A report this week by the Federal Reserve Bank of Kansas City shows the farm economy slumping into the fourth quarter of the year. The bank says the U.S. farm economy weakened further in the third quarter despite an upward revision to farm income projections by the Department of Agriculture. Following a brief rebound in crop prices in the second quarter, the bank says profit margins for crop producers deteriorated in August and September. Profit margins also remained poor in the cattle and dairy sectors.
Agricultural credit conditions have weakened further as loan repayment problems have picked up steadily. Bankers in the Midwest have expressed increasing concerns about the softening farm economy spilling over to Main Street business activity in rural areas.
Source: NAFB News Service