Fed Bank: Fertilizer, Fuel and Feed Costs Increased Loans In 2nd Quarter

July 18, 2011
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You can read the full report, Federal Reserve Bank’s National Trends in Farm Lending.

Here are the high points:

  • Non-real estate ag lending jumped 14 percent due to higher costs of fuel, fertilizer and feed.
  • The increased input costs also increased the short-term amount borrowed  by 36 percent.
  • Commodity prices and 1st quarter profits continue to push land values up.
  • Corn Belt land prices jumped 20 percent above a year ago.
  • Cost of borrowing fell from 5.3 percent to 4.7 percent with average loan maturity of  less than a year.
  • Farm machinery loan volume fell 36 percent compared to a year ago.
  • Farmland values have yet to peak, which is pushing cash rent negotiations higher.

 

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