Upper Midwest ag lenders report mixed numbers

Northwestern Financial Review, Dec 15-Dec 31, 2002

[chronicle]

Agricultural lenders in the Ninth Federal Reserve District are reporting a wide range of financial conditions, according to the Minneapolis Fed's third-quarter agricultural credit conditions survey. An overwhelming majority of surveyed lenders in Montana and South Dakota reported that the overall income of their farm and livestock customers continued to fall, due to severe drought and lower livestock prices. However, many Minnesota and North Dakota crop producers enjoyed nearly ideal growing conditions and higher prices. Here are a few of the numbers from the survey of 106 agricultural bankers in the Ninth Federal Reserve District included Montana, North and South Dakota, northwestern Wisconsin and Minnesota.

* 58 percent of lenders reported a decrease in farm income; less than 10 percent noted an increase.

* 34 percent of overall respondents reported lower household spending, and 60 percent expected no change.

* 50 percent of South Dakota respondents and 12 percent of Minnesota lenders revealed lower household spending.

* 55 percent of lenders indicated decreased levels of capital spending.

* District bankers reported that 29 percent of their agricultural customers are loaned up to their limit.

* Nearly a third of respondents indicated lower loan repayments, while only 6 percent reported increased loan repayments.

* 31 percent of respondents reported increases in loan renewals; 3 percent reported decreases.

* A quarter of district respondents indicted increased demand compared with 18 percent who reported decreased loan demand.

* 14 percent reported increased collateral requirements, while the remaining indicated no change.