Full text of Agricultural Survey : First Quarter 2001

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STATISTICAL RELEASE

F E D E R A L

R E S E R V E

B A N K

D A L L A S

Agricultural Credit Conditions at
Survey Banks in the Beventh District

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

Demand for Loans
Twenty-eight percent of respondents
report increased demand for loans.
Percent
100

First Quarter 2001

The First Quarter Survey of Agricultural
Credit Conditions displayed further softening of
financial conditions in the Eleventh District agricultura l community. The percentage of bankers
reporting falling loan repayment rates from the
year earlier increased for the third straight quarter. Loan renewals and extensions continue to
rise, and collateral requirements appear to be
more rigid. On the plus side, cattle profits are
Qumterly Survey of
up, funding availability rose for the second quarAgricultural Ct·edit
ter in a row and much-welcomed precipitation
fortified the Texas aquifer, boding well for this
Conditions is compiled from
year's harvest. (See page 4 for bankers' coma suivey of Eleventh District ments.)
Here are additional details from the survey:
agricultural bankers. This
• Thirty-two percent of bankers reported a
publication is prepared by
lower loan repayment rate relative to a year ago,
the Federal Reseive Bank
more than double the 15 percent who reported
a decline during first quarter 2000. The rise sugof Dallas and is available
gests at least some weakening in loan portfolios.
without charge by writing
• Thirty-one percent reported increased
renewa
ls and extensions compared with a year
to the Research Department,
earlier, up from 17 percent in first quarter 2000.
Federal Reseive Bank of
Eighteen percent of respondents referred more
Dallas, P.O. Box 655906,
loan business to other banks than they did a
year
earlier.
Dallas, TX 75265-5906,
• Some farmers and ranchers are experior by tele phoning
encing a scarcity of collateral for loans; others
(21 4) 922-5254. It is
still have carryover debt from 2000. Stiffer collateral requirements among bankers have exaceravailable on the web at
bated the problem. Twenty-seven percent of
www.dallasfed.org.
those surveyed reported an increase in required
collateral relative to a year ago.
• Low commodity prices and high energy
For questions regarding
costs are still plaguing farmers and ranchers.
information in the release,
There is also increased reliance on crop insurance, disaster programs and other government
contact Jo hn Thompson,
payments for survival. Demand stemming from
(21 4) 922-5191.
development and recreation continues to bid up
ranchland values.

0
0 1:'95

01 :'96

01 :'97

Less

01 :'98

Same

01 :'99

•

01 :'00

01 :'01

01 :'00

01:'01

01 :'00

01 :'01

Greater

Funds Available for Additional Lending
Twenty-three percent of bankers
indicate increased funding availability.
Percent
100

0
01 :'95

01 :'96

01 :'97

01 :'98

Less

Same

01 :'99

•

Greater

Rate of Loan Repayment
Thirty-two percent of respondents signal
decreased loan repayment rates.
Percent
100

0
01 :'95

01 :'96

01 :'97

01 :'98

Less

Same

0 1:'99

•

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
Thirty-one percent of those surveyed
report increased renewals and extensions.
Percent
100

Loan-Deposit Ratios at Survey Banks

Average actual and desired ratios
60

Percent

- - - - - - - - 65
40

Ill

ill~

Less

ill~

•

Same

ill~

•

ill~

Actual Ratio

Greater

Amount of Collateral
Seventy-one percent of respondents indicate
the same amount of required collateral.

Desired Ratio

~·I

_.·I

I --i

·1 I I I

0
ill~

II II ., II

2000:1

2000:2

.I . I

2000:3

2000:4

35
2001 :1

Percent
100

DISTRIBUTION OF LOAN - DEPOSIT RATIOS

Banlcs Repor ting (P ercent)
60

Ratio
40

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

0
01 :'95

01 :'96

01 :'97

Less

01 :'98

Same

01 :'99

•

01 :'00

01 :'01

20 01

Apr. 1

200 0
Jul. 1

Oct. 1

J an. 1

Apr. 1

30
19
25
12
14

23
15
29
15
18

20
17
25
16
23

19
21
27
19
14

23
18
20
22
17

INTEREST RATE-FIXED

Greater

Total Agricultural Loans at
Eleventh District Banks
Total agricultural loans rise after
falling in the third quarter of 2000.
Millions of dollars (seasonally adjusted)
5,600

5,400

Average Rate (Percent)
2000
Ratio

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

200 1
Apr. 1

Apr. 1

Jul. 1

Oct. 1

Jan. 1

10.56
10.61
10.51
9.86

10.98
10.84
10.66
10.16

10.99
11.04
10.79
10.14

11.02
11.07
10.83
10.17

10.21
10.29
10.13
9.49

5,200
5,000

INTEREST RATE-VARIABLE

4,800

Average Rate (Per cent)
4,600

4,400
4,200
4,000

3,800 +--,--r--,----.-.---..--.....---,--y--,----,-.---..--.....---,
'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00

Note: Some of the volatility observed in agricultural loan levels is due
to the acquisition of several Eleventh District banks by banks
head uartered in other Reserve Districts.

2000
Ratio

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

20 01
Apr. 1

Apr. 1

Jul. 1

Oct. 1

J an. 1

10.59
10.67
10.53
10.07

11.09
11.13
11.00
10.56

11.05
11.20
10.93
10.38

10.87
11.04
10.78
10.34

9.99
10.17
9.92
9.23

STATISTICAL RELEASE

CROPLAND-DRY LAND

1111'11 Real Estate Vllues
April 1, 2001

Region

' 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
Value'
Banks'
First Quarter 2001

Percent Changes'
in Values from
Previous Previous
Quarter
Year

DISfRICT

107

609

1.7

0.4

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

100
15
15
11
8
5
12
3
11
7
4

610
274
328
324
402
581
949
661
1,091
804
524

1.7
-0.3
0.1
2.0
1.8
2.6
0.2
2.3
2.1
1.5
0.7

0.9
-9.0
0.6
4.2
-2.3
-0.3
3.4
1.9
-7.4
7.1
3.7

679

10.9

17.7

4
3

631
252

2.2
0.0

-4.2
-15.5

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

MEXICO

Region

1
2
3
4
5
6
7

Northern High Plains
Southern High Plains
Northern Low Plains
Southern Low Plains
Cross Timbers
North Central Texas
EastTexas

10
11
12
13

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

Average
Value'
Banks'
First Quarter 2001

Percent Changes'
in Values from
Previous Previous
Quarter
Year

DISfRICT

755

1.3

2.4

67
14
14
9
5
n.r.
n.r.
n.r.
6
4
4

716
591
657
490
638
n.r.
n.r.
n.r.
1,741
879
739

1.0
-1.5
0.3
0.1
0.8
n.r.
n.r.
n.r.
-0.6
3.5
-1.1

5.1
10.1
-2.0
9.9
-8.1
n.r.
n.r.
n.r.
-1.1
6.6
-9.0

1,054

13.4

34.1

Northern Louisiana
Southern New Mexico

4
4

817
1,114

-1.1
4.4

-1.3
-11.4

RANCH LAND

Region

Eleventh District Real Land Values
Land values for irrigated, dry/and
and ranch/and all increased.
1,600
1,400
1,200
1,000
800

.....
600
400
200
0

' ' ........ ....

..........

Dryland

,.,.. ....

Ranch land

-~-~~w••w~••~~•w•~m~

Percent Changes'
in Values from
Previous Previous
Quarter
Year

105

426

5.6

11.1

98
12
10
11
7
5
13
4
11
6
4

536
185
138
190
262
604
878
740
1,049
583
642

6.4
-0.7
5.5
2.8
-5.3
7.6
0.8
-3.0
4.2
3.5
6.5

11.9
1.7
-7.4
-0.5
-11.5
11.6
8.0
-3.7
1.6
-2.9
13.1

528

12.4

27.4

Northern Louisiana
Southern New Mexico

3
4

510
109

-2.6
-4.0

-8.4
2.8

DISTRICT

1992 dollars per acre

Average
Value'
Banks'
First Quarter 2001

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 1-Northern High Plains
,_

Our farmers are fading away and
not by choice. They have got to get a
price for their crops that will produce
positive cash flows or we won't have
any farmers left.
We have received good moisture
all winter. Dryland wheat and cattle
prospects are good. Row crop farming
suffered serious equity losses in 2000.
Farmers will have an extremely hard
time in 2001 with high energy costs
and low commodity prices.
Not many good loans in the agriworld here.
Farm loans are desperate. Without
another government payment, most
farms will not have positive cash flows
next year.

Region 4 -Southern Low Plains

Farmers need an incentive to produce. They have actually been realizing
more money from crop insurance
and disaster programs than production.
The federal government has failed to
be involved in a manner that is equitable to the producer. When is somebody going to realize that were it not
for agriculture, there would be no
other culture?
There are no real estate transactions in this area for cropland or ranchland used solely for agricultural purposes. All sales are to outside investors for
recreation purposes and investments.
The long wait on crop disaster program checks is causing delay in working 2001 loans.
-

Region 5-Cross Timbers
Much rain . Cattle prices are good.
There is very little wheat to be harvested.

Moisture conditions are excellent.
Wheat grazing is beginning to come
about with warmer conditions.
Land values are increasing, largely
because of hunting.

Row crop acreage is decreasing.
We have seen a dramatic decrease
in the number of land purchase loan
applications in recent weeks, possibly
signaling a cooling in what has been a
very active market.
-

Region 9-Coastal Texas
1 ~

Agriculture real estate loan demand
has fallen off drastically. The likely
cause of this decline in loan demand is
the stock market and economic recession. Also, agriculture lenders are being
very cautious about credit quality on
livestock-secured loans.
-

Region 10-South Texas

Strong interest in prospective recreational hunting properties continues to
boost sales prices. These prices are fa r
out of proportion to any income produced by the properties.
-

Region 6-North Central Texas

2000 crop loans and equipment
loans were generally paid as agreed.
However, after debt service, no funds
remained. Operating loans were
requested almost immediately. Loan
demand remains strong.
Although the prime rate has gone
Region 2-Southern High Plains
,_
down, we have not changed the rates
we charge on loans or the rate we pay
The loan season has been very
frustrating due to large amounts of car- on deposits.
It's too wet to plow, plant or anyryover debt among consumers and an
thing else. Farmers and bankers are
inability to service debt requirements.
getting nervous due to the delay. We
Extensive debt restructuring is needed
normally have 70,000 acres planted in
but is limited by available collateral.
our county by now, and so far this year
More customers than normal are seekwe have only planted 5,000. We need
ing credit elsewhere or liquidating.
dry weather soon, or we may have to
Substantial levels of renewals/
extensions are required on farm operat- switch to other crops, such as cotton.
ing lines as a result of low commodity
Region 7-East Texas
prices and high input costs in 2000.

Region 3-Northern Low Plains

Region 8-Central Texas
,_

·-

The Texas cattle market is encouraging, and it appears this will be a
good year for our cattle customers. The
row crop customers are already into a
very wet spring, with no field work
done this year.

Region 11-Trans-Pecos and
Edwards Plateau

Recent rains have improved the
markets. We w ill need additional rain
for spring grass. Real estate values
have increased due to speculators purchasing ranchlands and making subdivisions.
Our county has an agricultural
economy, but it has long since ceased
to be the backbone of our general
economy.

Region 12-Southern New Mexico
Good winter moisture. Wheat is
beginning to grow. Pastures are overgrazed due to last year's drought, but
some green is beginning to show.
Cattle profits are up, but the fa rm
segment is hurting. Our land values
have been affected by the dairy industry.

Full text of Agricultural Survey : First Quarter 2001

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