The Kansas City Federal Reserve Bank Wednesday said the average size of loans for some livestock categories reached an all-time high and contributed to the increased lending. While the average size of operating loans also remained elevated, a smaller number of loans limited the overall financing of operating expenses.
The agricultural economy generally remained strong as elevated commodity prices continued to support farm incomes. Prices of most major crops were at multi-year highs moving into fall harvest and supported farm revenue prospects. However, weakness in the cattle industry persists as low cattle prices continued to limit profit margins for producers. In addition, concerns about drought and higher input costs continued to intensify and likely contributed to an increase in financing needs in the livestock sector.