U.S. farmers to leverage land as farm economy deteriorates: survey

Reuters

DALLAS (Reuters) – As the U.S.-China trade war drags on, more farmers are expected to take out debt against the land they own – their collateral of last resort – to keep their operations going, according to a survey of lenders.

The survey found that bankers are increasingly worried about farmers facing cash-flow problems: 46% of bankers expect an increase in loans secured by farmland for the 2019/20 growing year, up from 37% for the previous period. 

The poll by the Federal Agricultural Mortgage Corp (Farmer Mac) and trade group the American Bankers Association (ABA) was released this week at the ABA’s annual agricultural banking conference.

The concern comes as the U.S. farm economy deteriorates. Farmland is the key pillar of equity in the U.S. agricultural heartland, which has been suffering from lingering weakness in commodity prices and loss of key export markets due to President Donald Trump’s trade disputes.

Previously, bankers had been focused on commodity prices falling and decreases in overall farm income, said Jackson Takach, chief economist for Farmer Mac, which provides a secondary market for a range of loans made to borrowers in rural America.

“But this year, for the first time, it was liquidity,” Takach said in an interview with Reuters.

One key concern among lenders is that farm profits have continued to fall even as the survey found some bankers are seeing farm family expenses rising, in part due to an increase health care expenses, said Jim Chessen, chief economist for the ABA.

About 57% of farm loan customers were profitable in 2019, according to the survey, but more than 82% of farm bankers said their customers’ profits were dwindling – with the biggest economic woes being felt in Midwest and Southern states among dairy, grain and livestock producers.

Takach and Chessen said bankers are focused on whether or not farmland values will continue to hold steady. According to the survey, nearly of half of the respondents said they expect land values in their areas to decline in 2020.

For bankers, one key concern has been the amount of farmland that could come up for sale in the coming months and whether that could trigger an across-the-board fall for land prices. But there has been little sign so far of land supply outstripping demand, said F. Howard Halderman, president of Halderman Real Estate and Farm Management in Wabash, Indiana

“There hasn’t been a big increase in inventory coming on the market and that has helped keep prices stable,” Halderman said.

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7 Responses to U.S. farmers to leverage land as farm economy deteriorates: survey

  1. # 1 NWO Hatr says:

    “The survey found that bankers are increasingly worried about farmers facing cash-flow problems: 46% of bankers expect an increase in loans secured by farmland for the 2019/20 growing year, up from 37% for the previous period.”

    Bankers? WORRIED???

    Bullsh#t… the bankers NEVER LOSE.

    Foreclosure is just a late payment away for those maggot vultures.

  2. Frank says:

    Who are ya kidding the farm and all the equipment are all used for collateral to buy seeds and diesel every year. That’s why so many farmers fold up every year just getting by every year but one bad spell and they are done.

    • Henry Shivley says:

      I’m sure every FAMILY corporate farm is running in the red and for some reason none can harvest their own seed. Every small business in this country is running in the red. And I don’t have me no college degree in business and economics, but at a high school level, I was taught that until you are running your business in the black, you don’t own anything.
      I guarantee you these international corporations, some being countries like China, you know the huge corporate farmers, don’t have to borrow shit. That is the problem with a country that runs on a debt dollar. No one owns anything but the bank issuing the debt and you do what you are goddamn told or your credit line is pulled. If you are not an international corporate farmer incorporated, you are a straw man subject sharecropper, in this the richest country on the planet that is supposed to belong to us.
      It is a Republic usurped by a corporation that embezzled everything, and they aim to get every f-king one of us as we pretend that there is any difference between any one of us. Your social standing in this debt society on the subject side depends on how good you are at kissing ass and kowtowing, and it will stay this way. Know that it is this way because the largest armed population on the planet is so ignorant, cowardly, and easy to deceive that they allow it.

      • mary in ND again says:

        ‘the largest armed population on the planet is so ignorant, cowardly, and easy to deceive that they allow it.’…… and none more so than here in the twilight zone….but I keep talking

        • Henry Shivley says:

          When I first started doing this some 30 some years ago, I was called silly, I was called ridiculous. The people in this country just plain need to hurt more. They need to feel the twinges of hunger in their stomachs. More need to lose their homes. More need to have their children hacked up by the invaders. I guess tyranny to some is still a bearable condition because it is not from lack of knowing.
          Our people have had not but the pretence of freedom for about 120 years now, so they act like a herd of sheep, each pushing a face into an ass trying to get to the center where it is the safest from the wolves that circle.
          But this is just the worthless portion of the population and they serve the enemy, simply by being in the way and accepting servitude for the mass majority. But every day you see another two or a hundred saying, “Hey, they can’t do this to me. How can they do this to me? I’ve followed all of the rules. I’ve sucked jew ass so hard I’ve tasted the jew spit from the jew mouth.”
          That 12-18% are the biggest barrier standing between the American national and liberty. You see them every day, either masons or those sucking mason asses. This could all end very quickly if the mass majority just turned on these f-kers and started beating them with our fists every chance we could get away with it. They are blatant traitors, aiding and abetting the foreign occupation, and they are the ones who need to starve, but they will be kept pleasantly plump in their lethargic, dimwitted, mildly retarded state as long as they serve the purpose of the betraying the rest of us.
          We have no one to complain to but ourselves. It was not that long ago that brown nosers and ass kissers where shunned and driven out by the rest of us. Now they are elevated in the hope that they are at least intelligent enough to sign a Mexican’s paycheck and vote their straw man like a good subjugated traitor.
          They are not worth words. Like I said, they need to be having the shit beat out of them, every time someone sees an opportunity. Until these lowlifes fear the American national wolf more than they do the paper tiger and its blackwater USA enforcers, they will continue to commit treason against the rest of us for that pat on the head and a few hours in a comfort zone every day.
          It is just the lay of the land, but in the big picture they cannot push the international communism any further without encountering American nationals who are going to enforce the absolute law of this land. And when this occurs, I think somebody’s going to have to explain exactly what all the shooting is about.
          We must stay true to the letter of our ratified law. If we settle for one half measure, we doom another generation down the road to our fate all over again, and that would be the most cowardly of cowardly acts.

          • mary in ND again says:

            ‘I think somebody’s going to have to explain exactly what all the shooting is about.’……maybe then they will be ready to listen

    • Mark Schumacher in LV says:

      Then why are they all driving brand new trucks worth 75 to 80 thousand dollars??? Living in huge homes that resemble mini mansions you only see on Hollywood back lots for huge movie productions??

      There is a lot of bullshit floating around with many of these so called POOR farmers.

      Many are struggling yes, but many are living the life of riley.

      Many are paid, period…

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