"Extreme" weather and rising feed and oil costs have taken a toll on agriculture in America's farming heartland, slowing growth in farmland prices and cutting spending on tractors and silos.
Oklahoma farmers, tested by the worst drought since the Dust Bowl years of the 1930s, have suffered the biggest decline in sentiment over prospects among central US states also including Kansas, Missouri and Nebraska, the Federal Reserve said, noting a rise in insurance claims."In the southern Plains, farm income expectations wilted as drought cut... wheat production," a report from the Fed's Kansas City bank said."Poor grazing conditions prompted herd liquidations and increased cattle feeding costs."'Farm profits trimmed'However, even in the better-watered central Plains, expectations for farm prosperity declined in the April-to-June quarter."Farm profits were trimmed as crop farmers paid more for production inputs, such as seed and fertilizer, and livestock producers paid high feed costs," the briefing said.Indeed, overall, "extreme weather and rising input costs cut… farm incomes" in the region, the Fed said, flagging knock-on effects on land and farm equipment markets."With shorter profit margins, bankers noted less capital spending on machinery and equipment."Meanwhile, the "pace of farmland value appreciation slowed", to 2.3% for non-irrigated land, and 1.0% for ranchland....MORE