Ag Bankers Are Increasing Collateral

DanIndustry News Release

Cows bankers
Midwest Ag bankers continue to raise serious concerns about the farm economy. An Ag Web Dot Com report says the Rural Mainstreet Index has remained below the neutral growth mark for 15 months in a row. Estimates are 70 percent of rural bankers are increasing collateral for ag loans because of the extended slump in the farm economy. Over the next 12 months, bankers are expecting a default rate of five percent on ag loans. Alan Hoskins of American Farm Mortgage said one of every four farmers is looking at a balance sheet in the red with negative cash flows per 2016 balance sheets. If agriculture sees a repeat of 2016 next year, that number could get worse. Hoskins says, “We may have to change that 25 percent to somewhere in that 35 to 40 percent range. The Rural Mainstreet Index expects one in five farmers to report negative cash flows this year.

From the National Association of Farm Broadcasting news service.