Full text of Agricultural Survey : Fourth Quarter 1993

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STATISTICAL
F

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D

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A

R E S E R V E

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RELEASE
B A

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0

F

D A L L A S

Quarterly Survey of
·cultural
Credit Conditions in the
Eleventh Federal Reserve District
Fourth Quarter 1993

Agricultural Credit
Conditions at Survey Banks
in the Eleventh District

District
Farm Economy
Remains Bright

Demand for Loans
Percent
100

80

Quarterly Survey of
Agricultural Credit
Conditions is compiled from
a survey of Eleventh District
agricultural bankers. This
publication is prepared by
the Federal Reserve Bank

The Eleventh District's survey of agricultural
credit conditions indicates that 1993 was a year of
improvement for agricultural banks and producers.
Low interest rates helped boost agricultural banks'
profit margins and producers' balance sheets. Farmers and ranchers operations also benefited from
generally good crop production and prices.
Agricultural banks' 1993 performance is expected to match that of 1992, their most profitable
year in more than a decade. Fourth-quarter survey

60

40

20

1988

1989
Less

of Dallas and is available

1990

• Same

1991

1992

1993

• Greater

(Continued on page 4)
without charge by writing to
the Research Department,

Funds Available tor Add itional Lending

Federal Reserve Bank of
Dallas, P.O. Box 655906,

Percent

District Land Values

100

1987 dollars per acre

Dallas, TX 75265-5906, or

1,200
80

by telephoning (214) 9221,000

5254.

60
800

For questions regarding

600
/

information in the release,

40

--

.... ....

400

... ...

....

--- ______ ,

Ranchland - ..... -

contact Kelly Whealan,
200

(214) 922-5175, or Karen
Gee, (214) 922-5178.

20

1988
'82

'83

'84

'85

'86

'87

'88

'89

'90

'91

'92

'93

1989

1990

Less

• Same

1991

1992

• Greater

1993

STATISTICAL

RELEASE

Agricultural Credit Conditions at Survey Banks
in the Eleventh District
Rate of Loan Repayment
Percent
100

Loan-Deposit Ratios at Survey Banks

80

Average Actual and Desired Ratios
Percent
60

40

20

0
1987

1988

1989

Less

1990

• Same

1991

1992

1993

• Greater

•

Actual Ratio

•

Desired Ratio

1992:4

1993:1

1993:2

1993:3

1993:4

Renewals or Extensions of Loans
Percent
100

DISTRIBUTION OF LOAN-DEPOSIT RATIOS

80

Banks Reporting (Percent)

60

Ratio

Jan. 1

1993
Apr. 1
Jul. 1

Oct. 1

1994
Jan. 1

46
21
16
9
8

21
17
8
9

Oct. 1

1994
Jan. 1

9.12
9.37
9.46
9.34

9.06
9.32
9.44
9.21

Oct. 1

1994
Jan. 1

7.94
8.20
8.06
7.96

7.92
8.14
8.09
8.00

40

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

20

0
1987

1988

1989

1990

Less

• Same

1991

1992

1993

50
24
17
6
3

52
22
16
6
5

53
16
17
8
6

44

INTEREST RATES-FIXED

• Greater

Average Rate (Percent)

Amount of Collateral

Loan Type

Jan. 1

1993
Apr. 1
Jul. 1

Percent

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

100

80

9.71
9.77
9.99
9.89

9.39
9.53
9.57
9.45

INTEREST RATES-VARIABLE

60

Average Rate (Percent)

40

Loan Type

Jan. 1

20

0
1987

9.52
9.66
9.71
9.54

1988

1989

Less

1990

• Same

1991

1992

• Greater

1993

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

9.16
9.25
9.21
9.10

1993
Apr. 1
Jul. 1
9.03
9.20
9.17
8.99

8.51
8.73
8.71
8.54

STATISTICAL

Rural Real Estate Values

RELEASE

CROPLAND- ORYLAND

January 1, 1994
Region

1

Number of banks reporting land values .
Nominal dollars per acre.
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.

Average
Value 2
Banks'
Fourth-Quarter1993

P ercent Changes
in Values from
Previous Previous
Quarter
Year

DISTRICT

166

542

.8

3.1

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

152
23
17
10
13
14
26
7
16
7
7

536
269
356
300
410
416
650
661
933
753
605

.6
-1.2
.7
1.8
- .3
-3.7
- 2.6
3.7
2.8
1.0
3.3

3.1
4.7
3.7
2.2
-1.4
-4.3
- 1.4
7.1
9.7
4.1
10.9

12

562

1.5

--8.2

Northern Louisiana
Southern New Mexico

10
4

653
239

2.0
4.4

3.9
-4.8

Eleventh Federal Reserve District
CROPLAND-IRRIGATED

Region

12
N EW

1
2
3
4
5
6
7

DISTRICT

ME XICO

Northern High Plains
Southern High Plains
Nmthern Low Plains
Southern Low Plains
Cross Tunbers
North Central Texas
EastTexas

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

Average
Value 2
Banks'
Fourth-Quarter1993

Percent Changes
in Values from
Previous P revious
Quarter
Year

110

656

-1.8

-7.2

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

93
22
17
9
4
6
5
n.r.
10
n.r.
7

623
505
594
419
590
626
862
n.r.
1237
n.r.
870

- .9
.3
2.9
-3.2
- 2.7
-4.7
-4.8
n.r.
3.7
n.r.
- 5.9

-.6
3.7
8.0
4.9
-3.0
--6.2
5.0
n,r.
5.1
n.r.
-3.1

11

742

.9

-3.2

Northern Louisiana
Southern New Mexico

9
5

888
902

3.0
n.r.

6.9
n.r.

RANCH LAND

Region

Average
Value 2
Banks'
Fourth-Quarter1 993

P ercent Changes
in Values from
Previous Previous
Quarter
Year

DISTRICT

179

295

.2

.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

168
21
14
10
13
15
28
15
17
7
8

357
159
121
154
232
350
583
678
804
456
407

.7
1.1
- .8
- 2.9
1.5
-.5
- .3
2.1
.5
-4.9
3.7

1.0
.4
-12.3
-9.2
.6
1.6
2.8
10.7
5.9
-2.7
.5

20

297

.7

- 1.7

7
4

388
119

-1.6
- 3.5

3.7
- 7.2

Northern Louisiana
Southern New Mexico

STATISTICAL

Fourth-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

Good prices make the 1994 wheat crop
look promising. Wheat-pasture cattle have
shown fairly good gains, although not much
wheat pasture is available. Cattle have shown
some losses in the feed yard.
Region 2-Southern High Plains

Solid crop yields and prices helped area
farmers earn healthy profits in 1993. Many
farmers have deferred most, if not all, 1993
crop revenues until after year-end for tax
purposes.
Region 6-North Central Texas

Poor yields and weak prices in 1993
caused serious problems for some farmers.
FmHA's refusal to help local farmers in most
cases has caused problems. FmHA appears to
be more interested in making low income real
estate loans.
The greatest factor restricting our
agricultural lending is the difficulty borrowers
encounter in projecting positive cash flows.
Region 7-East Texas

Summer rains came early, then the cotton
crop suffered in hot, dry weather. Even
irrigated crops suffered. As a result, the cotton
yield was 30 to 40 percent lower than the
norm. FmHA help in direct or guaranteed
loans has been requested. Some farmers may
lack the cash necessary to remain in business.
Region 11Trans-P ecos and Edwards Plateau

Our severe drought conditions are
making heavy supplemental feeding necessary. Soil moisture conditions for the spring
planting season are poor.

RELEASE

District Farm
Economy Remains Bright
(Continued from page 1)

results reflect a continuing healthy spread
between the interest rates charged on Joans
and paid on deposits. Banks' average interest rates charged on Joans and the
average cost of funds were stable in the
fourth quarter of 1993, after steadily dropping during the first three quarters of the
year. Nonperforming agricultural Joans and
charge-offs continued to inch downward.
Loan demand increased in 1993, as
survey respondents had expected. Agricultural lending jumped 8.7 percent in the
third quarter of 1993, 6.4 percent above last
years' levels. Low interest rates and improved farm incomes encouraged farmers
to borrow money to purchase new equipment.
District banks continue to have ample
funds to lend, and survey respondents indicated they would like to increase lending
to creditworthy borrowers. Overall, Joan-todeposit ratios increased during 1993 but
still remained lower than desired.
Land values remained stable in 1993.
Overall, ranchland values were flat during
1993, and transactions increased because
buyers believed land prices had bottomed
out. Dryland values inched slightly upward
last year, while irrigated land values fell 7
percent.

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Dallas provides free econom ic data
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data and text.
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Research Department
Federal Reserve Bank of Dallas
P.O. Box 655906
Dallas, Texas 75265-5906
(214) 922- 5178