Farms Start to Feel Credit Pinch
Cash Shortage Hits Once-Thriving Sector as Downturn Saps Rural Lenders
By LAUREN ETTER
The credit crunch is trickling down to the farm as agricultural lenders tighten credit standards, leaving some farmers short of money to feed their animals or put in crops as the planting season nears its end.
Deepening slumps in the livestock, dairy and ethanol industries have contributed to mounting troubles for rural lenders. That is making it harder for some growers to borrow money they need to buy seed, fertilizer, equipment and animal feed.
Direct loans outstanding made to farmers for operations by the Farm Service Agency have hit their highest level since the Farm Crisis of the 1980s.
"It's tough," said Bruce Drinkman, a 46-year-old dairy farmer in Glenwood City, Wis., who recently had his credit line drastically reduced. "My whole lifetime of work could be destroyed."
Operating capital is essential for our country to continue enjoying the world’s best food supply. Many times, it seems that the ag economy is on a different track compared to other industries, but we are not immune to the effects of a global recession. Several ag commodities have experienced very low prices for quite some time now and hopefully that turns around soon.