Credit conditions weakening, Chicago Fed says

The policy advisor for the Federal Reserve Bank of Chicago says agricultural credit conditions are showing signs of weakening.

“It’s a different scenario than we’ve had the last couple years when the incomes were quite high,” David Oppedahl said.

Oppedahl added their recent first quarter report showed a number of farm borrowers having more carryover debt compared to the previous year. “There does seem to be extra demand now for operating loans and certain other kinds of lending such as for cattle operations and those loans guaranteed by FSA.”

He tells Brownfield, “With lower crop prices, the farmers are needing to get a little more operating credit since they’ve worked through some of their working capital.”

Oppedahl says the average nominal interest rates on operating loans, feeder cattle loans, and agricultural real estate loans are higher than 2022/2023 levels.

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