The Kansas City Federal Reserve says a slower pace of farm finance activity continued in the third quarter of 2020. Total non-real estate farm lending volume remained subdued amid continued weakness in the agriculture sector , in part thanks to developments regarding COVID-19.
The National Farmer Loan Conditions Survey shows that despite growing 15% from the previous year, the total volume of non-real estate loans in the third quarter of 2020 was below the 20-year trend for this period. Loans for operating expenses increased from last year, but were still lower than the previous three years. Loans to finance fattening livestock and agricultural machinery followed a similar trend, while the volume of loans for other animals remained stable. All other loans declined for the second year in a row, further weighing on the overall lending volume.
The number of new loans granted to farmers has also declined for almost all types of loans. The total amount of loans extended to farmers declined, reflecting a 12 percent drop in the number of farm loans.
As in the previous quarter, government payments and loan programs may have offset both declining farm incomes and the financing needs of some farm borrowers in the third quarter.
(From the National Association of Agricultural Broadcasters)