Federal Reserve Bank of KC Releases Agricultural Databook

Posted on Feb 04, 2015

Reduced profits in the crop sector persisted in the fourth quarter of 2014, leading to a sharp rise in farm-sector borrowing and a slight decline in cropland values.

A near-record fall harvest pushed crop prices to their lowest levels in five years, eroding profit margins and prompting a rise in loan volumes to finance short-term operating expenses.

Farmland markets also cooled amid prospects of lower farm income, particularly in heavy crop-production areas. Should low crop prices and high input costs persist, crop sector profit margins may weaken further and strain loan repayment capacity in the coming year.

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