Despite recent news reports about livestock operations having trouble accessing credit, financial experts expect the situation to improve. If you can hang on, better days are ahead.
A recent report in the April AgDM newsletter says that brighter profit opportunities and low debt levels should improve access to credit for agricultural producers in 2010. In general, agricultural banks remain in solid financial condition and have ample funds available for agricultural loans at historically low interest rates.
The recession cut demand for agricultural products and raised the risks surrounding agricultural loan activity, as evidenced by higher delinquency and charge-off rates. The biggest challenges have emerged among livestock enterprises struggling with economic losses and higher debt levels, say authors.
Still, overall farm debt levels remain near historical lows, and a rebound in farm profits should bolster farm income statements and balance sheets. A farm rebound, spurred by a global economic recovery, could open credit flows and foster additional investments in U.S. agriculture.
Source: April AgDM newsletter, Iowa State University