Extreme weather and rising feed and fuel costs across the Midwest crimped spending on farm equipment during the second quarter, according to a Federal Reserve survey published Monday.
Bankers canvassed by the Federal Reserve Bank of Kansas City also predicted a slowdown in purchases of tractors and other equipment after farmers upgraded their machinery last year, though the land values that have underpinned investment continue to rise.
The quarterly survey suggests expectations that U.S. farm receipts could hit a record this year may be revised down after farm income and capital spending fell for the first time in three quarters.
The combination of drought and floods has made some farmers more reliant on crop insurance and government payments, while the Kansas City Fed noted an uptick in loan demand, with banks offering easier terms to win business after a weak period of lending demand.
