Farm loan repayment in the US central plains was still weaker in the third quarter than a year earlier, but the decline slowed as higher crop prices improved returns for some row-crop producers, according to the Federal Reserve Bank of Kansas City, All Ag News reports.
The bank's farm loan repayment index reached 82 in the quarter. A reading below 100 means repayment rates are weaker than a year before, but the figure was an improvement on the previous quarter.
Corn prices rose 8 percent from the second quarter and soybean prices 7.4 percent, which the bank says helped row-crop profits despite continued pressure from higher operating costs.
Diesel remained a significant burden and limited some of the benefit of the stronger prices, so farm financial stress eased to a moderate level rather than disappearing.
Lenders and producers will now watch whether the recent weakness in grain markets, with harvest under way and operating costs still high, reverses the trend in the fourth quarter.
The report was written by Tony St. James for All Ag News.
Source: All Ag News
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