According to the latest survey of agricultural bankers in the Eighth Federal Reserve District, a majority of bankers reported that farm income in their area declined in the first quarter of 2016 relative to a year earlier. The erosion in the farm sector is continuing to reduce farm household expenditures and capital spending from year-earlier levels, as well as putting downward pressure on farmland values and cash rents. On average, Eighth District agricultural bankers reported that the value of quality farmland declined by 6.4 percent from year-earlier levels. This decline surpassed the previous quarter's decline (2.5 percent) and was the largest drop since our survey began in the second quarter of 2012. This survey found that, relative to three months earlier, proportionately more bankers than expected reported a higher demand for loans and availability of funds in the first quarter compared with a year earlier. How­ever, the rate of loan repayment was worse than expected. Compared with their average in the fourth quarter of 2015, interest rates on fixed-rate loans fell slightly, while interest rates on variable-rate loans rose slightly. This survey contained two special questions that asked bankers about their bank's farm loan portfolio repayment rates and the percentage of their customers who had borrowed up to their loan limits. On balance, agricultural bankers in the Eighth District reported no significant repayment problems and that a sizable majority of their customers had not yet borrowed up to their loan limits.