Reuters examined a new farm survey by the Federal Reserve Bank of Chicago on Thursday that detailed farm loans at Midwest banks are having the most repayment difficulties in 20 years in 2Q19. Following six years of falling farm income and rising debt levels, and the recent addition of record floods across the Farm Belt and the trade war between the US and China, a farm crisis on par to the 1980s could be imminent.
"The portion of the 7th District's agricultural loan portfolio reported as having 'major' or 'severe' repayment problems had not been higher in the second quarter of a year since 1999," the report said.
The drop in farm incomes has also weighted on property values, which sank 2% in 2Q19 after being adjusted for inflation, the 7th Federal Reserve District said in the report.
The Chicago Fed said the availability of credit to farmers was quickly diminishing but said loan demand was higher in the quarter on a YoY basis.
What's happening is that Wall Street banks are winding down risky lending to farmers because incomes continue to deteriorate.
Record floods compounded more pain for farmers who have already been dealing with a plunge in spot crop prices and a trade war that has resulted in China halting all US agriculture products.
With repayment issues among farmers soaring to two-decade highs for the 7th district, it seems that a farm bust could imminent sometime in 2020.
https://www.zerohedge.com/news/2019-08-16/midwest-farm-loan-repayment-issues-hit-highest-level-1999
"The portion of the 7th District's agricultural loan portfolio reported as having 'major' or 'severe' repayment problems had not been higher in the second quarter of a year since 1999," the report said.
The drop in farm incomes has also weighted on property values, which sank 2% in 2Q19 after being adjusted for inflation, the 7th Federal Reserve District said in the report.
The Chicago Fed said the availability of credit to farmers was quickly diminishing but said loan demand was higher in the quarter on a YoY basis.
What's happening is that Wall Street banks are winding down risky lending to farmers because incomes continue to deteriorate.
Record floods compounded more pain for farmers who have already been dealing with a plunge in spot crop prices and a trade war that has resulted in China halting all US agriculture products.
With repayment issues among farmers soaring to two-decade highs for the 7th district, it seems that a farm bust could imminent sometime in 2020.
https://www.zerohedge.com/news/2019-08-16/midwest-farm-loan-repayment-issues-hit-highest-level-1999
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