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Third Quarter 2017

DALLASFED

Agricultural
Survey

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

Survey
Highlights

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 third-quarter
survey noted moisture conditions are
generally good, but flooding in a couple

Availability of funds*

yields are expected to be above average. Re-

Rate of loan repayment

spondents noted that livestock prices generally

Loan renewals or extensions

remained good.
Demand for agricultural loans overall decreased for the eighth consecutive quarter. Loan
renewals and extensions continued to increase.

all other loan categories’ volumes fell year-over-

–10

–30

values increased (Figure 2). According to bank-

–40

third quarter 2016, nominal district cropland
values increased year over year while ranchland
values held steady (Table 1).

–11.1

9.6

69.7

20.7

7.0

8.3

11.5

85.3

3.2

–0.8

–3.9

5.4

85.3

9.3

3.9

7.0

10.1

86.8

3.1

Availability of funds*

Loan renewals
or extensions

–20

decreased this quarter, while irrigated cropland
ers who responded in both this quarter and

–4.6

loans. The volume of operating loans increased;

District real ranchland and dryland values

qLess

after stabilizing last quarter. Overall, the volume

year this quarter (Figure 1).

Same

Index

year ago, as was the volume of farm real estate

pGreater

The rate of loan repayment declined slightly
of non-real-estate farm loans was lower than a

2017:Q3

Demand for loans*

regions caused losses of crops and cattle. Crop

Percent reporting, Q3

2017:Q2

–50

Rate of loan repayment

Demand for loans*

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

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

The anticipated trend in the farmland val-

Index

Percent reporting, Q3

2017:Q2

2017:Q3

pGreater

Same

qLess

secutive quarter, suggesting respondents expect

Non-real-estate farm loans

–7.8

–9.3

8.5

73.6

17.8

farmland values to trend up in the upcoming

Feeder cattle loans*

–9.2

–8.7

7.0

77.3

15.7

Dairy loans*

–9.1

–7.3

7.0

78.7

14.3

Crop storage loans*

–3.3

–8.5

3.3

84.9

11.8

4.8

3.8

15.4

73.1

11.5

Farm machinery loans*

–17.8

–13.1

6.6

73.7

19.7

Farm real estate loans*

–8.9

–10.3

8.6

72.5

18.9

ues index remained positive for a second con-

months. The credit standards index indicated
continued tightening of standards on net
(Figure 4).
What’s New This Quarter:
This quarter’s survey data include seasonal factor
revisions. The Federal Reserve Bank of Dallas
revises the historical data for the Agricultural Survey
after calculating new seasonal adjustment factors.
Seasonal revisions result in slight changes in the
seasonally adjusted series.

Operating loans

*Seasonally adjusted.
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

XXThe recent rains we experienced in August

helped our farmers cut back their expenses. We
need some good heat units for the cotton we have
as the rain showers were good but did cool us off
tremendously.

XXLate summer rainfall has significantly improved

our moisture conditions, improving anticipated fall
crop yields with lower irrigation expense. Soil moisture is excellent for planting wheat. Grain sorghum
and cotton yields are still very dependent upon a
normal to later than normal freeze date.

Region 2 • Southern High Plains

XXWe need rain and a late freeze. Most crops are

Region 5 • Cross Timbers

XXIt has turned dry in recent weeks, but overall

has been a fairly good-weather year in most of our
area. Good hay production has led to a big surplus
after a sizeable amount was carried over from last
year. Local pecan growers should have a big crop
this year with what looks to be good prices at this
point. Dairies have a good supply of roughage at
low cost and fair milk prices. Beef cattle prices
seem to have stabilized, and grazing conditions
have been good.

Region 6 • North Central Texas

XXLoan demand has weakened.
XXCentral Texas is experiencing so much growth

looking good, and we expect production to be
above average for 2017. Ranchland is good; cotton and peanuts are holding up well but moisture
would help.

that land prices will continue to escalate, shrinking
the tillable acres.

XXIrrigated cotton crops are excellent, while dry-

XXThe cattle market is better, and summer rains

land cotton crops are very good but late and catching up with heat and open weather. Grain crops are
good but there is some insect pressure.

XXWe have had the second largest rainfall totals for
the summer months in 2017. Although most crops
were later going in, they have made good progress,
and for producers who have a crop, the prospects
look good. We still need a good, dry fall. There are
still some areas where the crops didn’t make it,
and those will be problem areas.

XXIt was difficult to get crops started in our area
due to hail, wind and drought, which caused expenses to run somewhat higher than normal.

XXCrops in West Texas are looking very promising.
Very beneficial rainfall has been received throughout much of the month of August, which is helping
finish things up. Most of the cotton is later than
desired, though, so we really need a warm, open
September and October. It will take every bushel
and pound to clear expenses.

Region 3 • Northern Low Plains

XXIrrigated cotton looks good. Fifty percent of

dryland cotton has already been destroyed. The
remaining dryland will need a warm fall to finish.
Pasture conditions are dry to average. Wheat
ground is being prepared but it is too dry to plant.
Our area needs a rain.

XXRain three weeks ago ruined a lot of hay, but
hopefully it hasn’t ruined the soybeans.
have been timely. Hay is plentiful.

XXOur area received unusual rainfall amounts in

July and August. Wheat crop yields were fairly normal. However, corn and soybean yields are proving
to be well above normal. Cotton yields are projected
to be well above normal as well. These yields will
be a plus for the farm economy all around our area.

Region 8 • Central Texas

XXRural land prices have softened in the past few

months, especially for the larger tracts and the less
desirable land tracts—those with no improvements
or recreational use. More qualified borrowers are
starting to become more rate sensitive and looking
for the best rates available before making credit
decisions. Demand for feeder loans has been
steady, with no big increases noted at this time—
we are waiting on the calf market to stabilize and
hedging to become a viable option again. Recent
rains will help area farmers and ranchers for the
next few months, as fall planting will start soon.

XXFlooding on the Colorado caused loss of cattle

for some. Most had moved livestock to higher
ground. On the beneficial side, there will be a lot of
grass going into fall.

12
N E W

M E X I C O

Regions of the Eleventh
Federal Reserve District

Region 9 • Coastal Texas

XXReal estate values are driven by recreational
users.

XXOverall current conditions in the area vary from

being dry in the western areas to adequate moisture
along the eastern fringe. The majority of the damage [from Hurricane Harvey] was to the northern
counties that had sizable amounts of cotton damages that had been harvested or in the field. Several
ag-business facilities also had damages. Cattle
feeding has increased in the last 60 to 90 days with
the dry time from June to August. The sale of cattle
has recently ramped up. Prices have held steady.
Current sales have included a higher number of
cows, with some larger ranches starting to use their
reserve pastures. Hay purchases have increased.
Inputs have also remained fairly stable, with
margins being at lower levels when compared to
2014–16. All grain and corn have been harvested,
with yields being at average levels compared to the
last two years. The crops were marketed this year
in a different fashion with an ample amount going
straight to the Port, where producers were able to
obtain a better basis than at the local co-ops. Cotton
was well over 90 percent harvested, with the northern counties having some still in the fields. Prices
lost some core value prior to Hurricane Harvey and
gained on price with the damage to cotton further
up the coast. At this time, the prices and quality of
the cotton are still good with overall yield above
average. The crop will be ginned later than average
due to the larger amount of cotton produced. Most
producers are looking at keeping a traditional mix
of plantings for the 2018 crop year and awaiting
the overall production on various areas across the
country.

XXHurricane Harvey and floodwaters from the

Brazos and Colorado Rivers damaged a significant
portion of the cotton acreage. The range of damage
was lower yields/quality degrades to complete
losses. All other crops were harvested prior to the
storm.

XXThe few agriculture loans that we had have recently
been sold for non-agricultural use.
2

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

Table 1

Rural Real Estate Values—Third Quarter 2017

Banks1

Average
value2

Percent change
in value from
previous year3

Cropland—Dryland

District*

L O U I S I A N A

5
6

T E X A S

101

1,824

3.1

Texas*
1 Northern High Plains

88
10

1,841
928

2.9
4.3

2 Southern High Plains

759

10.1

3 Northern Low Plains*

885

4.9

4 Southern Low Plains*

1,059

–5.7

5 Cross Timbers

1,683

–6.1

2,697

4.3

7 East Texas*

2,804

6.8

8 Central Texas

3,600

–9.0

9 Coastal Texas

2,120

12.2

6 North Central Texas

10 South Texas

n.a.

11 Trans-Pecos and Edwards Plateau

2,083

11.9

12 Southern New Mexico

4
9

363
2,689

5.7
7.2

13 Northern Louisiana

Region 11 • Trans-Pecos and
Edwards Plateau

Cropland—Irrigated
District*

XXPasture conditions range from fair to excellent

depending on location. The end of the growing
season is near, so additional rainfall would greatly
improve grass quality going into winter.

XXLivestock prices are steady. Some areas are in

good shape with ample rains going into fall, but
other areas are extremely dry. Land sales for larger
tracts are slow.

XXLivestock prices rebounded somewhat from

their lows earlier in the year. Range conditions are
still above average even though rain has been very
spotty. Some areas received excellent rainfall, and
hay crops have been better this year. Feed prices
remain high, and the predator issue is still high
on sheep and goat operators’ lists of obstacles to
overcome. As is always the case, rainfall—or lack
thereof—will dictate how 2017 winds up on the
Edwards Plateau.

XXPasture grass coverage and volume is as good as

it’s ever been, though we need some moisture. Livestock is mostly in very good condition. Predators are
still a real problem, particularly in sheep and goats.
Hunting revenues remain a key revenue source for
most ranching operations and leasing appears to be
stable. Livestock prices remain good overall, though
there was some recent weakness in sheep and goat
markets.

Region 12 • Southern New Mexico

XXBetter than average rainfall in late summer has

been great for cattle and dryland farm operations.

XXThe monsoon was slow to start and pretty

spotty, but has finally kicked in and most areas
have had good moisture. Feed commodities remain
depressed, primarily driven by dairy producers. The
vertical integration of dairies to grow substantial
amounts of their own feed input has placed significant stress on non-dairy, forage crop producers.

2,548

5.0

Texas*
1 Northern High Plains

2,222

2.9

2,100

2.7

2 Southern High Plains

1,590

2.4

3 Northern Low Plains*

2,218

20.2

4 Southern Low Plains

1,407

–1.6

5 Cross Timbers

3,383

0.0

6 North Central Texas

2,750

2.4

7 East Texas

2,800

16.7

8 Central Texas

4,114

0.7

9 Coastal Texas

2,275

7.8

n.a.

11 Trans-Pecos and Edwards Plateau

3,200

0.0

12 Southern New Mexico

4,100

5.6

13 Northern Louisiana

4,206

18.3

119
106

1,677
2,000

–0.1
0.5

10 South Texas

Ranchland
District*
Texas*
1 Northern High Plains

720

1.8

2 Southern High Plains

678

0.0

3 Northern Low Plains

943

7.4

4 Southern Low Plains*

1,092

0.0

5 Cross Timbers
6 North Central Texas

8
16

2,025
2,791

0.0
4.7

7 East Texas

2,754

1.6

8 Central Texas

4,736

–1.9

9 Coastal Texas

2,388

–1.3

2,400

1.9

1,669

–0.8

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

280

–12.0

13 Northern Louisiana

2,025

–4.8

*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 • Third Quarter 2017 • Federal Reserve Bank of Dallas

Figure 3

Figure 2

Real Cash Rents

Real Land Values
2016 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

2016 dollars per acre per year

Irrigated

120

Dryland

100

40
Ranchland

Dryland

60
20

Ranchland

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

2016 dollars per acre per year
140

Irrigated

2007 2008 2009 2010 2011 2012 2013 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.

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, Q3

2017:Q2

2017:Q3

pUp

Stable

qDown

7.0

5.3

10.0

85.3

4.7

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

2017:Q2

2017:Q3

pTightened

Same

qLoosened

10.9

8.5

10.1

88.4

1.6

Index
50

2016:Q3

5.98

6.07

5.96

5.72

5.98

6.11

6.03

5.72

2017:Q1

6.19

6.24

6.21

5.95

6.05

6.17

6.05

5.89

6.17

6.30

6.24

5.93

40
Credit standards †

0
Anticipated trend
in farmland values*

–20

Variable (average rate, percent)

–10

2016:Q3

5.60

5.63

5.64

5.36

5.65

5.63

5.29

2017:Q1

5.73

5.74

5.80

5.47

5.75

5.81

5.74

5.47

5.92

5.96

5.95

5.64

–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 • Third Quarter 2017 • Federal Reserve Bank of Dallas

Special Report
Commodities
modities, peanuts jumped in the rankings, as did poultry.
Sorghum decreased in importance over the past two years,
according to survey responses.
Bankers were asked to highlight any changes in the types
of agricultural commodities produced in their region. Most
notable was a shift back to cotton from sorghum and corn.
However, there were scattered reports of more corn acres,
especially for insurance coverage. Changes in crops grown
over the past two years were largely due to commodity
prices and also due to aphids.
The survey also asked how recent movements in commodity prices have impacted agricultural and credit conditions, including the types of commodities grown. A number
of bankers reported that lower prices for some commodities had caused credit conditions in their region to deteriorate. Some respondents said they are tightening credit
conditions, and a couple noted producers will likely have
carry-over debt. A few bankers expressed concern that farm
incomes will be lower and producers’ cash flows will be
tighter. A couple respondents noted that there is some additional hedging and/or contracting being done by producers.
The following pages display a graphical representation,
by region, of the data gathered in this commodities survey,
along with the comments received.

As part of the third-quarter Agricultural Survey, Eleventh
District bankers were asked to list agricultural commodities produced in their lending region. Cattle was again the
most widespread response, followed by hay, with more
than three-fourths of respondents reporting production of
these commodities in their region. However, reports on hay
production were less widespread than in 2015—the last time
bankers reported on the commodities produced in their
region. Corn and cotton production were reported by equal
shares, almost 70 percent, of respondents, and while fewer
bankers indicated that wheat is produced in their region than
in 2015, still more than half noted some wheat production.
The prevalence of sorghum production declined slightly
from 2015, with just under half of respondents noting some
production of sorghum in their region, down from over 60
percent in 2015.
The survey asked Eleventh District bankers to rank the
top three commodities produced in their lending region. The
top five commodities in 2015 remained in the top five again
in 2017; however, the rankings changed. Cattle continued to
maintain the top position. Cotton and corn traded places,
with cotton coming in second. Rounding out the top five were
hay and wheat, which also exchanged positions in the rankings. Looking to the importance of production of other com-

Eleventh District Agricultural Commodities, 2017

(Percent of respondents reporting production of commodities in their area)
Percent

100
90
80
70
60
50
40
30
20
10

he
r
Ot

uit
Fr

oe
s
tat

les
tab

Ve
ge

rs
er
Nu

Ho
g

s
Eg
g

Ri
ce

ult
r

s
Po

nu
t

Pe
a

ow
e

yb
ea
n

Su
nfl

Oa
ts

oa
ts

iry

or
g

Sh
ee

es
Ho
rs

hu
m

he
at

So
rg

Co
tto

Co
rn

y
Ha

Ca
ttl

NOTE: “Other” includes sesame and timber.

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

Commodities

SPECIAL REPORT

Agricultural Commodity Ranking in the Eleventh District
(As reported by responding banks, third quarter 2017 and 2015)

Ranked No. 1

Ranked No. 2

Ranked No. 3

All Regions

Region 1—Northern High Plains

Percent

100
90
80
70
60
50
40
30
20
10
0

’17

ats

’15
Cattle

’17
’15
Cotton

’17

’15
Corn

’17
’15
Wheat

’17
’15
Sorghum

’17
’15
Wheat

’17

ult
Sh

ea
yb

hu
So

an
Pe

s
ut

at
he

rn
Co

n
tto
Co

ttl

’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15 ’17 ’15

Region 2—Southern High Plains

Region 3—Northern Low Plains

Percent

100
90
80
70
60
50
40
30
20
10
0

’17

’15
Cotton

’17
’15
Cattle

’17

’15
Corn

’17
’15
Peanuts

’17
’15
Sorghum

’17

’15
Cattle

’17
’15
Cotton

Region 2

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

’17
’15
Peanuts

Hay

’15

Region 4—Southern Low Plains

Region 5—Cross Timbers

Percent

100
90
80
70
60
50
40
30
20
10
0

’17

Cattle

’15

’17

’15
Wheat

’17

’15
Cotton

’17

Hay

’15

’17

’15
Cattle

’17

Hay

’15

’17
’15
Wheat

’17
’15
Cotton

’17

’15

’17
’15
Dairy

’17
’15
Corn

’17
’15
Sorghum

’17
’15
Corn

’17
’15
Wheat

Dairy

’15

NOTE: Region 4 only ranked four commodities.

Region 6—North Central Texas

Region 7—East Texas

Percent

100
90
80
70
60
50
40
30
20
10
0

’17
’15
Cattle

’17
’15
Corn

’17
’15
Wheat

’17
’15
Cotton

’17

Hay

’15

’17
’15
Cattle

’17
’15
Poultry

Region 8—Central Texas

Region 9—Coastal Texas

Percent

100
90
80
70
60
50
40
30
20
10
0

’17
’15
Cattle

’17
’15
Hay

’17

Corn

’15

’17
’15
Cotton

’17
’15
Rice

’17
’15
Cattle

’17
’15
Cotton

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

Hay

Commodities

SPECIAL REPORT

Agricultural Commodity Ranking in the Eleventh District (continued)
(As reported by responding banks, third quarter 2017 and 2015)

Ranked No. 1

Ranked No. 2

Ranked No. 3

Region 10—South Texas

Region 11—Trans-Pecos and Edwards Plateau

Percent

100
90
80
70
60
50
40
30
20
10
0

’17
’15
Cattle

’17
’15
Cotton

’17
’15
Corn

’17
’15
Hay

’17
’15
Peanuts

’17
’15
Cattle

’17
’15
Sheep or
goats

’17

Hay

’15

Region 12—Southern New Mexico

Region 13—Northern Louisiana

Percent

100
90
80
70
60
50
40
30
20
10
0

’17

’15
Cattle

’17

Hay

’15

’17

’15
Dairy

’17

’15
Cotton

’17

’15
Corn

’17
’15
Corn

’17
’15
Soybeans

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

’17
’15
Cotton

’17

’15
Cattle

’17
’15
Wheat

’17

’15
Rice

QUESTION: Over the past two years, have there been changes in
the types of agricultural commodities grown in your region?
If so, please explain.
Region 1 • Northern High Plains

Region 6 • North Central Texas

XXThere has been more cotton and less milo.
XXWe had quite a few farmers plant cotton, due to

XXThere has not been as much corn and wheat.
XXThere has been an increase of commodities

prices.

XXA switch from grain sorghum to cotton has been
made due to the sugarcane aphid.

XXThere was an increase in cotton acres.
XXThere has been more cotton with less sorghum
and corn.

Region 2 • Southern High Plains

XXMost everyone has grown more cotton due to
low commodity prices for grains.

XXThere is a definite switch away from grain

(mostly corn) to cotton. This is in response to
downward trending grain prices and upward trending cotton prices. Cotton also needs less irrigation.

Region 3 • Northern Low Plains

XXThere has been more cotton, and cattle herds
increased.

XXPeanut production has declined significantly due
to minimum profit margins; wheat production has
declined due to negative profits, with former wheat
producers searching for alternative crops.

XXAs of this year, we have seen producers move

more acres to cotton with a few planting dryland
corn.

Region 4 • Southern Low Plains

XXWith cotton not being a covered commodity,

many farmers are looking to other crops such as
peanuts, wheat or triticale.

XXOur region is predominately a cotton-growing

region with other crops not really being a vital option unless under irrigation. We really do not have
a better option even with low cotton prices and no
government support.

other than wheat. This is spread between sorghum,
corn and soybeans.

XXRain three weeks ago ruined a lot of hay, but
hopefully it hasn’t ruined the soybeans.

XXThere has been less sorghum and more corn
and cotton—mostly due to aphids.

XXCotton has made a comeback.
Region 7 • East Texas

XXThere has been less dairy.
Region 8 • Central Texas

XXWe have seen several closures of table grape

operations and wineries in the area, with a slight
expansion of a few olive farms.

XXThere has been more corn—both dryland and

irrigated—because we have a growing demand for
corn, and it has had a better price than wheat.

XXThere has been continued movement from wool
sheep to hair sheep.

Region 12 • Southern New Mexico

XXMore corn is being grown in the irrigated areas.
Region 13 • Northern Louisiana

XX2017 shows an increase in cotton acreage due
to grain prices.

XXA sizable increase in the amount of cotton acreage came from soybean and corn acres normally
planted.

XXThere were more acres of cotton planted this

year than in the past several years. Corn fell into
second place with soybean acres getting the most
planted acres in the area.

XXThere has been more corn, less cotton.
Region 9 • Coastal Texas

XXCotton increased due to low prices of sorghum.
XXThere has been no shift in the crops grown in
the area. Rotation is normal, with some shift in
acres based on prices and profitability.

XXCorn has increased, replacing non-program

cotton acres, primarily to take advantage of the
safety net provided by Price Loss Coverage and
Agricultural Risk Coverage provisions included in
the farm bill.

Region 11 • Trans-Pecos and
Edwards Plateau

XXWool sheep are being sold and replaced with

hair sheep. Meat goats are still more desirable
than Angora goats, even though mohair prices are
healthy. Predators are a huge concern as coyotes
and hogs continue to expand their territory. Many
sheep and goat ranchers are replacing herds with
just cattle due to predation.

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

SPECIAL REPORT

Commodities and Drought
Commodities

QUESTION: How have recent movements in commodity prices impacted
agricultural and credit conditions in your region, including the types
of agricultural commodities grown? Please explain.

Region 1 • Northern High Plains

XXCommodity prices affected some of our farmers
in being able to pay back their notes, but we have
worked through those issues.

XXMore favorable economic conditions for cotton
have encouraged increased cotton acreage.

Region 5 • Cross Timbers

XXWe are now farming below breakeven.
XXThe decline in cattle prices has hampered

profitability; however, they are still above historical
norms.

Region 6 • North Central Texas

XXThe decline in corn prices has moved more
acres to cotton.

XXCash flows have been tighter; there has been a
shift from corn and sorghum to cotton.

XXThere are more cotton acres this year as corn
prices are not favorable.

XXWeak prices for wheat are causing people to

Region 2 • Southern High Plains

XXCotton prices have ranged from $0.55 to $0.70

per pound over the last two cycles. Average yields
at $0.55/lb. are not sufficient for positive earnings, and average yields at $0.70/lb. are at or near
breakeven for most dryland producers. In short,
with rising input costs, prices need to increase to at
least $0.75/lb. for producers to make net income.

XXProducers are marketing better, and hedging or

consider other crops.

XXThere has been more corn storage on farms in

the hope of higher prices in the future. Cotton acres
have increased.

XXIncome is up slightly due to higher cattle prices.
XXCorn and wheat prices were low, but yields were
good.

Region 7 • East Texas

contracting. Crop insurance has also been utilized
better.

XXThere has been increased profit for cattle ranch-

XXLower corn and milo prices have reduced the

XXThe price of cattle seems to have moved down

number of acres planted.

ers.

after moving up slightly earlier this year.

Region 3 • Northern Low Plains

XXDue to input costs and lower commodity prices,
cotton acres have increased.

XXProducers are limited to alternative crops due

XXAll producers have experienced less net income
either due to lower prices received for their commodity or increased expenses.

Region 8 • Central Texas

to weather patterns, the growing season and soil
types.

XXPricing has forced more farmers and cattle rais-

XXLower commodity prices make positive cash

XXIt seems that some cattle operations are not ex-

flow projections harder to obtain. Our area is not
suited to a big variety of commodities because of
soil type, water availability and climate.

XXWith the steady prices of cotton, many producers
are moving acres out of wheat and into cotton.

Region 4 • Southern Low Plains

ers to hedge a larger percentage.

panding until we get some price stabilization, with
some hay and corn growers anticipating cutting
back on acreage as well.

Region 9 • Coastal Texas

XXLower grain prices have impacted crop mix

XXRecent price movements have been discouraging and frustrating. Although the area has some
excellent irrigated production potential at this
time, we anticipate the majority of producers will
once again have some operating and term debt
carryover.

Region 11 • Trans-Pecos and
Edwards Plateau

XXDecreasing cotton prices and increasing farm
expenses have tightened credit in our area.

XXCattle and sheep and goat prices have a direct

impact on the credit conditions in our region, and
the recent slump (over the past couple of years)
has impacted cattle income on all of our producers. However, in the past six months or so, cattle
prices strengthened somewhat and returned to a
level which works more favorably for all producers
in our area. Sheep and goat prices have stayed
pretty strong. Good early-year rains produced a
good hay crop in our area, and hay is still fairly
plentiful, compared to the past three or four years
which saw a shortage of affordable hay (or any hay,
for that matter) available. Feed prices, as a general
rule, have stayed at high levels continuously and
we don’t see any relief to speak of forthcoming in
that area.

XXCheaper prices have hurt our farmers.
Region 12 • Southern New Mexico

XXWe have seen some shift from milo to corn on
irrigated ground.

XXMost commodities in this area are contracted;
therefore, prices have not been impacted significantly.

Region 13 • Northern Louisiana

XXIn 2016–17, cotton increased, corn decreased,

grain sorghum decreased, and soybeans decreased. Since 2015, wheat acreage has decreased
due to price.

XXLower wheat prices have caused a diversifica-

XXThe changes in commodity prices have led to

tion in plants, resulting in more corn being planted.

which in turn impacts input cost. More cotton has
been grown which increased the overall cost per
acre to the grower.

XXCommodity prices staying low and input costs

XXCommodity prices have impacted some ag and

XXLower grain prices have been the basic reason

XXCotton and cattle prices have been lower and

XXCredit conditions have deteriorated in general

continuing to be high continues to keep a strain on
cash flow.
have lowered income for the area.

credit conditions in the region. Some credits did not
do well with the excessive rains in some areas.
for row crop producers due to weather issues and
commodity prices. Cotton acres have increased due
to the commodity price.

few acres of corn and more acres of cotton being
planted.
why there are more cotton acres planted.

XXCommodity prices have been a major factor in
the number of acres of planted crops.

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

Special Report
Oil and Gas Prices
As part of this quarter’s commodity survey, respondents were
asked how the change in oil and gas prices impacted the demand
for agricultural credit in their region. Responses on the impact to
credit demand varied by region, while a number of respondents
commented that lower oil prices reduced input costs for producers. Many bankers noted they have seen slight to no impact on the

demand for credit from the change in energy prices. Some did
note, though, that producers in their region are able to supplement their income from oilfield-related activity, and that has,
in turn, lessened demand for credit. Others indicated that
lower oil prices led to tighter operating budgets for producers.

QUESTION: Over the past two years, how has the change in oil and gas prices
impacted the demand for agricultural credit in your region?
Region 1 • Northern High Plains

Region 6 • North Central Texas

XXThere has been an adverse effect on cash flow

XXThere has been very little impact, although as

and spending.

XXIt has not changed demand for credit but has
tightened operating budgets.

prices for commodities come down, input prices do
not follow suit.

XXPrices have actually been down until Hurricane

Region 2 • Southern High Plains

Harvey; now we expect a substantial impact could
be possible due to Hurricane Harvey’s impact.

XXThe drop in oil prices has had a negative impact

XXNo, however Hurricane Harvey has caused some

on grain. However, fuel and fertilizer input costs
have been down as well.

XXOur farming customers have been very suc-

cessful selling water and caliche to the oil patch.
This cash flow has offset much of their need for
operating credit, and we have witnessed softer loan
demand as a consequence.

Region 3 • Northern Low Plains

short-term problems with extra costs and shortages (perceived or factual). Long-term problems
are unknown at this time.

XXI don’t believe that oil prices impact ag credit as

much as oil prices impact the prices paid for real
estate and other purchases. Land prices usually go
up in our area when oil is high.

XXIt has lowered input costs and lessened operating cost.

XXOperating lines have been increased and used

more because of the decrease in oil and gas prices.

XXOil production does impact the direct credit

needs in our area, so in theory, lower petroleum
prices should lower fertilizer, chemical and fuel
costs, but this does not always correlate directly.

Region 4 • Southern Low Plains

XXIt has been one of the few small positive items,
with farm fuel prices lower and fertilizer costs
down.

Region 5 • Cross Timbers

XXProbably the most significant impact would be to
reduce demand for ag real estate purchases.

Region 7 • East Texas

Region 11 • Trans-Pecos and
Edwards Plateau

XXIt affects all areas of our economy and causes
ranchers to make more profit-based decisions.

XXThere has been little impact in our immediate

area, as we have few customers with production in
our county. Those customers who have production
elsewhere have typically been non-borrowing.

XXNot really, although a lot of ranchers’ budgets

are very tight due to decreased oil and gas income.

XXYes. The “weekend farmer or rancher” is not

applying as often for credit to buy property and/or
livestock at this time.

Region 12 • Southern New Mexico

XXOil and gas are not seen in our region, so therefore there has been no impact on our ag credits.

XXThis has improved profit, which has in turn
encouraged growth, increasing demand.

Region 8 • Central Texas

XXThe additional income to local ranchers has

allowed them to pay off much of their debt and
allowed them to begin saving substantial funds
toward retirement.

Region 9 • Coastal Texas

XXThere has been no major shift in the demand for

ag credit in the region with the changing oil and
gas prices. It has changed inputs, and some pricing
is affected by competitive synthetic fibers that are
competition for cotton.

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

DALLASFED

Agricultural Survey

is compiled from a survey of Eleventh District agricultural bankers, and data have been seasonally adjusted as necessary. Data were collected September 5–13, and 133 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 • Third Quarter 2017 • Federal
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Quarter 2017 • Federal Reserve Bank of Dallas

Full text of Agricultural Survey : Third Quarter 2017

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