TX – While many farmers are relieved to see higher prices in nearly every commodity market, bankers in the Southwest are alarmed by the expanding drought across the region. According to the Eleventh District of the Federal Reserve in Dallas, bankers responding to the fourth-quarter survey pointed to extreme drought conditions that are stressing some operations. Some contacts noted government aid such as the Coronavirus Food Assistance Program has helped producers make their loan payments on time but demand for agricultural land in some areas is moving away from production agriculture and into investment and residential development. Demand for agricultural loans continued to decline as reflected in the loan demand index registering its 21st quarter in negative territory and falling to its lowest level since late 2011. Loan renewals or extensions have increased this quarter, while the rate of loan repayment continued to decline.
(SOURCE: All Ag News)