Our latest survey of agricultural banks in the Seventh
Federal Reserve District found that farmland values continued
to rise during the winter. The bankers reported
that farmland values rose 2 percent during the first three
months of 1998, while the year-over-year gain, as of April
1, averaged about one-tenth. The demand for new farm
loans remained firm and the survey respondents reported
a modest increase in available funding for farm loans.
But loan repayments at agricultural banks deteriorated—
compared with a year earlier—due to lower prices for
most farm commodities.