In our survey of 45 agricultural banks in the Eighth District, proportionately more bankers reported lower farm income, farm household spending, and capital equipment expenditures for the second quarter than for the same period a year ago. Forward-looking expectations in this report are similar to those in our previous report: A majority of respondents expect these three variables to remain below their year-earlier levels in the third quarter. Respondents also indicated that agricultural land values continued to decline in the second quarter, as quality farmland and ranchland or pastureland prices were, respectively, 6.7 and 7.5 percent below their peak values reported in the fourth quarter of 2013. In contrast, cash rents for quality farmland increased to their highest level since the survey began (second quarter of 2012). A majority of bankers reported that they had more loanable funds available than at the same time last year, but proportionately more bankers reported weaker loan demand than at the same time last year. Respondents have slightly stronger expectations of greater loan demand in the third quarter relative to the same time last year. 

Interest rates rose across all major variable-rate loan types, while yields on fixed-rate loans increased for two of three major loan types.