Minneapolis and Chicago Feds: Agricultural Loan Repayment Rates Falling

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New releases from both the Federal Reserve Bank of Minneapolis and the Federal Reserve Bank of Chicago tell similar stories about current economic conditions in the ag sector. On balance, farmers, particularly grain producers, continue to struggle financially.  While harvests are strong, prices remain low and farm incomes are down y/y as a result. On a positive note, corn and soybean prices have shown some improvement of late and farmland prices are firming. Additionally, livestock producers appear to be faring better than their grain counterparts due to generally higher prices for those products. Nevertheless, overall low crop prices and high input costs are resulting in slower loan repayment rates and an increase in loan renewals and extensions in both Fed districts, with some ag bankers indicating that they will probably not be able to approve some renewal requests.

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