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F E D E R A L

R E S E R V E

B

A

N

K

0

F

D A L L A S

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
Sixty percent of responding banks
report no change in loan demand.
Percent
100

80

First Quarter 2000

Quarterly Suroey of
Agricultural Credit
Conditions is compiled from

a survey of Eleventh District
agricultural bankers. This
publication is prepared by
the Fede ral Reserve Bank
of Dallas and is available

The First Quarter Survey of Agricultural Credit 40
Conditions suggests that the overall health of
borrowers has improved from this time last year. 20
Loan repayment has been strong, with only 15
percent of responding banks reporting a decline
0
in payments in the first quarter of 2000 compared 01 :'94
01 :'95
01 :'96
01 :'97
01 :'98
01:'99
01 :'00
with a year ago. This is down markedly from the
Less
• Same
• Greater
48 percent who reported a decline in payments
Funds Available for Additional Lending
in first-qua1ter 1999. Eighteen percent of bankers
Twenty percent of respondents report
reported an increased rate of loan repayment,
an increase in the availability of funds for lending.
up sharply from 4 percent in first-quarter 1999.
Percent
Solid loan repayment was complemented by a
100
reduction in requests for renewals and extensions. Nineteen percent of the bankers indicated 80
a decrease in such requests, up from 5 percent
in first-quarter 1999.
60
Here are additional details from the survey:
•
early 60 percent of responding bankers
indicated a desire to increase their loan volume
to farmers and ranchers.

witho ut charge by writing

• The average number of farm and ranch
borrowers per bank has risen 38 percent over

to the Research Departme nt,

the past five quarters .

Fede ral Reserve Bank of
Dallas, P.O. Box 655906,
Dallas, TX 75265-5906,
o r by telephoning
(21 4) 922-5254. It is
available on the web at
www.dallasfed.org.

Fo r questio ns regarding
information in the release,
contact Jo hn Thompson,
(214) 922-5191.

60

40

20

0
01:'94

01 :'95

01 :'96
Less

01:'97
•

Same

01 :'98
•

01 :'99

01 :'00

01 :'99

01 :'00

Greater

• Nonirrigated land values continued to
edge higher. Dryland and ranchland values were
Rate of Loan Repayment
up 3. 1 percent and 1.6 percent, respectively,
The rate of loan repayment increases for
from last quarter. A number of lenders (26 per18 percent of first-quarter respondents.
cent) expect farmland values to continue to rise Percent
over the next three months (up from 12 percent 100
last quarter). Respondents again noted that land
values are being bid up by increased demand
ao
for land for nonagricultural use. Since this survey tracks agricultural conditions, data reflecting 60
nonagricultural use have been omitted wherever
possible.
40
• Total agricultural lending in the Eleventh
District continued to rise in fourth-q uarter 1999,
as shown in the chart on page 2. The current
survey suggests this trend is continuing.

20

0
01 :'94

01 :'95

01 :'96
Less

01 :'97
•

Same

01 :'98
•

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
Nineteen percent of respondents report
decreases in loan renewals or extensions.
Percent
100

Loan-Deposit Ratios at Survey Banks

80

Average actual and desired ratios
60

Pe rce nt
----------------~ 65

60

40

55
20

50
0
01 :'94

01 :'95

01 :'96

Less

01:'97

•

Same

01 :'98

•

01:'99

01:'00

Greater

Amount of Collateral
Twenty-four percent of respondents report increases
in collateral requirements relative to last year.

II
II

45
Actual Ratio

40
35

Desired Ratio

1999:1

1999:2

1999:3

1999:4

2000:1

Percent
100

DISTRIBUTION OF LOAN - DEPOSIT RATIOS

80

Banks Repor ting (Percent)
60

2000
Apr. 1

1999
Ratio

Apr. 1

J ul. 1

Oct. 1

J an. 1

28
19
25
12
16

25
31
19
11
13

26
22
21
14
17

24
20
26
17
13

40

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

20

0
01 :'94

0 1:'95

0 1:'96

Less

0 1:'97

•

Same

01 :'98

•

01 :'99

01:'00

30
19
25
12
14

INTEREST RATE-FIXED

Greater

Total Agricultural Loans at
Eleventh District Banks
Agricultural lending continues to
climb in fourth quarter 1999.
Mill ions of dollars (seasonally adjusted)
5,200
5,000

Average Rate (Percent)

2000
Apr. 1

1999
Ratio

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

Apr. 1

J ul. 1

Oct. 1

J an. 1

9.91
9.99
9.75
9.18

9.99
9.98
9.82
9.28

10.16
10.19
10.10
9.50

10.39
10.46
10.13
9.59

10.56
10.61
10.51
9.86

4 ,800

INTEREST RATE-VARIABLE
4,600

Average Rate (Percent)

4,400

1999
Ratio

4,200
4,000
3 , 800-+-~~~-~~~~-~~~~~-~

'86 '87 '88 '89 '90 '91

'92 '93 '94 '95 '96 '97 '98 '99

Note: Starting in May 1998, data previously reported by NationsBank of
Texas in the Eleventh District are reported by Bank of America in the
Fifth District.

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

2000
Apr. 1

Apr. 1

Jul. 1

Oct. 1

Jan. 1

9.75
9.94
9.73
9.15

9.65
9.84
9.71
9.17

10.06
10.17
10.01
9.47

10.20
10.30
10.08
9.63

10.57
10.65
10.51
10.05

STATISTICAL RELEASE

CROPLAND-DRYLAND

Rural Real Estate Values
April 1, 2000

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 due to insufficient responses.

Average
Banks'
Value'
First Quarter 2000

Percent Changes'
in Values from
Previous Previous
Quarter
Year

DISfRICT

117

609

3.1

6. 1

TEXAS
Nor thern 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

106
12
20
6
7
8
15
4
13
6
7

608
280
327
310
417
577
905
703
1,191
757
503

3.5
- 0.9
1.3
1.3
3.3
0.0
2.4
5.1
8.5
4.5
- 0.9

6.2
-5.2
- 2.4
- 2.5
5.1
6.2
12.6
0. 1
19.6
- 2.7
8.7

8

582

4.6

4.1

6
5

660
300

- 0.7
0.7

4.3
26.0

2

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

Beventh Federal Reserve District

Northern Louisiana
Southern New Mexico

CROPLAND-IRRIGATED

12
NEW

MEX I CO

13

1 Nor thern High Plains
2 Southern High Plains
3 Nor thern Low Plains
4 Southern Low Plains
5 Cross Timbers
6 Nor th Central Texas
7 East Texas

8 Central Texas

9 Coastal Texas
10
11
12
13

South Texas
T rans-Pecos and Edwards Plateau
Southern New Mexico
Northern Louisiana

Region

Average
Banks'
Value'
First Quarter 2000

Percent Changes 3
in Values from
Previous Previous
Quarter
Year

DISfRICT

81

722

-1.5

- 7.1

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

69
11
20
6
4
3
n.r.
n.r.
7
n.r.
6

661
491
675
435
713
769
n.r.
n.r.
1,762
n.r.
810

0.0
- 5.3
2.2
1.7
6. 1
- 3.9
n.r.
n.r.
6.6
n.r.
4.5

- 5.5
-15.6
2.1
5.6
7.6
- 2.4
n.r.
n.r.
- 7.1
n.r.
18.1

8

808

-7.7

- 3.9

5
7

820
1,290

-1.0
- 8.4

0.0
-14.8

Northern Louisiana
Southern New Mexico

RANCHLAND
Region

Eleventh District Real Land Values
Dry/and and ranch/and values inch up
in the first quarter of 2000.
1992 dollars per acre
1,600
1,400
1,200
1,000
800

,. ....
~

600 - /
400
200
0

''
'

.... ........

____ ,,./
Dryl~nd

-----

Ranch land

~~~~•w • ~w~~~~~•w••m

Average
Banks'
Value'
First Quarter 2000

Percent Changes'
in Values from
Previous Previous
Quarter
Year

DISfRICT

113

412

1.6

7.5

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

100
11
16
6
6
8
15
6
9
5
7

472
173
151
185
311
529
800
768
1,013
594
548

1.5
0.2
2.1
3.8
13.6
3.3
0.7
-0.7
3.0
10.6
3.8

10.8
- 4.9
11.4
7.7
21.4
9.4
13.4
3.4
5.0
11.5
20.6

11

412

- 2.3

11.1

6
7

608
235

8.5
2.2

28.0
- 8.8

Northern Louisiana
Southern New Mexico

STATISTICAL RELEASE

First-Quarter
Comments
District bankers were asked for
any additional comments concerning
agricultural land values or credit
conditions. These comments have been
edited.

Region 2-Southern High Plains
Most 2000 farm-expense operating
loans have been made. Budgeted
income-to-expense ratios are much
tighter than expected because of the
anticipated decrease in cotton prices.
For 1999 loans and debt service, most
had to rely on Agricultural Market
Transition Act (AMTA) disaster payments. Projects for 2000 are the same.
General rains of 2 to 4 inches in
this area have improved crop prospects
for 2000. Farmers experienced more
carryover from the 1999 crop than average, and some are experiencing prob!ems getting financed because of it.
Most lenders are expecting 57 to 58
cents per pound on cotton in 2000,
making cash flow very tight. We expect
to lose 5 percent of our farm operators
this year. Delay in finalizing the final
disaster payments for 1999 has held up
approval of operating loans for some
farm operators.
Crop prices and drought conditions
have reduced land prices in the area.

Region 5-Cross Timbers

,_

al use, the prices are much higher. The
availability of water rights also signifiMost stock ponds/ tanks in this area cantly affects the purchase price.
are dry. Feed supplies are strained.
There are a few bright spots on the
Most land transactions are with outagricultural scene: cattle prices are
siders for recreational use. This is drivgood, and we've had 8 to 10 inches of
ing prices well above the production
rain since January 1. Farmland and
value.
ranchland are continually being purWe have received some light rain
chased for recreational use, driving
but still are dry, with stock tanks rangprices beyond a farmer or rancher's
ing from low to entirely dry.
financial capability.
The wheat is being grazed out.
Continued dry conditions along
Cattle prices are good, but we need rain with increased operating costs cha!for stock tanks.
lenge the survival of agricultural operators.

-

Region 6-North Central Texas
Trends in real estate prices are
upward, especially among ranchlands
that could be used as recreational property. Most of this property is being purchased by absentee landowners residing
in bigger cities (Dallas, Austin,
Houston). The general agricultural economy is currently as good as or slightly
better than it has been for the past
three years. Spring rains have made
producers optimistic about the coming
year. Commodity crop prices remain a
major concern; cattle prices are about
the only bright spot. However, innovative farmers are finding more profitable,
alternative uses for their crops and production.
There is plenty of opportunity for a
good operator to obtain financing .
No land is being purchased for farm
use, but some is being converted to
developments and single-family lots.

Region 7-East Texas

We finally got rain to help rye grass
Region 4-Southern l.Dw Plains but still need water for stock ponds.
,_
Calf prices are good, and bred cow
Moisture conditions are good at this prices are higher than a month ago.
time. We received 4.2 inches of rain in Feed pasture is being displaced by tree
planting.
one week. It will take most of the
moisture we have to work the land,
Region 8-Central Texas
chisel, incorporate chemicals and fertilizer, and bed the soil to plant. We will
All land sales are contingent on the
need additional moisture later to plant
purchaser's purpose; if this is recreationcrops.

Region 11-Trans-Pecos and
Edwards Plateau
Range conditions are still extremely
dry. Because of this, livestock production will be reduced, meaning fewer
lambs and lighter calves. Herds are
being culled heavily, and if it does not
rain more, producers will be going out
of business. We are starting to see the
conversion of large ranches into recreational properties, so land prices are
remaining strong.

Region 12-Southern New Mexico
Changes in bank philosophy, combined with area losses in chile and low
prices in other commodities, are foreing customers out of the bank. A large
number of referrals have been made to
the Farm Service Agency for disaster
funding and support for next year's
crop lines. Today's market prices and
past production will not support
today's debt. A large number of farms
are being placed on the market in
hopes of reducing debt and gaining
cash flow .