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„9-11 F0/3 ultural ette_r Federal Reserve Bank of Chicalgti; November 29, 1957 1 AGRICULTURE'S NET WORTH will .shows an,in- ' !*; creasee of $11 billion or 7 per cent durin0957_,_.a'caoxding---------------to USDA's projected estimates of assets and liabilities as of January 1, 1958. The balance sheet figures represent the total assets and liabilities of all farms in the United States, valued at current market prices. The estimates for January 1, 1958, and changes from a year earlier, follow: Estimated for Per cent change from January 1, 1958 January 1, 1957 (billion dollars) Assets Physical assets: Real estate Non-real estate Financial assets Total 118.0 51.5 18.8 + 7.8 + 5.3 + 0.5 188.3 + 6.3 10.6 + 7.1 Claims • Liabilities: Real estate debt Non -real estate debt: Loans held and guaranteed by Commodity Credit Corp. Other Total liabilities Equities Total claims Number 432 Farmers' spending and saving habits differ considerably from those of urban people. A greater part of the farm than of the nonfarm income is saved; farm families make much less use of consumer credit and, as noted above, infrequently include corporate stocks and bonds among their investments. Farmers' savings are invested primarily in real estate and other agricultural assets and secondarily in time deposits at country banks and U. S. savings bonds. BANK LOANS TO MIDWEST FARMERS have increased further in recent months (see back of Letter). Loans secured by farm real estate have continued their persistent rise of recent years, except in Wisconsin. Illinois and Michigan banks showed the largest gains, nearly 5 per cent, over the past year. AGRICULTURAL LOANS AT DISTRICT MEMBER BANKS 1.2 8.1 19.9 —25.0 + 1.2 + 2.1 168.4 + 6.9 188.3 + 6.3 Of the projected 11.2 billion dollar increase in total assets, gains in farm real estate contribute 8.5 billion. Non-real estate—machinery, livestock, crops and household furnishings and equipment—contribute 2.6 billion. Financial assets remain virtually unchanged. Thus, the increase shown in proprietors' equities is mainly the result of price increases for real estate and livestock. Million Dollars i A v 300 `../‘ 200 • • %./ Short-term / (excludes real estate and CCC guaranteed) Farm Real Estate 100 The general financial and credit situation of farmers appears to be about the same or slightly better than last year, according to a recent nationwide survey made by the USDA. Most farmers have found adequate credit available. Operating costs, land prices and property taxes are up from 1956. Operators of the larger and more efficient farms were frequently reported to be doing well, in sharp contrast to the smaller and less efficient units. • Farmers' financial assets_ consist mostly of bank deposits and currency, U. S. savings bonds and the net worth of farmer-owned cooperatives. Corporate securities and the cash value of life insurance policies are of lesser importance than in other sectors of the economy. 1945 dill 1111111111111111111 111111 filial 1950 '51 '52 '53 '54 '55 '56 '57 Non-real estate loans to farmers have shown relatively small changes over the past year, except in Iowa. The 13 per cent gain at Iowa banks (24 per cent in western Iowa) reflects the greatly improved crop situation in that state and substantially larger purchases of feeder cattle. Research Department Farm real estate loans outstanding, District member banks outside Chicago Per cent change: I June 6, 1957 to October 11, 1957 TOP: BOTTOM: September 26, 1956 to October 11, 1957 • • • XII III +3.7 -2.8 Xvi +3.7 +5.4 -2.0 -6.8 June 6, 1957 September 26, 1956% to to October 11, 1957 October 11, 1957 \ Illinois Indiana Iowa Michigan Wisconsin +2.9 +1.1 +2.9 -0.3 -1.8 +4.9 +2.2 +1.9 +4.8 -4.9 SEVENTH DISTRICT +1.0 +2.1 71C;lhHr4;1 +9..4 "Short-term" farm loans outstanding, District member banks outside Chicago + 0.8 +15.8 (excludes real estate and CCC-guaranteed loans) Per cent change: XII' June 6, 1957 to October 11, 1957 TOP: BOTTOM: September 26, 1956 to October 11, 1957 XII +30.3 +23.9 +11.8 + 5.1 1 +14.5 1 +10.4 III -7.6 +5.5 IV 1.1111411 1. 111 7 +12.0 +10.2 \ VIII +10.6 + 5.9 IX 1 +6.4 -1.6 June 6, 957 September 26, 1956 to to October 1,1957 October 11, 1957 X +5.5 +1.9 XI XV ft +6.9 -0.6 xV I -0.8 -4.2 , Xvii Illinois Indiana Iowa Michigan Wisconsin + 7.4 - 0.4 +18.4 - 2.1 + 1.3 + 0.8 - 2.2 +13.4 + 5.4 - 1.3 SEVENTH DISTRICT + 7.8 + 4.6 +1.3 +2.6 2.9 -4.6
@FedFRASER