WASHINGTON, Feb. 13, 2013 – Farmers’ fourth-quarter income and spending across the Midwest and Mid-South were higher than last year during the same time period, the Federal Reserve Bank of St. Louis reported today.
As part of their quarterly survey of 61 agricultural banks within the boundaries of the Eighth Federal Reserve District, the bank found that “abundant crop insurance” mostly shielded farmers’ income from the impact of the summer’s record drought.
“The 2012 drought greatly reduced production, but all of our borrowers carried crop insurance,” responded one Illinois agricultural lending bank to the survey. “Many farmers had higher levels of coverage. This has resulted in good income for most, and most will carry that income into 2013.”
The survey said, as of Feb. 4, Missouri and Illinois farmers have received nearly 23 percent of the $13.7 billion in crop insurance claims paid out nationally so far from 2012 production. USDA estimates crop insurance claims will reach $21 billion nationwide for 2012.
The survey said good growing conditions in the southernmost parts of the district, particularly near Memphis, helped produce significantly higher corn and soybean yields in that region. This allowed farmers to benefit from higher prices for their crops as commodity prices increased in the summer.
Also, the survey found demand for agricultural loans was expected to remain strong during the first quarter of 2013 compared with a year earlier, with the largest demand being seen in the Memphis and Louisville areas. The bank said first quarter 2013 availability of funds and loan repayment rates were expected to be on par or stronger than first quarter 2012 rates across the district.
To view the report, visit http://research.stlouisfed.org/publications/afm/
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