Ag Lenders Report Low Interest Rates, Good Credit Availability

Kansas City Federal Reserve’s recent survey of ag bankers indicates farmland values declined 1% to 3% in the fourth quarter of 2008, Brownfield reports. But it wasn’t all bad news.

“Banks continue to tell us that they have more funds today, available for agricultural loans, than what they had last year and interest rates remain near historical lows,” Jason Henderson at the Federal Reserve’s Omaha branch said.

Henderson said collateral requirements also rose to a five-year high and more than a quarter of the bankers who responded expect credit standards to tighten further in 2009.

The banker survey was for the Tenth Federal Reserve District, which encompasses Nebraska, western Missouri, Colorado, Kansas, Oklahoma, Wyoming and northern New Mexico. The states reported non-irrigated cropland values slipped 2.8% below third quarter levels. Irrigated cropland dipped 1.1% and ranchland was down 1.7%. The largest quarterly declines were reported in Nebraska.