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First Quarter 2013

DALLASFED

Agricultural
Survey

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

Survey
Highlights

B

Farm Lending Trends
What changes occurred in non-real-estate farm loans at your bank in the past three months
compared with a year earlier?
Index*

ankers responding to the first-quarter

Percent reporting, Q1

2012:Q4

2013:Q1

pGreater

Same

qLess

–12.0

–14.4

16.6

52.5

30.9

Availability of funds

33.6

31.4

32.9

65.7

1.4

conditions. Respondents expressed concern

Rate of loan repayment

12.0

13.7

18.7

76.3

5.0

for the livestock sector as ranchers faced

Loan renewals or extensions

–11.4

–10.8

4.3

80.6

15.1

survey continued to emphasize the
need for rain as a great majority of

the Eleventh District remained in drought

Demand for loans

poor pasture conditions and high feed costs.
The winter wheat crop benefited from timely
precipitation in parts of the district, particularly the High Plains.
Agricultural land values in the first
quarter were largely unchanged from fourth
quarter 2012 levels. Ranchland and dryland

Index
50

30

10

while irrigated cropland values, which are

0

year-ago levels. The great majority of survey

–10

respondents expect farmland values to hold

–20

steady over the next three months.

–30

The farm income index posted a positive
reading, indicating farmers’ and ranchers’
incomes were up this quarter compared with
a year ago. Ninety percent of bankers reported no change in credit standards, while most
of the remainder tightened their standards.

Rate of loan repayment

20

values were slightly below year-ago levels,
on an upward trend, were 10 percent above

Availability of funds

40

Loan renewals
or extensions

Demand for loans

–40
–50

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

What changes occurred in the volume of farm loans made by your bank in the past three months
compared with a year earlier?
Index*

Demand for loans declined more steeply

Percent reporting, Q1

2012:Q4

2013:Q1

pGreater

Same

qLess

Non-real-estate farm loans

–12.8

–2.9

18.3

60.6

21.2

sions declined again, but the great majority

Feeder cattle loans

–17.2

–16.7

11.7

60.0

28.3

of respondents noted no change. Volumes of

Dairy loans

–16.0

–14.4

0.0

85.6

14.4

loans declined across all types, with feeder

Crop storage loans

–12.6

–8.7

3.9

83.5

12.6

–4.9

–6.0

16.5

60.9

22.6

Farm machinery loans

–15.0

–10.2

13.1

63.5

23.4

Farm real estate loans

–11.0

–1.4

19.6

59.4

21.0

this quarter, while loan repayment rates
continued to rise. Loan renewals and exten-

cattle loans seeing the steepest drop.

Operating loans

*Survey responses are used to calculate an index for each item by subtracting the percentage of bankers
reporting greater from the percentage reporting less. Positive index readings generally indicate an increase,
while negative index readings generally indicate a decrease.

} Quarterly Comments
District bankers were asked for additional comments concerning
agricultural land values and credit conditions. These comments
have been edited for publication.

Region 1 • Northern High Plains

Region 4 • Southern Low Plains

XXThanks to good snow moisture in February, a

XXThe oilfield and mineral rights are driving all

dryland wheat crop that we thought we had lost
months ago is now emerging. Native pasture
will probably take a few years to recover, so the
cow herd is not rebuilding yet in the northern
Panhandle.

Region 2 • Southern High Plains

XXDrought is still a problem in West Texas, and

we would appreciate some significant moisture.
A farm bill would be helpful also.
XXThe drought continues, but our area did
receive light precipitation recently, which helped
the winter wheat crop. We still need much more
rain to replenish soil moisture before planting.
The USDA Supplemental Revenue Assistance
Payments Program was a blessing to many area
farmers. Proceeds from federal crop insurance
and the crop disaster program helped some
farmers stay in business and others from losing
much equity for the second year in a row. Irrigation supplies continue to deteriorate, and the
ongoing drought conditions and declining water
table are changing the number of planting acres
and types of crops being planted.
XXFederal disaster payments from the USDA
Supplemental Revenue Assistance Payments
Program for 2011 drought losses have made a
big difference for South Plains row crop operators. These helped heal up many producers after
two consecutive years with extreme drought.
Most producers will start 2013 in decent financial
condition.

Region 3 • Northern Low Plains

XXUnderground moisture conditions have

improved in most of the area we service. We are
still not out of the drought, but we are hopeful for
a good start to the growing season.
XXThe average rancher is growing tired of
supplemental feeding and having to constantly
move herds to access grass. Farmers are using
a lot of calculator time guessing which crops are
best for 2013. Recent moisture has hopes high
for 2013.
XXWe still need rain.

land sales in our area. Very little land is being
bought with profits from last year’s farming
operations.

12
N E W

M E X I C O

Regions of the Eleventh
Federal Reserve District

Region 5 • Cross Timbers

XXLack of adequate rainfall is causing expenses

to increase for ranchers and will negatively
impact income because less forage will produce
less weight gain in cattle. Ranchers risk overgrazing their pastures.
XXWe had adequate rains in January to keep
winter grain fields alive, but winter has been
fairly mild so far, with little ice and snow or
severe cold. Hay usage is not as high as normal,
so supplies will last and prices are lower. Beef
cattle prices are still very good. Dairies are doing
better with higher milk prices, but feed costs are
still very high.
XXWith no grass for grazing and low to dry stock
tanks, ranchers are selling at least half of their
herds.

Region 6 • North Central Texas

XXAgain, dry conditions continue to affect our

livestock producers while limiting winter pasture
growth and stock water. Supplemental feeding of
cattle is costly with high feed commodity costs.
Hay supplies appear adequate with higher-thannormal prices. Cattle prices are strong over all
classes. Inquiries on purchases of ranchland
have increased, while asking prices remain fairly
stable. Farm fuel and fertilizer costs remain elevated, but lack of rain remains the larger issue.

Region 7 • East Texas

XXLand values for dryland and irrigated cropland

in our county are expected to increase over the
next two years as approximately 1,500 acres of
prime farmland will be taken out of production
for a train switching station. Prices paid for this
land appear to be 15 to 20 percent over market
value, and as those sellers begin to look for other
properties, they will be able to pay a little more
than expected.

Agricultural Survey • First Quarter 2013 • Federal Reserve Bank of Dallas

Region 8 • Central Texas

XXThe drought has come back, and along with

a lack of moisture we have been dealing with
high wind conditions that further dry everything
out. Stock water is starting to become an issue
going into the spring, with most ponds and stock
tanks at very low levels and continuing to drop.
Producers are feeding their cattle more hay
now than they did back in December, and hay
supplies could get tight if the drought continues
into the early summer months. Corn planting has
been delayed in our area until farmers can get
sufficient water to plant. We all need rain.
XXThe Lower Colorado River Authority ruled no
irrigation water would be released to farmers in
Colorado, Wharton and Matagorda counties for
the second year in a row. Farmers will receive
prevented planting insurance proceeds. Prices
remain strong for local commodities. Row crop
planting has started. We need rain for topsoil
moisture at this time. Ranchers experienced a
mild winter with lower costs than last year.
XXCattle numbers are 50 to 60 percent less than
they were two years ago. Ranchers are reluctant
to restock. Surface water will be critical if no
spring rains come. We have had very few agrelated land deals; most have been smaller tracts
used for recreational purposes.

Region 11 • Trans-Pecos and
Edwards Plateau

XXThe drought continues to have a great impact

on the farming industry. Restrictions on well
pumpage due to Edwards Aquifer Authority rules
will cut back on the planted acreage in the area.

Rural Real Estate Values—First Quarter 2013
1

Banks1

3

Average
value2

First quarter
2013

Percent change3
in value from
Previous Previous
quarter
year

Cropland—Dryland

2

4

5
6

11

District

L O U I S I A N A

7

13

T E X A S

8

9

108

1,425

0.1

1.8

Texas
1 Northern High Plains

93
15

1,441
685

–0.1
5.6

1.9
23.4

2 Southern High Plains

12

646

0.0

6.4

3 Northern Low Plains

7

764

0.0

0.0

4 Southern Low Plains

6

908

3.4

1.6

5 Cross Timbers

7

1,279

0.0

10.4

15

2,273

1.7

4.8

5

1,950

–3.5

–11.6

8 Central Texas

10

2,675

–2.9

–4.9

9 Coastal Texas

4

1,513

0.0

5.6

n.a.

n.a.

n.a.

n.a.

11

1,577

0.0

1.9

4

388

9.0

0.0

11

1,877

0.6

2.5

6 North Central Texas
7 East Texas

10

10 South Texas
11 Trans-Pecos and Edwards Plateau
12 Southern New Mexico

XXConditions are dry in the Edwards Plateau

region. Though some rains fell last year, it seems
that the timing never was exactly right for the
growing of grass. Drought conditions worsened
later on in 2012, and the past five to six months
are reminiscent of the 2011 drought. Some area
farmers are comparing the current drought to the
one in the 1950s. Livestock herds are down, and
feed prices are up. Many have chosen to get out
of the business altogether. Fortunately, livestock
prices are at a premium, somewhat softening the
blow for those forced to sell out. Overall, the ag
situation for the foreseeable future in our area
does not have many bright spots.
XXThe drought continues, and livestock numbers
are way down.
XXPastures are short of grass, and supplemental
feeding continues. Our area is in need of rainfall.
XXAlthough North Central Texas has received
some rain in the past two months, the area
remains drier than normal. Lake levels remain
very low. Due to a lack of rain, there is less pasture forage. Livestock input costs remain high.
Livestock are being sold for record high prices
at local sale barns. Although market prices are
relatively high, ranchers do not have confidence
in the livestock futures market volatility. Area
ranchers are fertilizing wheat pastures but are
cautious of fertilizer use because of its high price.

Region 12 • Southern New Mexico

XXThe drought is forcing many ranchers to find

pasture out of state or take their cattle to market.

13 Northern Louisiana

Cropland—Irrigated
District

83

2,050

1.2

9.3

Texas
1 Northern High Plains

65

1,922

1.8

12.0

15

1,827

9.4

23.2

2 Southern High Plains

12

1,510

–3.6

12.5

3 Northern Low Plains

5

1,450

0.0

–8.7

4 Southern Low Plains

4

1,575

6.3

0.0

5 Cross Timbers

n.a.

n.a.

n.a.

n.a.

6 North Central Texas

n.a.

n.a.

n.a.

n.a.

3

2,400

18.2

0.0

8 Central Texas

8

2,819

–3.6

6.9

9 Coastal Texas

n.a.

n.a.

n.a.

n.a.

7 East Texas

10 South Texas

n.a.

n.a.

n.a.

n.a.

11 Trans-Pecos and Edwards Plateau

8

3,500

–1.1

2.8

12 Southern New Mexico

7

2,671

3.8

1.0

11

2,627

–4.7

0.4

119
105

1,467
1,752

0.8
–0.2

–0.1
–0.3
14.3

13 Northern Louisiana

Ranchland
District
Texas
1 Northern High Plains

14

514

6.2

2 Southern High Plains

8

606

–1.3

0.0

3 Northern Low Plains

7

754

–1.8

–8.5

4 Southern Low Plains

6

1,067

6.5

3.7

5 Cross Timbers

10

1,595

–8.8

–10.5

6 North Central Texas

16

2,469

4.2

3.1

7 East Texas

13

2,446

–0.6

3.7

8 Central Texas

12

3,763

–2.4

–7.5

9 Coastal Texas

3

1,033

–7.5

10.4

n.a.

n.a.

n.a.

n.a.

15

1,677

1.5

4.2

12 Southern New Mexico

6

246

39.3

4.3

13 Northern Louisiana

8

1,625

3.4

6.9

10 South Texas
11 Trans-Pecos and Edwards Plateau

Number of banks reporting land values.
Prices are dollars per acre, not adjusted for inflation.
Not adjusted for inflation and calculated using responses only from those banks reporting in
both the past and current quarter.
n.a.—Not published due to insufficient responses but included in totals for Texas and district.
1
2
3

Agricultural Survey • First Quarter 2013 • Federal Reserve Bank of Dallas

Real Land Values

Real Cash Rents

2005 dollars per acre
1,800

2005 dollars per acre per year
120
Irrigated

1,600

100

1,400
1,200

80

Dryland

1,000

60

800
600

40

400

Dryland

20

200
0

Irrigated

Ranchland

0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Long-term farm real estate

Intermediate term

Other farm operating

2003

2004

2005 2006

2007 2008

2009 2010

2011

2012 2013

Anticipated Farmland Values, Income and Credit Standards

Interest Rates by Loan Type

Feeder cattle

Ranchland

Fixed (average rate, percent)
2012:Q1

6.54

6.63

6.49

6.19

Q2

6.43

6.50

6.46

6.36

Q3

6.56

6.55

6.51

6.23

Q4

6.37

6.47

6.32

6.19

2013:Q1

6.43

6.53

6.30

6.12

What trend in farmland values do you expect in your area in the next three months?
Index*
Anticipated trend in farmland
values

Percent reporting, Q1

2012:Q4

2013:Q1

pUp

Stable

qDown

12.1

13.0

15.1

82.7

2.2

What change occurred in farm income for farmers and ranchers in your area in the past three months
compared with a year earlier?†
Farm income

0.0

7.9

27.3

53.2

19.4

What change occurred in credit standards for agricultural loans at your bank in the past three months
compared with a year earlier?†
Credit standards

2012:Q4

2013:Q1

pTightened

Same

qLoosened

8.7

8.6

9.3

90.0

0.7

Index
50
40
30

Credit standards †

20

Variable (average rate, percent)
2012:Q1

5.97

6.09

6.06

5.79

Q2

5.90

5.96

5.98

5.70

Q3

6.04

6.09

6.05

5.69

10
0

Q4

5.83

5.93

5.94

5.62

2013:Q1

5.87

5.98

5.84

5.57

–10

Anticipated trend
in farmland values

–20

Farm income†

–30
–40
–50

2010

2011

2012

2013

*See note on bottom of page 1.
†
Added to survey in second quarter 2011.

DALLASFED

Agricultural Survey
is compiled from a survey of Eleventh District agricultural bankers. Data were collected March 5–13,
and 140 bankers responded to the survey. This publication is prepared by the Federal Reserve Bank
of Dallas and is available without charge by sending an email to pubsorder@dal.frb.org or by calling
214-922-5254. It is available on the web at www.dallasfed.org/research/agsurvey.
For questions, contact Amy Jordan, 214–922–5178.
Agricultural Survey • First Quarter 2013 • Federal Reserve Bank of Dallas