Farm Economy Softens Further

A prolonged downturn in the agricultural economy continued in the second quarter of 2017, but recent data suggest conditions in the farm sector may be stabilizing. Although farm income and farm real estate values continued to decline, and credit conditions weakened further, the pace of deterioration has slowed. With the fall harvest approaching, agricultural lenders and borrowers remain concerned about prospects for the farm economy in the Federal Reserve’s Tenth District, particularly in regions with limited potential for high crop yields. However, bankers were generally less pessimistic about economic conditions in the farm sector in the second quarter than in each of the past two years.