Farms see income slip in 4Q of ’18

Farm income in Arkansas and other states in the Midwest and Mid-South continued to decline in the fourth quarter of 2018, the Federal Reserve Bank in St. Louis said Thursday.

Still, prices of quality farmland, ranchland and pastureland rose, according to the bank’s latest Agricultural Finance Monitor, a survey taken the last two weeks of December of 22 agricultural banks in Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

“Lenders continue to report declines in farm income relative to a year earlier,” the report said, noting it’s the 20th consecutive quarter for farm income to decline.

“We have heard rumors of large farmers filing for bankruptcy,” a Missouri lender said, according to the survey. “Farmers in our area still have crops in the field.”

Quality farmland values rose 3.4 percent in the fourth quarter from a year earlier, according to the report. Ranchland or pastureland values increased by 6.5 percent in the fourth quarter.

The survey also asked banks about the health of the rural economy, the economic outlook for 2019 and expectations for farmland returns in 2019. About two-thirds of bankers reported that local economic conditions were fair, while about a third reported that conditions were good, according to the report.

“Regarding the economic outlook, two-thirds believe that local economic conditions will remain the same, while a third expect them to worsen in 2019,” the Federal Reserve said. “Looking at expectations for farmland returns, nine in 10 bankers expect farmland returns to be positive, greater than 0 [zero] percent but less than 5 percent.”