KC Fed: Large Loans for Livestock Drive Uptick in Farm Lending
USAgNet - 07/23/2018
Lending activity in the agricultural sector increased slightly in the second quarter of 2018, supported by larger loans for livestock, according to the Federal Reserve's Agricultural Finance Databook.
In the short term, higher livestock prices in the first half of the quarter likely were responsible for the increased size of livestock loans. Longer term, the size of livestock loans also has been trending higher, suggesting that consolidation has contributed to fewer,
larger farms with larger lending needs.
Increased lending on farm operations comes amid increasing risk in the agricultural sector, as expectations of large supplies and trade disputes have contributed to sharp declines in June of prices for most major agricultural commodities.