WICHITA, Kan. (AP)--Farm credit conditions in some parts of the West and Midwest weakened in the third quarter, with more producers falling behind on loan payments and asking for extensions, the Federal Reserve Bank of Kansas City said Nov. 29.

Although rising energy prices affected third-quarter results, many bankers expect the full impact to be seen next year, not at the end of this year, said Nancy Novack, associate economist with the Federal Reserve Bank in Missouri.

"Fertilizer prices tend to lag behind increases in natural gas prices, which have still to peak out yet," she said. "The rise in fertilizer prices have yet to be seen."

The survey is based on responses from 279 banks in the 10th Federal Reserve District, an area that includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri.

"Some of this started to surface because of rising energy prices," Novack said. "Bankers are a lot more cautious than they were a year ago. I don't think financial conditions are in bad shape, by any means. I think there are probably some loans that may have to be restructured, and they may not extend credit to some producers."

For the first time in two years, the index of farm loan repayment rates fell below 100 for the district, the Federal Reserve reported. About 15 percent of the banks reported increases in requests for renewals and extension from a year ago. Loan demand was strong, but 16 percent of the banks reported a decline in availability of funds from a year ago.

On a national basis, the Federal Reserve expects farm income to the be the second-largest ever, coming on the heels of last year's record incomes. Livestock prices remain strong. Crop receipts, while down some from a year ago, are still above the 10-year average. Government payments are higher.

At the same time, about 77 percent of banks surveyed in the 10th District said they expected lower farm income this year. About 83 percent expect lower income for crop farmers, while only 43 percent expected a decline for livestock producers, the Federal Reserve said.

"Energy prices have a bigger impact on crop producers, it is a bigger share of their operating costs than livestock producers," Novack said. "The livestock market has been very favorable the last couple of years."

The Federal Reserve also noted that while farmland values in its 10th District remained strong, the momentum may be slowing. Non-irrigated cropland values went up 7.8 percent, compared with gains of more than 8 percent in the previous four quarters. Irrigated cropland values rose 6.9 percent over a year ago.

Ranchland values--especially in Missouri and Oklahoma--were up by 14 percent over last year, the agency reported.

"Missouri sees a lot of nonfarm demand impacting those values," Novack said. "In Oklahoma, obviously cattle is a big industry there and high cattle prices have impacted ranchland values. The energy boom also is helping the Oklahoma economy."

Ranchland values are strong in all states in the region, she said.

"That tends to be some of the first land sought for investment purposes by non-farm buyers," Novack said. "It is more a recreational type of land, also less expensive relative to cropland."

Meanwhile, interest rates on new farm loans also went up, averaging 8.18 percent for operating loans and 8.12 percent for machinery and intermediate-term loans by the end of the third quarter. Real estate loans were averaging interest rates of 7.58 percent.