In our post on December 29th, we discussed ag loan rates.  Keeping with the ag loan theme, let’s discuss a recent article posted by DTN/Progressive farmer that deals with the troubles that some operators are having with existing loans.  The article, click here to read, explains that loans that are going into mediation have increased greatly from 2008 to 2009 and look to be increasing again as we head into the new year.  The livestock sector has been hit the hardest, as their overhead and operation costs are higher than a row-crop producer.

Where does this leave borrowers for 2010 and beyond?  The author speculates that many older producers will get out of farming all together, rather than dip into savings and retirement plans to keep their operations going.  While some livestock operators saw their losses partially balanced out by a productive crop year, in many cases they are still came up short.

What are your thoughts on ag loans and where they may be headed?  Share your thoughts with us at eric@loranda.com.

Source:  DTN/The Progressive Farmer