Agricultural Survey

Quarterly Comments

District bankers were asked for additional comments concerning agricultural land values and credit conditions. These comments have been edited for publication.

Region 1—Northern High Plains    

• Recent rains have improved moisture conditions, but it has been too late for dryland crops, which are nonexistent from drought. Low commodity prices are making it a challenging year to reach profitability. Late rains have resulted in abundant late grass, but most stocking of livestock has been extremely light throughout the summer months. Overall dry conditions over the past quarter have resulted in decreased agricultural loan volume.
• Tariffs have created some volatility in the markets, especially cotton and cattle. Late-summer moisture should provide a good start to winter wheat. Corn looks good and will start harvesting by mid-September.
• Farmers are expecting corn yields to be near record levels across much of the High Plains. We still have areas that have received very little rain, but most are back to near normal.

Region 2—Southern High Plains

• Spotty rains have helped the cotton crop fill out the top portion of the plant, but only if you were under the cloud. There are still pockets that didn’t receive much rain. Prices still appear bullish.
• Sales of farm and ranch land during the past three months have been virtually nil. Drought in our trade area has almost precluded any trades.
• There are no dryland crops in the area. There were a few isolated drip-irrigated and pivot-irrigated cotton crops hailed out in mid-August. We have received timely rains over the last three weeks, and the temperature needs to stay warm to allow our cotton to continue to mature. Irrigated corn in the area looks good as well and should be in the 175-bushel range. Cotton is expected to make in the 2.5-to-3.5-bale range. Irrigated crops are satisfactory at this time.

Region 3—Northern Low Plains 

• Our area is currently still in a drought. Dryland crops are in poor condition. Irrigated cotton and peanuts are finishing up. Peanut and cotton harvests are about to begin. Pasture conditions are fair where there have been showers, but the majority are in poor condition. Many calves have been sold earlier than normal.
• We have had good rainfall recently. We are going into fall in good shape. We should have wheat pasture this year. For the most part, things are looking up.

Region 4—Southern Low Plains 

• Ninety percent of dryland cotton has failed due to drought. MPCI (multi-peril crop insurance) loss payments will be large. We are seeing continued cattle liquidation due to drought. Tank water is getting very low or is gone. Hay prices are high with tight supplies. Wheat planting has started in areas where some rain has fallen. Operators are being very cautious until good general rain comes. Pastures are in very poor shape going into the winter.

Region 5—Cross Timbers  

• We recently received good rain in the area. Ranchers had been selling cattle. Hay prices are up due to dry weather and short supply.
• Rain has finally come in the last few days to much of our area after a dry and hot summer. Hopefully, this will help with the hay shortage we are experiencing, and pastures can recover and provide some good fall grazing. Also, conditions for planting wheat and oats improved tremendously.
• We have had a very dry and hot spring and summer. Stock water is a problem for many.

Region 6—North Central Texas 

• A dry July and August hurt hay production.
• We are trying to move somewhat away from agriculture due to weather and risk. We are seeing a higher demand for real estate loans. We have had some beneficial rainfall in the last 10 days. We are hoping for one to two more cuttings of hay.
• A small tract of unimproved land, 15 acres, sold for $6,500 per acre recently.

Region 7—East Texas

• Last quarter was one of the driest ever recorded. Hay production was almost nil and was in high demand. Some calves were shipped early to give cows and pastures some relief. Corn harvest was average to good as was milo. Cotton continues to look like a good to average crop with very good prices. Rains as of this date may hurt cotton production, but it is too early to know. Good overall rains across this area should help hay producers with late cuttings.

Region 8—Central Texas

• The big thing right now is finding hay and getting rain. Ranchers have already started feeding old hay left over from last year, with everyone hoping for rain to make a fall crop. Hay will be in short supply. Rain is happening every day around places, but no big general rain has come yet, and the small showers are not helping at this time. If we don’t get a wet fall, it could be hard times for a lot of ranchers going into the winter months. Calf prices are still holding up well at local sale barns despite the large amount of cattle coming into the barns every week. Oil and gas fracking continues in the area, with several rigs still active in drilling as well. We are praying for rain.
• After a protracted dry spell put our area in a drought zone, we have received some beneficial rains with the promise of more. Hay and cattle producers are now worried by the onset of the armyworm. Cattle and oil prices seem to be holding steady.

Region 9—Coastal Texas  

• There still is some lingering impact caused by Hurricane Harvey and the cold, wet winter on the cattle and pastures, but conditions appear to be getting better. The rice crop appears to be good but with less-than-desirable prices.

Region 11—Trans-Pecos and Edwards Plateau

• Some areas of the Edwards Plateau received welcome rainfall in the last quarter, but most areas remain behind the average for the year. As always, rain and prices dictate what kind of year agriculture will enjoy. Thus far, prices for cattle, sheep and goats have remained fairly strong despite a few recent slumps in the calf market. Mohair prices are good, wool sales have been from good to strong, and lambs and kids have sold very well through the summer. Things could be worse than they are at this time. All we need is more rain!
• Recent rains have really turned the pastures (and producers’ attitudes) around. Pastures are recovering nicely, and with the mostly general rains the first week of September, should be good going into fall and winter. There is even some talk about increasing livestock numbers, with prices now lower than earlier in the year. With continually increasing expenses, the challenge is to increase margins and profitability. Predators remain a problem, particularly in sheep and goat operations.

Region 12—Southern New Mexico

• Precipitation has been extremely spotty this year; thus, many producers are experiencing differing challenges even though they are close to each other geographically. It appears that most ranchers in our area made it through the summer without having to decrease their herds. Likewise, some dryland farmers are reporting potential bumper crops of milo, while others are not sure theirs will make it to harvest. All in all, though, the farm economy has been pretty stable.
• Corn silage harvest is currently underway, with yields on irrigated production good considering the dry weather. Livestock prices are highly variable, but there is supportive pricing for cow–calf producers with livestock feedlot performance in the red. Recent general rains will let most farmers sow their winter wheat. Dairy margins are tight, with no immediate relief in sight as production levels remain high.

Figures

Tables