© BM FILE PHOTO: Boy scouts and grain buyers investigate wheat field in Leoni, Kansas By PJ Huffstutter CHICAGO (BM) – A sharp increase in the number of American farmers seeking operating loans and Equipment of at least $ 1 million fueled a surge in farm lending in the third quarter of 2018, as trade concerns added to economic strain in the agricultural sector, the Federal Reserve Bank of Kansas City said on Friday. . The increase in the amount of loans has also increased the share of agricultural loans at the big banks, adding potential risk to their lending portfolios, with lenders concerned about the long-term impact of the US-China trade war on their banks. farmer customers, said Nathan Kauffman. , senior economist of the bank. Loans are the latest sector of US agriculture to be affected by the trade dispute between the world’s two largest economies, which has reduced US soybean exports to China and pushed the prices of some agricultural commodities to their highest low level for ten years. Even as agricultural debt continues to rise, the performance of national agricultural banks generally remains strong, the bank said. “It’s a cautious environment right now,” Kauffman said in an interview. He noted that credit conditions in the agricultural sector have slowly deteriorated in recent years. The volume of non-real estate agricultural loans in the third quarter was more than 30% higher than the previous year, according to the bank. According to data from the National Farmer Lending Terms Survey, the increase in these types of loans – typically money used to finance a farm operation – represented the largest percentage increase for the period in 16 years. Bankers are seeing consolidation underway among struggling producers who are losing assets due to weak farm profits, Kauffman said. “The producers who take the assets are relatively large,” Kauffman said. “Fewer actors need more to fund these operations – and some of these actors could become more heavily indebted. Farm mortgage default rates through the second quarter of 2018, the latest data available, have increased in the United States. Defaults on farm home loans for this quarter were also higher than the rate of defaults on all bank loans for the first time in nearly 20 years, the bank said, citing data from the Federal Deposit Insurance Corporation. Disclaimer: Fusion Media would like to remind you that the data contained on this website is not necessarily accurate or real time. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges but rather by market makers, so prices may not be precise and may differ from the actual market price. , which means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media assumes no responsibility for any business losses that you may incur as a result of the use of this data. buy / sell data, quotes, charts and signals contained on this website. Be fully informed of the risks and costs associated with trading in the financial markets, it is one of the riskiest forms of investing possible.
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