By Scout Nelson
Farm financial conditions in Nebraska continue to face challenges, as reported in the latest Kansas City Federal Reserve Bank Survey of Agricultural Credit Conditions. A significant number of Nebraska bankers noted a decline in farm incomes compared to a year ago, with the state leading the Tenth District in reduced farm earnings.
The report highlighted that about 60% of bankers observed lower farm incomes, with only 10% reporting improvements—the lowest share since 2020. Areas concentrated on crop production were most affected, further straining financial conditions in Nebraska.
Loan repayment rates slowed, problem loans increased, and loan demand rose as working capital declined. A Nebraska banker observed widespread deterioration of working capital during summer farm inspections. On average, 6% of bank loan portfolios in the district were on watch lists, with Nebraska topping the list at 8%. Meanwhile, 3% of loans were classified with defined weaknesses, slightly higher than the previous year but below 2015-2019 averages.
High cattle prices brought some relief, particularly for cow/calf operations, offering a positive impact amidst the challenges. Agricultural land values in Nebraska showed stability, with non-irrigated cropland up 5%, irrigated cropland slightly increasing by 0.3%, and ranchland values rising by 1.6%.
Despite stable land values, the reduction in crop producer profits has weakened farm balance sheets and increased demand for financing.
Economists warn that these pressures could intensify agricultural credit challenges moving forward. Nebraska continues to navigate these financial shifts, balancing challenges and opportunities within its agricultural landscape.
Photo Credit:gettyimages-d-keine
Categories: Nebraska, Rural Lifestyle, Farm Safety