Third quarter financials continue to reflect the bleak picture in farm country this year. Joe Mahon, Regional Outreach Director at the Federal Reserve Bank of Minneapolis, said their third quarter survey of agricultural bankers in the Fed’s Ninth District show cash flow is down.

“Lenders told us that farm incomes decreased relative to a year ago. Capital expenditures, that is purchases of equipment and buildings and other capital by farm operations, was also down quite a bit, and this is sort of a recent change from trend. Household spending was flat overall, even over the last few years, as we’ve seen falling incomes and falling capital. Falling capital spending, the consumer spending by farm households, has continued to stay pretty strong. That’s a change in the results of the survey.”

Mahon notes farm loans rates are moving up.

“Obviously, given the tighter cash picture, higher loan demand, and the rates of repayment on loans are down. I mentioned earlier that we’re seeing continued growth in land values. We do ask the lenders about the price of an acre of land in their region, and we make a year-over-year comparison. Land values are up. Cash rents on an acre of land are down, and the outlook for the rest of this year is rather negative.”