WASHINGTON, July 27, 2016 - About 69 percent of senior
credit and risk officers from the 17 Farm Credit Associations in the AgriBank
District selected commodity prices as the top challenge. The next biggest
challenge was input costs at just over 10 percent, followed by credit
availability, and production risk due to weather, both at 3.4 percent,
AgriBank, one of the largest banks in the Farm Credit System, said in a news
release. The category “other” got almost 14 percent.
“The focus has been on commodity prices — in the minds of
many producers, if the price of corn were $4.50 per bushel versus $3.50 per
bushel, a lot of problems would be solved,” Jerry Lehnertz, senior vice
president of Credit at AgriBank, said in an “AgriThought” report. “However,
hope — thinking that things might be better next year — is not a plan. Farmers
and lenders need to work together to take proactive steps to succeed through
today’s environment.”
Farm Credit lenders are responding to borrower concerns by
providing services to restructure their financial situations, the poll shows.
Almost 87 percent of respondents said they were supporting borrowers by
rebalancing debt to bolster working capital and/or reduce principal payment
requirements, while 73 percent said they were refinancing credit to take
advantage of current interest rates.
“Both answers reflect the changing financial landscape for
commodity prices and how lenders are working with customers to help them
maintain their financial health,” AgriBank said. Other responses included
consulting on crop insurance and other risk management solutions (80 percent),
counseling regarding future operating plans (63.3 percent), and marketing and
hedging strategies (50 percent).
The AgriBank District covers a 15-state area stretching from
Wyoming to Ohio and Minnesota to Arkansas and includes about half of the
nation’s cropland.
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For more news, go to: www.Agri-Pulse.com