Ag bankers in the Federal Reserve Bank's Kansas City district say the overall farm economy remains solid, despite continued weakness in the hog and dairy sectors.

The Fed's quarterly survey of ag credit conditions shows little changed in the second quarter, and that lenders expect conditions to improve somewhat in the next 3 months. Jason Henderson with the Kansas City Fed's Omaha branch says while loan delinquency rates have edged up slightly, they still remain at historical lows.

"So while we might get an uptick in delinquency rates going forward, they're still low compared to historical levels," says Henderson, "and nowhere near the rise in delinquency rates on other types of loans."

The survey also shows that farmland values held firm, Henderson says, with some renewed interest from non-farm investors and robust farmer demand.

"With our higher commodity prices, the margins have firmed," he says, "and at the same time, a stronger financial market has really led investors' thinking about getting back into the farmland market-or at least exploring the opportunity of purchasing farmland."

Compared to last year, nonirrigated cropland values were flat, while irrigated cropland and ranchland values posted slight increases. ??The Fed's Tenth District includes Nebraska, Kansas, Wyoming, Montana, Colorado, Oklahoma and western Missouri.