U.S. Farm Economy Slumps into the Fourth Quarter

The U.S. farm economy weakened further in the third quarter despite an upward revision to farm income projections. Following a brief rebound in crop prices in the second quarter, profit margins for crop producers deteriorated in August and September. Profit margins also remained poor in the cattle and dairy sectors. Agricultural credit conditions have weakened further as loan repayment problems have picked up steadily, and bankers throughout the Tenth Federal Reserve District have expressed increasing concerns about the softening farm economy spilling over to Main Street business activity in rural areas.