Mike Pearson takes a look at the recently published second quarter Ag Credit Conditions Survey from the Minneapolis Federal Reserve. It paints a sobering picture across the ninth district.
Minnesota, North and South Dakota, Montana and parts of Wisconsin and Michigan are part of the district.
More than 3/4 of ag lenders report incomes fell from 2024.
Loan repayment rates also slipped, and loan renewals increased.
Bankers overwhelmingly say customers' liquidity has decreased.
Weather extremes piled onto high input costs with low corn and soybean prices have contributed to the issue and cutting further into the earnings.
Nearly half of the farmers took on more debt to get through the summer, while interest rates ticked higher.
While farm incomes fell, household spending increased suggesting families are making it, but the farm businesses are tightening the belt.
Nearly half of the lenders report drops in machinery spending, which is a sign producer are trying to preserve cash flow.
Land values and cash rents are also making turns into the farm credit story.
Non-irrigated land prices increased 3 percent, and irrigated land jumped 13 percent higher.
Ranch and pasture ground saw similar double digit price increases.
The one exception was irrigated land rent which did edge lower.
South Dakota-- the only state where land values actually decreased. Meanwhile, Wisconsin and North Dakota saw land value increases.
Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness.