Agricultural credit conditions in the Tenth District of the Federal Reserve continued to strengthen in the first quarter of 2021. After a sharp rebound at the end of 2020, conditions in the broad agricultural economy continued to improve alongside additional increases in crop prices.
Stronger profit potential for farm borrowers supported a second consecutive quarter of significant increases in farm income, loan repayment rates and farmland values, according to the Kansas City Federal Reserve Bank.
Overall, farm borrowers in the district were in a better financial position than at the beginning of 2020, but the pace of improvement was notably slower for livestock producers and for producers in areas affected by severe drought.
Cattle prices remained below pre-pandemic levels in the first quarter, and the scope and severity of drought was a major concern in western states. The Tenth District includes portions of Missouri and New Mexico, along with Colorado, Kansas, Nebraska, Oklahoma and Wyoming.