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Report: Farm credit market likely to erode in 2008

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By JOSH FUNK / The Associated Press

Monday, Nov 17, 2008 - 12:11:42 pm CST

OMAHA — Farmers with good credit in the states included in the Federal Reserve Bank’s 10th District have generally still been able to borrow money, but that likely will become harder in the final three months of 2008.

The Federal Reserve Bank of Kansas City surveyed banks in the district — which includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming and parts of New Mexico and Missouri — for the agricultural credit update released Monday.

During the third quarter, loan demand remained strong and the amount of money available to lend remained slightly ahead of last year. About 20 percent of banks raised collateral requirements.

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In the fourth quarter, farm loan demand is expected to increase while banks further tighten their credit standards.


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whatever wrote on November 17, 2008 6:13 pm:
" This is bad on so many levels it isn't even funny. JS, this may be the biggest story going into next year. Ask yourself this. If significant numbers of farmers are unable to obtain credit to plant, then how will they plant? If they sell out will they sell out in time for someone else to plant? And let's just say for the sake of argument 15 percent of Nebraska's farmers dump their land on the market within a short time frame, what will that do to farmland values and how will that affect those who bought overpriced farmland on credit? And let's say the ethanol industry is pretty much idle in this state for most of the next year? Think about the ramifications of a spring without planting and a fall without a harvest and try to sleep good tonight. Because that may be what we are talking about. "
Dan wrote on November 17, 2008 9:09 pm:
" Whatever......You are exactly right. God help us. "
whatever wrote on November 17, 2008 10:25 pm:
" Yeah Dan and it seems to be catching some farmers off guard. I've talked to some the past month or two and it hadn't occured to some of them. If it's not occuring to the farmer who is it occuring too? "
BankDitt wrote on November 18, 2008 7:01 am:
" It's about time. Maybe next the credit unions will go and we financial institutions can finally have an even playing field... "
greed wrote on November 18, 2008 7:08 am:
" is one of the problems for some of the farmers....talk about keeping up with the Jones's. Gotta have a new tractor/combine/etc...gotta have the latest gadgets...gotta have a new farm loan to cover my purchases....gotta have more land...gotta try to play the market to make top dollar on my crops...thinking that collateral in their property is going to be enough to bail them out if they get in trouble.
Farming is a tough business. It's difficult for the 'little guy' to make it given the high prices of everything. Even if you are diversified and make the most of every acre of ground and do everything just right, there is always the weather variable that can do you in. "

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