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FEDERAL RESERVE BANK OF DALLAS STATISTICAL RELEASE

QUARTERLY SURVEY OF AGRICULTURAL CREDIT CONDITIONS
ELEVENTH FEDERAL RESERVE DISTRICT

Preliminary estimates from the July 1, 1989, survey of agricultural credit
conditions indicate a slight drop in the demand for loans even though the availability of
funds remains strong.
Over the last three months, interest rates on farm loans dropped between 10 and
30 basis points which encouraged many lenders. Nearly half of District banks would like
to increase the volume of loans available to farmers and ranchers. Feeder cattle loans
averaged 13.2 percent for fixed and variable rate loans, and other farm operating loans
averaged 13.3 percent during the second quarter.
District dryland values, unchanged from April 1, 1989, levels, appear to be
stabilizing. Irrigated land values increased, continuing a general upward trend. Second
quarter ranchland values slowed their ten year decline as they remained virtually
unchanged.
After dropping in the first quarter of 1989, second quarter cash rent values
rebounded moderately. Agricultural lenders expect farmland values to remain stable
over the next quarter.

Agriculture Credit Conditions at Survey Banks in the Eleventh District
Total 11th Federal Reserve District
July 1, 1989
The Survey asked bankers what changes
occurred in non-real-estate farm loans in
the past three months compared to a
year earlier. When the index moves
above 100, it indicates that the number
of bankers responding "higher is greater
than the number of bankers responding
"lower". It is important to take into
account the percentage of bankers
responding
"no
change"
when
interpreting
the
significance
of
movements in the index.

Demand for Loans

1985

1986

1987

1988

Amount of Collateral Required

= 56%

Percent indicating no change

= 66%

Rate of Loan Repayment

Percent indicating no change = 47%

Percent indicating no change

Renewals or Extensions

1989

Percent indicating no change = 68%

Availability of Funds

Percent indicating no change

= 56%

Agricultural Credit Conditions at Survey Banks
Total 11th Federal Reserve District
July 1, 1989

Loan-Deposit Ratio (percent)
Banks Desired Ratio
Distribution of loan-deposit ratios
(percent of banks reporting)
less than 41% ............. . ... .
41% through 50% ............... .
51% through 60% ............... .
61% through 70% . . ............. .
71% or more ................... .

1988
Jul 1

Oct 1

1989
Jan 1
Apr 1

49.9
59.5

52.3
60.3

48.7
58.0

45.8
57.3

48.1
58.6

30
23
20
18

26
18
23
19
14

32
20
27
13

39
23
23
10

32
25
20
18

7

5

6

9

Jul 1

---------------------------------------------------------------------------------Interest Rates (percent)
Feeder cattle loans
Fixed ......
Variable ...
Other farm operating
loans
Fixed ......
Variable ...
Intermediate-term
farm loans
Fixed ......
Variable ...
Long-term farm real
estate loans
Fixed ......
Variable ...

11.87
11. 65

12.43
12.34

12.63
12.79

13.33
13.50

13. 24
13. 21

11.96
11. 75

12.55
12.41

12.79
12.80

13.52
13. 51

13 .32
13.31

12.16
11. 75

12.61
12.44

12.82
12.82

13 .55
13.54

13 .33
13.24

11. 94
11. 61

12.41
12.24

12.49
12.47

13. 24
13.24

12.87
13.02

Farm and Ranch Real Estate Values
(Average Dollars per Acre)
July 1, 1989

82Ql
82Q2
82Q3
82Q4
83Ql
83Q2
83Q3
83Q4
84Ql
84Q2
84Q3
84Q4
85Ql
85Q2
85Q3
85Q4
86Ql
86Q2
86Q3
86Q4
87Ql
87Q2
87Q3
87Q4
88Ql
88Q2
88Q3
88Q4
89Ql
89Q2 p

----------ELEVENTH DISTRICT---------

----- -----------TEXAS---------------

Dryland
Cropland

Dryland
Cropland

$

743
750
768
759
753
756
772
800
811
823
805
798
774
759
740
717
684
639
607
595
583
571
562
558
567
573
572
564
556
556

Irrigated
Cropland
$

996
970
964
967
984
993
968
944
929
916
905
889
880
833
794
729
697
656
638
624
611
601
595
593
613
635
650
630
641
662

Ranch land
$

398
398
401
403
430
461
481
479
495
503
521
507
503
484
474
450
435
411
396
380
375
371
367
357
354
348
342
329
323
322

$

691
707
736
730
726
727
746
776
790
803
787
781
759
750
735
713
677
634
606
599
590
580
571
565
573
578
576
568
558
558

Irrigated
Cropland
$

908
902
911
908
918
919
903
900
897
895
876
864
842
797
756
698
666
621
603
590
585
576
575
576
586
611
623
617
610
619

Ranch land
$

All series completely revised in November 1986 .
A three-period, centered moving average is used to reduce the degree
of sampling error. The last values of each series are the estimates.
Values for the latest period will be revised subsequently.
c. Quarter dates are: Ql: April l , Q2: July l, Q3: October 1,
Q4: January 1.
p - Preliminary estimate .

NOTES:

a.
b.

476
487
500
502
538
568
595
593
603
614
640
646
645
618
607
576
554
521
502
486
481
476
472
457
454
446
436
417
410
410

.

Eleventh District 1 Rural Real Estate Values, July 1, 1989
and Percentage Changes from April 1, 1989
and July 1, 1988. A11 Land Values
in Dollars per Acre

Banks 2

Region

-----------------CROPLAND---------------------------------DRYLAND
IRRIGATED
Value
Percent Change from
Value
Percent Change from
2
Banks
$
4/1/89
7/1 /BB
4/1/89
7/1/88
$

--------------RANCHLAND------------Banks 2

Value
$

Percent Change from
4/1/89
7/1 /88

DISTRICT
Northern Louisiana
Southern New Mexico

255
14
5

555
570
212

0. 0
0.3
2.3

-3.0
2.8
4.7

155
11
11

552
801
1,040

3.3
1. 0
16.9

4.3
5.4
26.8

274
7
10

322
373
69

-0.2
-8 .4
-4.8

-7 . 5
10.0
0.6

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

245
32
30
15
14
23
35
16
30
20
14

558
250
341
317
416
484
729
666
928
822
644

0.0
-0.5
0.6
2. 5
-2.5
-2.5
0. 1
-1. 3
0.7
-0.4
5.5

-3.5
3.2
8.2
8.2
-3.7
1. 9
-4.4
-8.6
-7 .4
-1.8
6.3

143
31
30
11
7
9
4
NR
13
13
10

619
457
563
470
597
755
811
NR
1,108
766
1. 041

1. 4
0.7
1. 2
4.3
-5.0
-1. 0
1. 9
NR
7.2
4. 1
8. 7

1. 2
5. 0
11. 0
8.3
-7.5
-3.7
-5.7
NR
4.2
-9 . 9
13. 6

257
29
21
15
14
23
34
32
32
17
13

410
145
154
192
205
377
646
663
991
583
480

0.1
1. 7
5.7
5.2
0.2
-3 . 5
2.5
1. 0
9.4
-1. 0
1. 8

-8.0
3. 2
8.9
22.9
-3.3
-9 . 3
-4.2
-7.8
11. l
-17.7
-0.l

16

550

-3 . 7

-22.8

13

753

-16.2

-32.l

27

357

-5.2

-20.l

1 See attached D1str1 ct M~o for regional divisions.
Number of Bank~ Qpr o •tin~

2

NOTES:

a.
b.
c.

Regional land values based on a small number of reporting banks should be used with caution.
All values preliminary.
No response or not enough responses is indicated by NR.

Second Quarter Comments
District bankers were asked for any additional comments concerning agricultural land values or
credit conditions. Due to space constraints, not all comments could be printed.
Region 1 - Northern High Plains
... Approximately 80% to 90% of the cotton crop was hailed out and the corn crop received extensive
damage. Most farmers will replant soybeans, although some will go back with late cotton. Over the last 3
weeks, it has been extremely hot and dry.
,.. The 1989 wheat crop was a disaster due to drought, freeze and insect problems. Most producers had
FCIC insurance, which will minimize the negative effect on cash flows. Local elevators will be hurt more
than the farmers. We need disaster assistance for wheat crops from government.
,.. Good recent rains have made a good home for summer cattle. Corn and milo crops look good. We are
currently in need of moisture. Cattle prices as well as grain prices continue to fluctuate making marketing
extremely difficult.
,.. Loan demand has been soft. This is primarily due to severe winter and spring drought conditions which
have diminished demand for stocker cattle loans.
,.. Farmers planted a great amount of milo after wheat failed in hopes of obtaining a cash crop. Most
ranchers have ample grass for summer pasture. We are seeing a herd build-up in this area.
,.. The grass is probably as good as it has ever been at this time of year. Cattle have been doing
exceptionally well and stocker prices remain strong.
,.. Summer crop conditions are good. We will have average to above average harvest. Our area is dry at
this time, but early rainfall made our summer crop. We will need rain in August and September to help
wheat become established for grazing purposes. Loan repayment should come in close to projections.
Region 2 - Southern High Plains
,.. Crops are late and it is extremely dry for this time of year.
,.. Outstanding cotton yields in 1987 and 1988, but 1989 looks bleak to date. Extremely dry in many areas.
,.. Irrigated crops are great. Probably a month ahead 'on maturity. We had very little rain in our county,
and, therefore poor or no dryland crops.
... Pastures and cattle are in excellent condition. Cotton will need rain to make a good crop. Insect situation
shows higher than normal boll weevil counts. Some fields are currently being sprayed.
,.. No rain. Dry conditions. Crops are not good. Pasture grass is not good. I see farm problems.
Region 3 - Northern Low Plains
,.. Wheat crop was poor but its price was good. Farmers are still managing to hang on without any further
deterioration in condition. FmHA guarantees are working well.
... Very short wheat crop in June. Those with no Federal Crop Insurance had carry-over.
Region 4 - Southern Low Plains
,.. FDIC & OCC are draining money from community banks with the large bailouts they are allowing. Then
permitting them to pay 2% higher rates on certificates. These actions are not fair. This is tax money as
well as our assessments.
Region 5 - Cross Timbers
... Cattle prices have been good this year. Ranchers have made good money. Most farmers lost their grain
crops. This has been a bad year for farmers.
Region 6 - North Central Texas
... We have good rains in our area. Crop and cattle prices are good .
... Agricultural conditions are excellent at this time. We have had ample rain and crops couldn't look better.
Some contracts are available to farmers. Grain prices have been increasing. Cattle prices have remained
high; grass and hay are excellent. Over all, the agricultural conditions couldn't be better at this time.
... Wheat & oat crops were disasters. Cattle prices are very good and cattle numbers are increasing slightly.
Plenty of hay, but still short on reserves. Corn looks fair to good. Maize (milo) and cotton looks very
good! (Maize & hay planted over ruined wheat fields.)
... The late freeze--hail storm & rains--just about wiped out the wheat crop. Corn and milo look good at this
time. Cattle still looks good.

•

,.. Since the last quarterly report, agricultural conditions have changed for the better. We have had an
abundance of good rain. The prospect here in the Central Texas Area is looking very good for an
abundant harvest. If we can get a good price for the products produced, the farmers can help themselves
this year and repay some of the nold debts.n
,.. We had a poor wheat crop in the spring of '89. Milo and corn look good at this time. Cotton insects are
heavy and the expense of insect control is a real concern. Cattle prices are excellent. Moisture conditions
are good but have contributed to heavy insect infestation. We do not know of any recent real estate sales
in the area.
,.. Area wheat farmers suffered severe damage to their wheat crop this year due to the late (April) freeze.
Production is about 25% of average production. Production outlook for milo and corn is about average.
Region 7 - East Texas
,.. Farm and ranch land values are affected by potential development as well as agricultural productivity.
,.. Most of our ag folks are having a good year. Plenty of rain & hay. Cattle prices good. Anyone not
making money this year had better get out.
,.. We have had excellent rainfall this summer. Our dairymen are in good shape from a forage standpoint.
,.. We have had lots of rain in our area this year and hay is plentiful.
Region 8 - Central Texas
,.. FmHA's ability to loan funds has greatly reduced the farmers/ranchers who lack sufficient
collateral/credit lo be able to borrow operating & purchase money. FmHA's new program of guaranteed
loans is not acceptable to lenders in our area.
,.. Hot, dry conditions persist. Small-grain farmers ( dryland) lost all crops. Second year in a row for most.
Send rain!
,.. Some need a good general rain. We are dry and lots of our tanks are dry. Cattle prices are excellent.
,.. We have had some very beneficial rains. Stockmen have more grass and hay than needed. Land is not
selling. Farmers are leasing their acreage for oiljgas drilling with moderate success.
,.. Shortage of rain has really affected crop production and cattle range.
,.. Drought still hanging on. One farmer told me this is the 5th year without decent crop. This year he has a
total loss, as do many other farms in this area. Federal Crop Insurance doesn't help a lot because of the
low yields in this county compared to other places. Insurance in some cases will not pay enough to cover
feed & fertilizer much less fuel and labor. Cattle prices are good, but very little hay was produced. We
are still trying to help ranchers keep their good cattle. Some farmers are cutting milo & corn and rolling
it up for hay. But nitroe poison is very common. Bailing a lot of it is worthless. Wheat crops are a total
loss. Very bad year in this part of the county.
,.. Land may not have bottomed out yet.
Region 9 - Coastal Texas
,.. Row crop land prices have dropped some in the past few months, and buyer interest seems to have
lagged. Crop conditions have been spotty with some very poor production. Each applicant will vary this
fall, but the ability to finance some farming operations may boil down to what is provided to farmers in
the area of disaster funds.
Region 10 - South Texas
,.. We have had a severe drought in our area. Maize, corn is harvesting at 1/3 of what it could have been
with necessary rain. Cotton crops will be our best income producing crop. Cattlemen are experiencing
high cost in feeding their cattle. Most maize fields were put into round bales which will bring cost of this
type of feed down some.
... Continued dry weather has hampered 1989 production and will keep loan demand low until this weather
pattern improves with moisture.
,.. Land values continue stable on cropland, however, ranchland values have continued to decline particularly
with large tracts of land. Loan demand should be on the rise since the 1989 spring crop is harvested.
Farmers will be coming in to set up their 1990 Spring crop lines of credit. Also interest rates have
dropped which is very encouraging and a positive help to the farmers as well as the banks. Our area has
been receiving rains lately however, the rain was too late this year. Extreme drought conditions in South
Texas has made 1989 another low production year.

Region 11 - Trans-Pecos and Edwards Plateau
... Range and dryland crops are in bad shape due to the lack of rainfall .
.,.. We are extremely dry in the Winter Garden area. Cattle, sheep and goat prices remain good which help
our ranchers when they have to sell down. Cabbage, onion and cantaloupe prices are good. Dry land
farmers didn't make any grain and cotton is hurting. Irrigated crops are doing well. Pima cotton
production looking good. Most pima contracted at $1.12 to $1.14/lb. Need rain soon!
... Need rain, higher cattle prices, and more shade.
Region 12 - New Mexico
.,.. Great year for onions. The heavy rains we experienced during harvest last year are not coming this year.
Onion market is very high and farmers are very optimistic. Ranchland is very dry.
... Extremely dry conditions continue. Some rains have helped but they have been spotty. There has been
some hail damage to crops in addition to drought and winter kill on wheat. Cattle prices remain good.
Feeders still marginal on profit. NE corner of the state reported to have had rains and be in an excellent
grass situation. Milo planted and milo (ghost crop) doing only fair to date. Farmers are preparing for
wheat planting next month and will try for another year .
.,.. We haven't had any rain; the rangeland is looking really bad and feed is getting scarce. The cotton and
alfalfa farmers are doing really well; prices are high and there has been no damage to crops.
... Severe drought conditions in the area could affect the amount of operating loans needed and cause carryover credit. This will also have an affect on rangeland values. Cattle prices remain good. Fall calves
could be light if it doesn't rain in July. No fall calves have been contracted for sale yet.
Region 13 - Louisiana
... Heavy rains and poor planting conditions leave much doubt as to this year's crop. Soybeans, normally
planted behind wheat, will probably not be planted this year. Cotton and soybeans are beginning to show
damage. Large tracts of prime farm land is still under water with more rain expected.
... Heavy rainfall in the area. Corn looks excellent but wheat & oats harvest was disappointing due to lower
than average yields & poor grades. Cotton & soybeans have yellow tint due to excessive rainfall, but have
excellent yield potential. Rice presently looks good but we are concerned about potential diseases .
.,.. Local heavy rains have hurt soybean farmers in our area. About 25% of farmers hoping to breakeven can
only turn a profit with above average price and yields. Local FmHA office and area banks are being
swamped by farmers who need additional funds to operate with.

'

•

1
2
3
4
5
6
7
8
9
10
11
12
13

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
New Mexico
Louisiana

ELEVENTH FEDERAL RESERVE DISTRICT

'