Bankers in the Federal Reserve’s 11th district, which includes Texas, northern Louisiana and southern New Mexico, report “slightly worsening conditions” as drought persists and commodity prices remain low.
In a survey, bankers said higher cattle prices “boosted income for some but pushed down income for others.”
Those higher prices, however, have also increased demand for loans to pay for replacement cattle. “Despite government assistance, the outlook for 2026 income remains weak,” the Dallas Fed said.
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“The ad hoc government payments being sent out as we speak will be helpful, but not enough to make up for the drop in price,” one survey respondent said.
“Cow-calf operators are seeing record profits due to high calf prices. Feedyard head counts continue to decline with tightening beef supply,” another said.
Overall, agricultural loan demand declined, but “loan renewals or extensions continued to rise,” the Fed said. “Crop storage loan volume increased for the first time in eight years, and operating loan volumes also rose.”
