The Department of Agriculture said Thursday it would provide up to $1 billion in loan guarantees to help rural businesses and farmers meet their working capital needs during the pandemic. The new program is patterned on the USDA's existing Business and Industry program but with a higher loan guarantee level and lower requirements for collateral. (No paywall)
Farmland prices are holding steady and agricultural banks are financially strong — potentially two key sources of support for the farm sector during the disruptions of the coronavirus pandemic — said the Federal Reserve in a report on Thursday. (No paywall)
Several environmental and animal advocacy groups are suing the USDA's Farm Service Agency for allegedly delaying and over-redacting its responses to Freedom of Information Act requests. The groups say the agency has systematically withheld information about its loan programs and concealed how much of its funds are directed toward industrial-scale animal agriculture.
Agricultural bankers are lending a markedly larger amount of money to farmers and ranchers, with loan volume up 11 percent from April, May, and June of last year, said the Federal Reserve on Thursday. It was the highest rate of growth in loan volume in the spring quarter since 2011.
Ag bankers are charging higher interest rates and asking farmers to pledge more collateral in the face of a rising demand for loans, the Federal Reserve said Thursday in its quarterly Agricultural Finance Databook.
About half of the USDA’s local offices will be open for three days, beginning Thursday, to deal with existing farm loans and provide tax documents to farmers and ranchers. USDA employees will not consider applications for new loans, the new dairy support program, disaster relief, or Trump tariff payments.
Farmers typically try to stretch their dollars during the summer in the expectation that payday will arrive with the fall harvest. Not this year. Ag bankers report the largest summertime increase in non-real-estate loan volume in 16 years and it was driven primarily by demand for operating loans to pay day-to-day expenses, said a quarterly Federal Reserve report.
Agricultural bankers are slowly raising the interest rate on loans to farmers and ranchers, with the largest increases on the short-term operating loans that account for 60 percent of new, non-real estate farm loans at the banks, said the Ag Finance Databook published by the Kansas City Federal Reserve Bank. "Although farm debt also has continued to rise alongside higher rates, the increase in interest expense has remained relatively small."
Commodity prices are still in a trough but U.S. farm income is on the rise for the first time since 2013 because producers are sending more crops and livestock to market than initially expected, said the USDA. It forecast net cash farm income, a measure of liquidity, of $100.4 billion this year, far stronger than the February forecast of $93.5 billion, but only three-fourths of the record set in 2013.