The Federal Reserve Bank’s Beige Book updated this week suggests farm financial conditions are deteriorating.
The report, published eight times a year, says the agriculture sector remained weak, while crop and cattle prices remained relatively stable.
Bankers reported modestly higher loan demand and an improvement in loan quality.
However, many Midwest districts report lower crop production and yield forecast. Lenders remain concerned as the ongoing impacts of adverse weather, weak commodity prices and trade disruptions, will continue.
However, the Kansas City Federal Reserve Bank did note that the distribution of 2019 USDA trade relief payments could provide additional short-term support to farm cash flows.
The Federal Reserve Bank of San Francisco reports lumber producers are scaling back due to lower exports, and apple growers report oversupply.
And California farmland prices are decreasing due to current trade issues.
Meanwhile, the Federal Reserve Bank of Texas reported trade issues were still very prominent on the minds of agricultural producers, but some banks reported more optimism regarding a resolution.