A summary of the Federal Reserve Bank of Dallas (covering all or portions of Texas, New Mexico and Louisiana) third-quarter 2014 ag bankers survey:
District-wide land value changes compared to previous year
• Dryland: +5.4%
• Irrigated cropland: +4.7%
• Ranchland: +5.1%
District-wide average cash rents ($/acre/year)
• Dryland: $39.10
• Irrigated cropland: $118.80
• Ranchland: $11.40
District-wide average interest rates
• Feeder cattle: 6.12%
• Other farm operating loans: 6.22%
• Intermediate-term loans: 6.00%
• Long-term farm real estate: 5.80%
• Feeder cattle: 5.69%
• Other farm operating loans: 5.75%
• Intermediate-term loans: 5.64%
• Long-term farm real estate: 5.37%
Bankers in the Federal Reserve Bank of Dallas (covering all or portions of Texas, New Mexico and Louisiana) reported additional rains this summer improved corn production over prior years in a couple of regions. Cattle sector conditions were favorable as prices remained high. However, declining commodity prices are dampening outlooks, and bankers in a few regions expect land prices to begin to decline.
Irrigated cropland values continued falling in the third quarter of 2014. Land values for dryland were mostly unchanged, while ranchland values were slightly higher.
However, farmland values for all land types were above year-ago levels. District farmland values all rose around 5% over last year. Farmland values are anticipated to continue trending up next quarter; however, a smaller share of bankers expect an increase this quarter compared with last quarter, resulting in a slightly lower index level.
Credit standards continued to tighten this quarter, although the vast majority of respondents noted no change in standards. Demand for agricultural loans picked up, marking a turning point after six years of falling demand. Loan repayment rates continued to increase, but loan renewals and extensions declined. Volumes for a majority of loan types continued to decrease. However, increases continued in volumes of non-real-estate farm loans, feeder cattle loans and operating loans.
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