Private and public lenders are scheduled to testify on availability in rural America at a House Agriculture subcommittee hearing. The witnesses range from rural bankers and USDA to the federally chartered Farm Credit System and the Federal Reserve Bank of Kansas City, which monitors the farm sector. The hearing at 10 a.m. ET in 1300 Longworth will be Webcast. For details, click here.
The witness from the Kansas City Fed, Nathan Kauffman, was co-author of a May assessment, “Farm Income and Land Values Soften Further.” It said the cost of production was rising for crop farmers while commodity prices, after running at historical highs, were forecast sharply lower this fall when record corn and soybean crops would be in the bin. Tighter profit margins for grain farmers would increase likely demand for lending while reducing the financial standing of some producers.
Grain-farm income for this year’s crops “likely will be considerably below” the recent average, based on projected yields and commodity prices, says economist Gary Schnitkey of U-Illinois at farmdoc daily. Income could revert to levels around the 1996-2005 average of $51,000 a year for Illinois grain farms. By comparison, average incomes were $134,000 in 2013, when corn, wheat and soybeans set record-high farm-gate prices. Commodity prices and crop insurance payments are expected to be lower this year.