Johnson Expresses Ongoing Concern in U.S. Senate
The Senate Agriculture Committee yesterday examined the current state of affairs at a hearing about the Farm Credit System (FCS) and the farm sector’s credit outlook.
National Farmers Union President Roger Johnson applauded committee members for making this issue a priority. (Check out our recent post on this issue describing some of the problems.)
“The multi-year trend of low commodity prices coupled with higher input costs is becoming ever more challenging for producers,” he said. “Unfortunately, we are seeing this manifest in weakening credit conditions as it relates to loan repayment rates and lenders restructuring debt to manage credit risk.”
Many producers have already tapped capital from prosperous years and now find themselves with liquidity challenges, he explained. If low commodity prices persist, debt restructuring of operating and equipment costs from short-term to medium and long-term debt may present a real challenge for the farm credit sector.
The hearing featured two panels of witnesses that included the Farm Credit Administration Board, Farm Credit Services of America & Frontier Farm Credit of Omaha, community bankers from Iowa and Kansas, and one producer.
In conjunction with the hearing, NFU joined more than 50 agriculture groups signing a letter in support of FCS and other creditors and the critical role ag lending institutions play in ensuring farmers, ranchers and rural Americans have continued access to competitive credit. NFU independently submitted a statement for the hearing record.