Meanwhile, nearly half of lenders reported real estate loan volume as below normal, a 5 percentage point deterioration from a year ago. The increase in farmer profitability has helped farmers repay loans. Normal and above-normal levels of loan repayments were reported by 85 percent of lenders, a 17 percentage point increase over last year's results. Renewals and extensions decreased, as 11 percent of respondents indicated above-average levels, compared with over a quarter of the lenders in fourth quarter 1999. Moreover, the number of farmers at their debt limit decreased from 33 percent in the fourth quarter of last year to 28 percent in the fourth quarter of 2000.
Land prices continue to rise.
Cropland prices increased over last fall's prices from an average of 2 percent in Montana to 7 percent in western Wisconsin. In addition, pasture land price increases ranged from an average of 3 percent in North Dakota to 13 percent in western Wisconsin over those of a year ago. Collateral levels remained normal, as 82 percent of lenders reported average levels of required collateral. Meanwhile, interest rates for farm loans have decreased about 10 basis points from the third quarter of 2000.