Farm lending at commercial banks declined in the third quarter of 2016, but remained elevated as lenders continued to assess the downturn in the U.S. agricultural economy.

The need for short-term financing in the farm sector remained high as profit margins remained weak.

Alongside growing risk in the sector and slight declines in loan performance, agricultural bankers made additional adjustments to loan terms and continued to rely more heavily on farm real estate as collateral.

Farmland values continued to decline at a modest pace, which may put further pressure on agricultural credit conditions for some borrowers.

Read the complete issue of the Agricultural Finance Databook for additional insights on national farm lending.