Supply and demand equations for explaining net changes in farm real estate debt by lending institutions arc presented. Capital appreciation, net farm plus nonfarm income, and the ratio of money balances to gross production expenses are used to explain changes in demand. Changes in supply arc measured by the yield differential between farm and nonfarm investments and availability of mortgage funds. Elasticity estimates indicate that demand is more sensitive to changes in income than to capital appreciation, while supply is sensitive to changes in yield differentials.