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First Quarter 2017

DALLASFED

Agricultural
Survey

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

Survey
Highlights

B

Figure 1

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
survey noted moisture conditions
were generally good but gave mixed

reports on rainfall, with some regions receivrain entering the spring. There were scattered

Loan renewals or extensions

reports of producers paying out their lines of

Index

credit, but in general, respondents noted a

50

stock pastures were mostly in good condition,
but predators were seen as an increasing issue
for ranchers.
Demand for agricultural loans overall
decreased for a sixth consecutive quarter.
Loan renewals and extensions continued
to increase, albeit at a slower pace, as loan
repayment rates continued to decline. The
volume of both non-real-estate and real estate

–5.8

–5.3

15.3

64.1

20.6

3.1

5.7

13.1

79.5

7.4

–19.8

–7.1

13.5

65.9

20.6

15.1

6.3

15.8

74.8

9.5

Availability of funds*

Loan renewals
or extensions
Rate of loan repayment

20
10
0
–10
–20

ing loan volume, which had been increasing,

–40

Real district ranchland and irrigated

qLess

30

–30

fell in all other loan categories (Figure 1).

Same

40

farm loans was lower than a year ago. Operatwas flat year over year this quarter; volumes

pGreater

Availability of funds*
Rate of loan repayment

need for higher crop and cattle prices. Live-

2017:Q1

Demand for loans*

ing beneficial rains and others still in need of

Percent reporting, Q1

2016:Q4

–50

Demand for loans*

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

cropland values increased this quarter, while

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

real dryland values decreased (Figure 2). Ac-

Index

cording to bankers who responded in both

Percent reporting, Q1

2016:Q4

2017:Q1

pGreater

Same

qLess

–6.3

–4.7

11.8

71.7

16.5

this quarter and first quarter 2016, nominal

Non-real-estate farm loans

district land values all rose year over year,

Feeder cattle loans*

–26.0

–18.9

4.8

71.5

23.7

with irrigated cropland showing the strongest

Dairy loans*

–10.0

–9.6

1.4

87.6

11.0

–2.0

–4.0

6.2

83.6

10.2

4.0

0.0

15.5

69.1

15.5

increase (Table 1).
The anticipated trend in farmland values
index remained negative for a seventh consec-

Crop storage loans*
Operating loans

utive quarter, suggesting respondents expect

Farm machinery loans*

–30.5

–19.1

3.3

74.3

22.4

farmland values to trend down in the coming

Farm real estate loans*

–16.5

–17.2

4.4

74.0

21.6

months. The credit standards index indicated

*Seasonally adjusted.

continued tightening of standards (Figure 4).

NOTE: Survey responses are used to calculate an index for each item by subtracting the percentage of
bankers reporting less from the percentage reporting greater. 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

XXOur livestock producers are still sitting on the

sidelines due to the volatility in prices, and our crop
producers are still feeling the effects from the low
prices.

Region 2 • Southern High Plains

XX2016 was a very good year for most of our cus-

tomers. We still had a few that didn’t get the rains
last summer and they were okay, just not great.
There were greater-than-normal pay downs on
carryover and equipment notes, but there is some
interest now in purchasing equipment. However,
lenders and producers will face uncertainty in commodity prices.

XXEverything is greening up a little early this

year. A mild February led to less hay being fed in
general, and most now have a large amount carried
over and the price is down considerably. We still
have good moisture conditions with good grazing
on winter pastures, and most ponds and lakes are
still full or close to it.

Region 3 • Northern Low Plains

XXThe unstable political environment, with threats

of disrupting trade agreements, has created volatile
commodity prices. Producers struggle to find
profitable crop scenarios, and the uncertainty of the
markets compounds their planning issues.

Region 4 • Southern Low Plains

XXProducers and bankers are so excited because

they paid out. Already, producers are planning on
buying new strippers, etc. In the spring, we were all
looking for a good farm sale to sell equipment. Now
it is vehicle and equipment upgrades.

Region 5 • Cross Timbers

XXFarmers are beginning to plow. Moisture has

been decent, but rain is needed. The recent drop in
cattle prices has had an impact on most ranchers’
profitability.

M E X I C O

Regions of the Eleventh
Federal Reserve District

Region 6 • North Central Texas

XXGrain prices need to increase as inputs are still

high, especially seed and tech fees. Cattle prices
need improvement as well. Two poor years in a row
is not good.

XXFarmers have had two bad crop years in a row

due to too little or too much rain. Calf prices are still
off of their highs.

XXSouth Plains cotton producers experienced unex- XXThere should be an abundance of heavy calves
pectedly better results. Although there were delays
in harvest and ginning backlogs, yields were almost
universally better than expected. Prices were also
higher than planned (about 70 cents per pound vs.
63 cents originally projected). As a consequence, all
our customers are paying out their farm lines. This
is the first year in several this has occurred. Cattle
feeders are still licking their wounds, although
recent closeouts are in the black for the first time
in almost two years. Subsoil moisture is good. So,
things are a little more positive.

12
N E W

going to market in the first half of 2017.

XXGeneral agricultural conditions are currently

putting stress on farmers and ranchers in our area.
Commodity prices must stabilize at higher levels
for the overall agricultural environment to improve.
Most farmers and ranchers in our area subsidize
their agriculture operations with outside family
income from other employment.

Region 7 • East Texas

XXThe cattle market is still relatively volatile. We

certainly would not hesitate to make a livestock
loan; however, the collateral coverage requirement
is somewhat more stringent at this time.

Region 8 • Central Texas

XXSpring is coming fast, and it looks to be an

excellent growing year if this holds together in the
summer months. Hay feeding has slowed down
with warmer weather. Farmers got a little delay in
planting due to rains, but most have their corn in
the ground and are ready to go. Cattle prices keep
climbing, with special cow/heifer sales in the area
showing big gains as ranchers are showing more
optimism in buying replacement cattle for the year.
The real estate market seems to have cooled off for
a while as people wait to see what will happen with
the economy and other situations facing the new
president.

XXPasture conditions are very good, with adequate

rainfall; cattle prices are weaker but seeing a trend
toward strengthening.

Agricultural Survey • First Quarter 2017 • Federal Reserve Bank of Dallas

Region 9 • Coastal Texas

XXCattle prices have stabilized. The cost of crop

production equals or exceeds sales proceeds and
government payments.

XXRain in last 14 days has dramatically helped the

overall conditions of planted crops in the area or
preplanting conditions. There is a smaller-thanaverage amount of wheat plantings this year. Cotton
and grain acreages will be back to average acres
from prior to 2013. Most rotations will be back to
normal, and some are trending a little heavier to the
cotton side. Cotton prices are the key component
to planting increases that make some profitability
sense. The majority of grain has been planted, and
cotton had been started prior to the rains. Hay sales
had spikes in the last three months, with pasture
condition being at average to below average in
some areas. Supplementing of cattle was also
increasing with spring calving starting. Pastures are
starting to show improvement from recent rains,
with ample moisture to allow for grass growth. The
cattle market in our area has had moderate cattle
sales with holdovers from 2016 calves. Cattle prices
at local auction have been stable. Replacements
are being held back in order to restock pastures, replace normal culled animals or sell at private treaty.

Region 11 • Trans-Pecos and
Edwards Plateau

XXCattle prices have strengthened a bit in the last

quarter, and sheep and goat prices are strong.
Rangeland is in pretty good condition going into the
spring due to a relatively mild, wet winter. With a
bit of rain in a timely manner, 2017 could be a good
year for livestock producers in the Edwards Plateau
region. Predators continue to be a real problem for
sheep and goat producers and, because of that fact,
many ranchers have just gotten out of the business
due to the cost of trying to combat the coyotes,

Table 1

Rural Real Estate Values—First Quarter 2017

1

Banks1

3

Average
value2

Percent change
in value from
previous year3

Cropland—Dryland
District*

2

4

L O U I S I A N A

5
6

11

7

T E X A S

8

13

102

1,793

4.6

Texas*
1 Northern High Plains

93
12

1,817
904

3.9
–1.1

2 Southern High Plains

11

773

19.7

3 Northern Low Plains*

7

778

2.8

4 Southern Low Plains*

6

1,075

17.7
–1.7

5 Cross Timbers

9

10

5

1,530

18

2,772

0.6

7 East Texas*

6

2,733

–4.1

8 Central Texas

15

3,607

2.4

9 Coastal Texas

5

2,500

2.6

6 North Central Texas

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

bobcats and hogs. It is an issue that actually threatens the sheep and goat industry’s future.

n.a.

n.a.

n.a.

6

1,575

12.9

n.a.
7

n.a.
2,450

n.a.
18.7

Cropland—Irrigated
District*

XXMoisture conditions are good—should have a

75

2,489

7.8

64

2,270

8.4

good spring. Livestock markets remain stable.

Texas*
1 Northern High Plains

12

2,063

–1.8

XXPasture conditions are very good with good

2 Southern High Plains

11

1,718

10.3

3 Northern Low Plains*

5

1,885

15.2

4 Southern Low Plains

6

1,367

11.9

5 Cross Timbers

3

2,717

–3.0

6 North Central Texas

5

3,130

9.5

7 East Texas

3

3,067

0.0

8 Central Texas

10

4,435

7.9

9 Coastal Texas

n.a.

n.a.

n.a.

ground moisture, which should make for a very
good spring. Markets for sheep and goats remain
good, with a lot of producers moving to hair sheep
from wool sheep. A number of producers are taking
advantage of the pullback in cow prices in the last
year to stock pastures that have abundant grazing
available. Predators remain one of the main problems, including coyotes, bobcats and even reports
of gray fox issues, as well as the exploded feral hog
population and their destruction of fences, waterings and pastures.

Region 12 • Southern New Mexico

XXLivestock yearling operations and crop produc-

tion continue to struggle with maintaining profitable
margins. Dry weather is taking a toll on dryland
wheat production, and dryland spring crops need
more moisture to begin planting. Ranch sales seem
to be slowing.

10 South Texas

n.a.

n.a.

n.a.

11 Trans-Pecos and Edwards Plateau

5

2,900

25.0

12 Southern New Mexico

4

3,750

0.0

13 Northern Louisiana

7

3,321

14.9

111
102

1,721
2,050

1.9
2.0

Ranchland
District*
Texas*
1 Northern High Plains

12

696

0.0

2 Southern High Plains

8

719

0.0

3 Northern Low Plains

7

814

0.5

4 Southern Low Plains*

6

1,162

8.0

8
19

1,969
2,705

5.9
2.5

5 Cross Timbers
6 North Central Texas
7 East Texas

8

2,606

–7.4

8 Central Texas

16

4,869

9.3

9 Coastal Texas

4

2,788

3.3

n.a.

n.a.

n.a.

10 South Texas
11 Trans-Pecos and Edwards Plateau

12

1,783

0.5

12 Southern New Mexico

3

308

0.0

13 Northern Louisiana

6

1,808

3.0

*Seasonally adjusted.
1
Number of banks reporting land values.
2
Prices are dollars per acre, not adjusted for inflation.
3
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.

Agricultural Survey • First Quarter 2017 • Federal Reserve Bank of Dallas

Figure 3

Figure 2

Real Cash Rents

Real Land Values
2015 dollars per acre
2,600
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2007 2008 2009 2010 2011 2012 2013

2015 dollars per acre per year
Irrigated

Irrigated

120

50

Dryland

100

40
Ranchland

80

Dryland

30

60
20

Ranchland

40

10
0
2014 2015 2016 2017

NOTE: All values have been seasonally adjusted. Real values are created by
deflating the nominal values using the implicit price deflator for U.S. gross
domestic product.

Table 2

2015 dollars per acre per year
140

60

20

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

0

NOTE: All values have been seasonally adjusted. Real values are created by
deflating the nominal values using the implicit price deflator for U.S. gross
domestic product.

Figure 4
Anticipated Farmland Values and Credit Standards

Interest Rates by Loan Type
Long-term farm real estate

Intermediate term

Other farm operating

Feeder cattle

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

Fixed (average rate, percent)

Index
Anticipated trend in farmland
values*

Percent reporting, Q1

2016:Q4

2017:Q1

pUp

Stable

qDown

–5.6

–2.8

5.3

86.6

8.1

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

2016:Q4

2017:Q1

pTightened

Same

qLoosened

16.5

15.0

16.5

81.9

1.6

Index
50

2016:Q1

6.07

6.11

6.09

5.81

Q2

6.08

6.19

6.07

5.82

Q3

5.98

6.07

5.96

5.72

20

Q4

5.98

6.11

6.03

5.72

10

2017:Q1

6.19

6.24

6.21

5.95

40
Credit standards †

30

0
–10

Anticipated trend
in farmland values*

–20

Variable (average rate, percent)
2016:Q1

5.72

5.74

5.78

5.38

Q2

5.73

5.80

5.68

5.32

Q3

5.60

5.63

5.64

5.36

Q4

5.65

5.65

5.63

5.29

2017:Q1

5.73

5.74

5.80

5.47

DALLASFED

–30
–40
–50

2011

2012

2013

2014

2015

2016

2017

*Seasonally adjusted.
†Added to survey in second quarter 2011.
NOTE: Survey responses are used to calculate an index for each item by subtracting the percentage of
bankers reporting less from the percentage reporting greater. Positive index readings generally indicate an
increase, while negative index readings generally indicate a decrease.

Agricultural Survey
is compiled from a survey of Eleventh District agricultural bankers, and data have been seasonally
adjusted as necessary. Data were collected March. 7–15, and 130 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 214-922-5270. It is available on the web at
www.dallasfed.org/research/surveys/agsurvey.aspx, where you may sign up for free email alerts to be
automatically notified as soon as the latest survey is released on the web.
For questions, contact Amy Jordan, 214–922–5178.
Agricultural Survey • First Quarter 2017 • Federal Reserve Bank of Dallas