Full text of Agricultural Survey : First Quarter 1997

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STATISTICAL

F E D E R A L

R E S E R V E

RELEASE

B A N K

Agricultural Credit Conditions at
Survey Banks in the Eleventh District

Quarterly Survey of Agricultural
Credit Conditions in the
Eleventh Federal Reserve District

Demand for Loans
Fifty-four percent of responding banks
report no change in the demand for loans.
Percent
100

First Quarter 1997

Quarterly Suroey of
Agricultural Credit

The First Quarter Survey of Agricultural
Credit Conditions suggests that the agricultural
community's financial situation continues to
strengthen, with plentiful rain in many parts of
the Eleventh District helping the recovery from
last year's drought. The improvement in crop and
livestock conditions, in turn, is giving a small
boost to land values, which had been falling at
this time last year. In almost all regions, fewer
bankers report increases in loan renewals or
extensions compared with fourth-quarter 1996.
The District total for bankers reporting increases
over last year dropped to 27 percent from 40
percent last quarter, but this level is still above
average compared with that of the past 10 years.
Here are additional details from the survey:

0
1991

1992

1993

Less

1994

• Same

1995

1996

1997

• Greater

Funds Available for Additional Lending
Seventy-five percent of respondents report
no change in availability of funds for lending.
Percent
100

Conditions is compiled from
a survey of Eleventh District
agricultural bankers. This
publication is prepared by
the Federal Reserve Bank
of Dallas and is available
without charge by writing
to the Research De partment,
Federal Reserve Bank of
Dallas, P 0 . Box 655906,
Dallas, TX 75265-5906,
or by telephoning

(214) 922-5254.

For questions regarding
information in the release,
contact Sheila Dolmas,

(21 4) 922-5178.

• Fewer bankers overall report a decline in
the rate of loan repayment than in the
fourth quarter. However, 40 percent or
more of the responding bankers in the
Southern Low Plains, South Texas, East
Texas and Coastal Texas regions report a
decline in the rate.
• Forty percent or more of the responding
bankers in the East Texas, Coastal Texas,
and South Texas regions report an
increase in renewals or extensions.
• Twenty-nine percent of responding
bankers expect the volume of feeder cattle
loans made in the second quarter to be
greater than the year-earlier level.
• Fifty-six percent of responding bankers
want to increase the volume of loans to
farmers and ranchers.
• Real land values in the District continued
to rise in the first quarter, leaving dryland
values up 2 percent, irrigated values up 1
percent and ranchland values up 5 percent
from first-quarter 1996.

0
1991

1992

1993

Less

1994

• Same

1995

1996

1997

• Greater

Rate of Loan Repayment
The rate of loan repayment decreases for
28 percent of first-quarter respondents, compared
with 49 percent reporting decreases a year earlier.
Percent
100

0
1991

1992

1993

Less

1994

• Same

1995

1996

1997

• Greater

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

STATISTICAL

RELEASE

Agricultural Credit Conditions at Survey Banks in the Eleventh District
Renewals or Extensions of Loans
Fewer respondents report
increases in renewals or extensions.
Percent
100

Loan-Deposit Ratios at Survey Banks
Average actual and desired ratios

Percent
~~~~~~~~~~~~~~~-

~~~~~~~-

50
20

0
1991

1992

1993

Less

1994

• Same

1995

1996

1997

• Greater

II
II

45
Actual Ratio

40
35

Desired Ratio

1996:1

1996:2

1996:3

1996:4

1997:1

Amount of Collateral
Twenty-five percent of survey respondents
report an increase in collateral requirements.
Percent
100

DISTRIBUTION OF LOAN -DEPOSIT RATIOS
80

Banks Reporting (Percent)
60

Ratio

Less than 41%
41% to 50%
51% to 60%
61% to 70%
More than 70%

0
1991

1992

1993

Less

1994

• Same

1995

1997

37
24
20
14
5

29
24
15
22

Oct. 1

27
19
22
18
15

1997
Jan. 1
Apr. 1

34
20
23
18
6

29
27
20
14
9

INTEREST RATES-FIXED

• Greater

Total Agricultural Loans at
Eleventh District Agricultural Banks
Agricultural lending showed little
change in the fourth quarter of 1996.
Millions of dollars (seasonally adj usted)

1996

Apr. 1

1996
Jul. 1

Average Rate (Percent)
Ratio

Feeder cattle
Other farm operating
Intermediate term
Long-term farm real estate

Apr. 1

1996
Jul. 1

Oct. 1

1997
Jan. 1
Apr. 1

10.41
10.58
10.43
10.04

10.45
10.55
10.44
10.05

10.45
10.56
10.51
9.96

10.48
10.56
10.41
9.90

10.44
10.55
10.34
10.03

5,000

INTEREST RATES-VARIABLE
Average Rate (Percent)
Ratio

Feeder cattle
Other farm operating
Intermediate term
Long-term farm real estate

Apr. 1

1996
Jul. 1

Oct. 1

1997
Jan. 1
Apr. 1

10.34
10.50
10.25
10.13

10.45
10.54
10.37
10.14

10.37
10.53
10.31
10.04

10.32
10.53
10.33
10.02

10.41
10.50
10.35
10.02

STATISTICAL

RELEASE

CROPLAND-DRYLAND

Rural Real Estate Values
April 1, 1997

Region
1

Number of banks reporting land values.
Prices are dollars per acre, not adjusted for inflation.
3 Not adjusted for inflation.
n.r.-Not reported.
2

NOTE: Regional land values based on a small
number of reporting banks should be used
with caution.
All figures are preliminary.

Beventh Federal Reserve District

P ercent Changes•
in Values from
Previous Previous
Quarter
Year

DISTRICT

136

571

1.1

3.9

TEXAS
Northern High Plains
Southern High Plains
Northern Low Plains
Southern Low Plains
Cross Timbers
North Central Texas
East Texas
Central Texas
Coastal Texas
South Texas
Trans-Pecos and
Edwards Plateau

121
17
19
8
8
8
20
4
12
7
6

564
281
329
284
363
504
762
719
1,074
788
481

1.0
- 1.1
2.0
-2.6
- 2.4
3.1
- 1.1
3.9
2.8
0.1
3.9

3.5
-3.8
-1.3
-7.9
-5.1
-1.1
4.0
-1.5
21.5
2.5
8.8

501

1.3

3.1

9
6

690
231

1.3
1.2

7.3
0.5

Northern Louisiana
Southern New Mexico

CROPLAND-IRRIGATED

12
NEW

Average
Value 2
Banks'
First-Quarter 1997

MEXICO

Region

1 Northern High Plains

Southern High Plains
Northern Low Plains
Southern Low Plains
Cross Timbers
6 North Central Texas
7 East Texas

2
3
4
5

Coastal Texas
South Texas
11 Trans-Pecos and Edwards Plateau
12 Southern New Mexico
13 Northern Louisiana

Average
Value 2
Banlcs'
First-Quarter 1997

Percent Changes 3
in Values from
Previous Previous
Quarter
Year

DISTRICT

732

2.0

2.1

TEXAS
Northern High Plains
Southern High Plains
Northern Low Plains
Southern Low Plains
Cross Tunbers
North Central Texas
East Texas
Central Texas
Coastal Texas
South Texas
Trans-Pecos and
Edwards Plateau

75
16
19
4
4
4
n.r.
3
5
n.r.
5

681
585
667
374
559
636
n.r.
768
1,591
n.r.
748

0.9
0.7
2.0
- 10.5
-5.5
-6.2
n.r.
14.2
6.6
n.r.
5.4

8.0
2.9
6.8
-15.1
-9.5
-9.8
n.r.
-6.6
28.1
n.r.
16.3

932

2.8

5.2

Northern Louisiana
Southern New Mexico

8
11

906
1,175

-0.5
9.4

0.5
-21.7

RANCHLAND
Real Eleventh District Land Values
Land values increased slightly
in the first quarter of 1997.

Region

Average
Value 2
Banlcs'
First-Quarter 1997

Percent Changes3
in Values from
Previous Previous
Quarter
Year

1992 dollars per acre

DISTRICT

142

341

2.6

6.3

1,600

125
15
16
8
8
8
19
8
13
5
7

399
165
143
144
222
444
697
766
1,093
548
400

-1.0
-1.8
1.3
- 3.8
-4.9
1.2
- 2.7
1.1
5.5
-1.5
5.1

-0.7
- 9.4
3.3
-7.3
-2.5
1.3
5.4
-19.8
25.3
1.9
0.3

312

-7.0

-7.4

Northern Louisiana
Southern New Mexico

6
11

446
173

2.0
35.9

10.7
99.5

1,400
1,200
1,000
800
600

,, ...
Dryland

400
200
0

___

Ranchland

'82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97

STATISTICAL

First-Quarter
Comments

RELEASE

Region 9-Coastal Texas

If weevils are a problem this year,

some farmers w ill be out of business.
Soil moisture conditions are
outstanding. Farmers' current p roblem
is not being able to plant due to the
wet ground . This is an extreme change
from last year's drought. The 1997
crop year looks very promising.

Region 5-Cross Timbers

District banke rs were asked fo r any
additional comme nts concerning agricultural land values or credit conditions. These comments have been
edited .

Moisture conditions are good for
sp ring planting. The increase in cattle
prices is helping beef cattle and dairy
operators.

Region 11-Trans-Pecos and
Edwards Plateau

Region 8-Central Texas
Region 1-Northem High Plains
There is more talk now about cloud
seeding than crop seeding. Maybe this
weathe r w ill help our markets in the
fu ture , but right now we need some
clouds badly.

Region 2-Southern High Plains
Farmers not affected by adverse
weather last year are generally in
better shape. Where w eather was a
factor, we have some carryover debt.
High input costs and low prices are
causing economic stress to a number
of farmers in our area. However, land
is selling and prices are stable. Vendor
financing of operating lines is beginning in this area.

Adequate subsoil moisture indicates the beginning of a good hay crop
for our ranchers. It's too wet to plow.
Cattle prices are headed in the right
direction.
The area has received lots of rain;
dry weather is needed to plant crops .
Planting is 65 percent complete,
having been delayed by much-needed
rains. Rain is much more important
than planting at this time.
Recent rains have supplied moisture for grazing crops, relieving the
pressure to sell off herds before
normal market time. Market conditions
have responded with increased prices
at the scale. Herds are being rebuilt.

The improved cattle market and
excellent lamb market will really give
p roducers a boost if they hold their
livestock until the heaviest marketing
time. Range conditions are excellent
for this time of year, and the near
fu ture looks positive. The country is in
better shape than it has been at this
time of year in many, many years.
Areas of concern are in the wool and
mohair markets , which have shown
little if any activity. These need to
recover to show hope for the longterm viability of the Angora goat
segment and, to a lesser extent, the
sheep market.

Headwaters to Economic Growth
Market Solutions to Water Allocation in Texas
A Federal Reserve Bank of Dallas, San Antonio Branch Conference
Cosponsored by the Agriculture Program of the Texas A&M University System
August 22, 1997
8 a.m. - 4:30 p.m.

Headwaters to Economic Growth will focus on the potential for free markets to efficiently allocate water in Texas. Speakers will discuss
how water markets work in. other regions, how .envir?nmental demands are addressed, the challenges Texas faces in implementing free
markets for water, and the impact water allocation will have on economic growth .
Place: Hyatt Regency San Antonio Hotel, San Antonio
Fee : $95 per person on or before August 11
$125 individual registration after August 11
For more information, call Rachel Reynosa at (21 O) 978-1406.
Speakers include
Terrx Anderson: Montana State .university• Bob McTeer, Federal Reserve Bank of Dallas• Richard Howitt, University of California at
Davis• Greg Ellis, Edwards Aquifer Authority• Robert Collinge, University of Texas at San Antonio• Ronald Kaiser, Texas A&M •
Lonnie Jones, Texas A&M

Full text of Agricultural Survey : First Quarter 1997

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