Federal Reserve Bank of Dallas 1Q 2015 survey

Moisture and profitability are concerns in the Federal Reserve Bank of Dallas (covering all or portions of Texas, New Mexico and Louisiana), according to a first-quarter 2015 ag bankers survey.

While some beneficial moisture arrived, more is needed. Low commodity prices are adding to profitability concerns, and while the livestock sector remains strong, high cattle prices are restraining herd replacement.

District farmland values were mixed in the quarter, with some bankers reporting increased pressure from non-ag buyers. Irrigated cropland and dryland values declined from fourth-quarter levels, but remained above year-ago levels. Ranchland values increased modestly.

Survey responses suggest bankers anticipate farmland values will decline next quarter, a reversal of a three-year trend.


District-wide land value changes compared to previous year

• Dryland: +5.5%

• Irrigated cropland: +3.8%

• Ranchland: +3.7%


Texas land value changes compared to previous year

• Dryland: +5.2%

• Irrigated cropland: +1.6%

• Ranchland: +3.0%


District-wide average interest rates compared to previous quarter

Fixed rate

• Feeder cattle: 6.09%, up .06%

• Other farm operating loans: 6.12%, down .02%

• Intermediate-term loans: 6.01%, up .05%

• Long-term farm real estate: 5.74%, down .03%


Variable rate

• Feeder cattle: 5.56%, down .09%

• Other farm operating loans: 5.66%, down .05%

• Intermediate-term loans: 5.54%, down .08%

• Long-term farm real estate: 5.26%, down .13%


Average cash rents for dryland, irrigated cropland and ranchland were all lower than the previous quarter.

The credit standards index indicated continued tightening, although the vast majority of respondents noted no change in standards.

Demand for agricultural loans picked up again, marking the third consecutive quarter of increasing demand after six years of declines. While volumes for a majority of loan types – including dairy, farm machinery and real estate – continued to decrease, operating loan volumes increased. Loan repayment rates slowed, and loan renewals and extensions were generally unchanged from the previous quarter.

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