The Impact of Supply and Demand Changes on Non-Real-Estate Agricultural Loans

Ty Kreitman, Todd Kuethe (), David Oppedahl () and Francisco Scott

No RWP 22-06, Research Working Paper from Federal Reserve Bank of Kansas City

Abstract: This study examines the degree to which changes in non-real-estate agricultural loans at commercial banks are driven by changes in supply or demand. Our identification strategy exploits information provided by agricultural lending surveys conducted by three Federal Reserve Banks: Chicago, Kansas City, and Minneapolis. Building on recent studies of loan officer opinion surveys, we estimate the changes in agricultural loan supply and demand using an unbalanced panel of 1,028 banks across the 2002-2021 period. The survey responses provide instruments for supply and demand changes to examine fluctuations in bank-level agricultural loan volumes obtained from Federal Financial Institutions Examinations Council quarterly “call reports.” We find that changes in the volume of non-real-estate farm loans at commercial banks are principally driven by changes in excess loan demand. These findings support a careful approach for policies aimed at boosting supply of agricultural credit.

Keywords: Agricultural lending; Credit demand and supply; Bank lending survey (search for similar items in EconPapers)
JEL-codes: E51 G21 Q14 (search for similar items in EconPapers)
Pages: 41
Date: 2022-07-14, Revised 2025-10-29
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedkrw:94521

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DOI: 10.18651/RWP2022-06

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