Fed reports highlights farm struggles

When a recent gathering of Southern Illinois farmers revealed that 7 out of 10 of them had serious concerns about the viability of their farming operation over the next three years, one might think they were being overly dramatic.  But late last week, three of the Federal Reserve Banks that serve the Corn Belt confirmed the seriousness of the financial struggle farmers are having. Federal Reserve Bank economists frequently survey the commercial lenders in their respective districts about the agricultural economy, asking questions about land values and credit conditions with answers uploaded into the Fed’s Open Market Committee which sets interest rates.  And whether or not the rate will be raised at the next FOMC meeting as once expected, farmers across the Midwest will have a greater interest burden to bear. In the Chicago Fed region, which includes all of Iowa, and parts of Illinois, Wisconsin, Indiana and Michigan, the bankers reported, “agricultural credit conditions were more negative than those of a year ago. In addition to repayment rates for non-real-estate farm loans being down in the third quarter of 2016 relative to the same quarter last year, loan renewals and extensions were up.”