THE ongoing financial crisis has so far not had a dramatic effect on farmers' ability to secure credit, US Department of Agriculture Chief Economist Joe Glauber says.
"Anecdotally, there are some tightening conditions, but there are funds out there," Glauber said, citing quarterly reports from the Federal Reserve banks for the Chicago and Kansas City districts.
When the credit crisis first exploded in the fall, industry experts said farmers were not seeing dramatically tighter credit conditions due to the relative health of rural community banks, and the conservative attitude of farmers who absorbed lessons from the 1980s, when debt-to-asset ratios soared.
But some analysts are now saying there are increasing anecdotal reports of growing concerns among farmers about credit.
"The presumption is that lenders are increasing certain requirements, but you've got to remember that a lot of producers are in better shape" than those in other sectors of the economy, Glauber said after giving a speech at the annual Agricultural Outlook forum yesterday.
He said livestock and dairy producers in particular are getting squeezed.
Glauber said producers' asset values are not forecast to drop sharply, and that in certain areas, such as Wisconsin, farmland prices have continued to climb.
The USDA forecasts farm assets to rise by 1.6 per cent in 2009, the smallest increase since 1991.
Glauber said going into 2009, farm debt is equal to 9.1% of total assets, compared to more than 20 per cent in the mid 1980s and 15.2 per cent in 1998.
-By Ian Berry, Dow Jones Newswires
