Death comes to us all. Life's but a walking shadow | I've been following the various threads below concerning operating loans, lines of credit, debt to asset ratios, etc and the question occurred to me. Given the current and perspective 2016 price of corn, soybeans and wheat, expected costs of production and typical yields it is fairly apparent that there isn't much room for error even for higher yielding farms.
My question is: at what point will Ag lenders limit lending? Will they allow producers to borrow against the better portion of their assets (and risk having to take possession of those assets) or stop lending well short of that? Lenders obviously realize that once the rate of forecloures accelerates all assets start to lose value.
I ask this question because if lenders are conservative they might actually be able to exert some influence on the number of planted acres and thereby maintain higher prices and a healthier farm economy. Or they could be liberal with money and as a consequence contribute to higher planted acres, lower prices and eventually weaker farm economy. Will bankers in effect, save the farmers from themselves? |
Question for Ag lenders & bankers.
