Farm credit conditions showedfurther signs of stabilizing in the plains and mountain states
during the fourth quarter of 1986, according to bankers
surveyed by the Kansas City Federal Reserve Bank.
    The rate of loan repayment improved as one of every four
bankers reported higher loan repayment rates than a year ago.
Respondents said interest rates continued to edge lower.
    However, the decline in farm real estate values quickened
after moderating through the year, dropping an average four
pct. Farmland values averaged 14 pct lower than a year earlier
and 55 pct below 1981's peak values.
    The survey authors blamed the drop on depressed crop prices
and uncertainty about the future of government crop programs.
    Farm loan demand was the lowest since 1986 with only 13 pct
of the survey respondents reporting an increase in loan demand.
The also reported that 25 pct of the non-farm businesses in
their areas were having severe financial problems, and said the
rate of rural non-farm business closings was nearly three times
higher than normal.
    Over 150 bankers responded to the survey in the Tenth
Federal Reserve District which includes all or parts of
Colorado, Kansas, Missouri, Nebraska, New Mexico, Oklahoma and
Wyoming.
 Reuter
