"Financial conditions in the agriculture economy are flashing more signs of strain as farmers' costs remain high while prices for their crops stay low. A survey last month from the Chicago Fed found that third-quarter repayment rates in the Midwest for non-real-estate farm loans were lower than a year earlier for the eighth quarter in a row. Meanwhile, 21% of the lenders who responded to the survey said collateral requirements for farm loans rose in the third quarter, while none reported that requirements eased."
"Earlier this month, the American Soybean Association (ASA) projected that 2025 will mark a third straight year of losses, noting that when harvest began in September, futures prices for November were 25%-30% lower compared to 2022. At the same time, farm production expenses are seen increasing by $12 billion from a year ago to reach $467.4 billion in 2025. And with costs seen staying high next year, 2026 is shaping up to be more of the same."
"Several factors have spiked costs recently. President Donald Trump's tariffs have made key imports more expensive, Russia's war on Ukraine boosted fertilizer prices, and the Federal Reserve's earlier round of rate hikes lifted borrowing costs. On the demand side, Trump's trade war essentially halted Chinese orders for U.S. soybeans until just recently. Separate data have shown that U.S. farm bankruptcies have soared t"
Financial conditions in the U.S. agriculture sector are deteriorating as farm input costs remain high while crop prices stay low. Midwest repayment rates for non-real-estate farm loans fell for an eighth consecutive quarter. Twenty-one percent of lenders raised collateral requirements, and 92% expect lower net cash earnings for crop farmers this fall and winter. Nearly half of bankers foresee increased forced sales or liquidations of distressed farm assets. The American Soybean Association projects a third consecutive year of soybean losses in 2025 amid November futures 25%-30% below 2022. Farm production expenses are projected to rise $12 billion to $467.4 billion in 2025.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]