The farm economy in Nebraska and surrounding states is continuing to decline, but the pace of decline is slowing.
That's the conclusion of a report released Thursday by the Federal Reserve Bank of Kansas City.
The report, written by Assistant Vice President and Omaha Branch Executive Nathan Kauffman along with Assistant Economist Matt Clark, says that while the agricultural downturn continued in the second quarter in the Fed's Tenth District, things appear to be stabilizing somewhat.
The report noted that credit conditions, including loan repayment rates, declined less in the second quarter than in previous quarters.
The decline in farm income also appears to be slowing. According to the report, 57 percent of ag bankers interviewed reported lower farm income in the second quarter, the lowest percentage in two years. Looking forward, less than half of bankers expected income to continue to decline in the third quarter, the report said.
Land values continue to decline at about the same rate as in previous quarters, the report said. Non-irrigated land fell 5 percent across the Tenth District compared with a year ago, while irrigated land fell 7 percent and ranchland dropped 4 percent.
Conditions were worse in Nebraska, however. According to the report, both ranchland and irrigated cropland were down 8 percent year-over-year, which was the biggest drop of any state in the district. Irrigated land values fell 7 percent.
The report noted that crop prices have stabilized this year after several years of declines, and cattle prices have increased. Because of that, "the pace of declines in the farm sector also may be less pronounced than in recent years," the report said.