DALLAS, TX – “This could be the best crop year we have had in several years,” exclaimed one banker in the 11th Federal Reserve District’s quarterly survey when asked about current conditions last month.
That sentiment was echoed by many others as well as respondents noted that rainfall and moisture have contributed to above-average crop yields so far this year and commodity prices have been favorable for cattle and crop producers.
This uptick in prices and optimism in rural areas has also led to an influx of new residents looking to escape the city life and providing a rare uptick in rural real estate values.
The higher commodity prices have also allowed producers to reduce their need for agricultural loans, which registered its 24th consecutive quarter in negative territory – which simply means fewer farmers and ranchers need loans.
That was confirmed by rates for loan renewals or extensions, which also fell for the third quarter in a row as rates of loan repayment continued to increase.
Though the ag-related loans overall continue to decrease, operating loans for irrigated, dryland and ranchland values increased this past quarter as input prices for fertilizer and chemicals exploded due to supply shortages and supply chain breakdowns.
According to bankers who responded in both this past quarter and the third quarter of last year, irrigated cropland and ranchland values increased year over year in Texas, southern New Mexico, and northern Louisiana.
(SOURCE: All Ag News)