Lenders say financial stress on farmers is expected to continue for some time.
The results of a lender survey indicate continued deterioration in agricultural credit conditions, according to the survey’s author, Allen Featherstone, head of the Department of Agricultural Economics at Kansas State University.
“What’s most problematic going into 2017 is if we go back to average yields with continued prices as they are,” Featherstone said. “As we work through the surpluses from previous years, 2017 could actually be a more difficult year financially than 2015 and 16.”
The survey, done this fall, studies the expectations of lenders about interest rates, farm loan performance and land values as indicators of the overall health of the farm finance sector. Featherstone said softening land values will affect farmers’ ability to keep loans current.
“It’s anticipated, at least from the survey results, that those repayment rates would continue to suffer over the next year or so,” said Featherstone, “and so certainly there is concern from a lender’s perspective with regards to a farmers’ ability to repay credit.”
Source: brownfieldagnews.com