Kenneth C. Carraro reviews agricultural trends of 1986 as they affected farmers and farm lenders in the District. According to Carraro, the District experienced widely varying weather conditions that resulted in record crop yields in some regions but below-average yields in others. One significant agricultural development is the expanding role of the government in direct payments to farmers and reduced farm output. Livestock producers enjoyed higher prices and lower input costs for the year. Agricultural banks reversed a recent trend and posted improved profits and lower levels of delinquent loans. While local Farm Credit System banks showed smaller losses in 1986 than in 1985, farm loan quality continued to deteriorate.