Rates on loans used to finance current operating expenses increased nearly a full percent, from 3.7 percent in 2016 to 4.5 percent in the fourth quarter of 2017.
In addition, for the first time since 2014, more loans were issued with interest rates greater than 6 percent than loans with rates of 3 percent or less. Department of Agriculture, interest expenses on farm loans have risen steadily since 2013.
Dating services for ranchers Free webcam girlschat
The combination of larger loans and higher interest rates has, in general, increased farmers’ loan payments. In fact, in 2017 real estate interest expenses were expected to be the highest since 1989, and non-real estate interest expenses were 23 percent higher than in 2013.
Third Quarter Call Report Data According to commercial bank call report data, total farm debt outstanding increased slightly in the third quarter of 2017 from the previous year.
Farm loan delinquencies and nonperforming loans have remained low, but liquidity at agricultural banks has continued to tighten.
Average loan-to-deposit ratios continued to increase, albeit gradually, to 80 percent in the third quarter.
And while the farm economy has remained relatively steady, further increases in loan obligations could stretch borrowers’ repayment capacity in the coming year.
Fourth-Quarter Survey of Terms of Lending to Farmers Farm lending at commercial banks increased in the fourth quarter.In addition to low delinquency rates, the share of nonperforming loans also remained low at most agricultural banks.Although the percentage of banks with more than 5 percent of nonperforming loans edged up slightly, almost all agricultural banks had fewer than 5 percent of their total loans listed as nonperforming.After declining in 2016, the average size of farm operating loans grew in every quarter of 2017.In the fourth quarter of 2017, the average size of farm operating loans nearly matched the previous peak in the fourth quarter of 2015.Despite the gradual increase, the ratio is nearing the level of the most recent peak in 2009.