Coronavirus Aid and High Crop Prices Doubled the Farmer Income

Local FED banks in Dallas, Chicago, Minneapolis, and Kansas City performed quarterly research on agriculture lending and farmer income.

Agricultural incomes have rebounded this summer from a sharp drop from the coronavirus last spring, according to Agri bankers from Plains and Mid-west who participated in a Federal Reserve survey. ” The higher agricultural commodity prices and the influx of governmental funds boosted agricultural finance in the third quarter and limited demand for agriculture lending and finance,” summarized two Kansas City Federal Reserve economists.

“Though agricultural incomes remained generally low, loan-repayment rates stabilized and agricultural property markets remained strong,” said economists Cowley and Kreitman. “In the third quarter, for the first time in seven years, bankers in all districts reported a decrease in the credit needs of farm borrowers.”

Federal regional banks in Dallas, Chicago, Minneapolis, and Kansas City directed a quarterly review of agricultural financing terms. Agri bankers have itemized an inflow of liquidity from Federal and local government COVID-19 funding programs. Since late spring, the USDA has provided more than $ 20 billion to farmers to help fight the coronavirus.

Farmers’ income from soybean and corn will be much high than expected, because of strong exporting demand and smaller yields, writes FAPRI director, Mr. Westhoff. “In August, we project the market value of US soybean and corn production in 2020 to be around $ 85 billion. The corresponding estimate for November forecast is $ 101 billion, an almost 19% increase,” Westhoff wrote in Daily Tribune.

“This financial relief doesn’t means that the financial problems of farms have been committed, but it does advocate that the situation for crop producers in the Midwest is very different from what was expected a few months ago,” Westoff.

On Wednesday, the USDA plans to update its estimates of US farm revenue to $ 102.7 billion. This is the highest value in the past seven-years. This is in large part thanks to the largest agricultural subsidy in history, $ 32.7 billion.

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Photo by Zen Chung from Pexels.

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