Demand for farm loans surges amid low crop, cattle prices

Associated Press ^ | Dec. 1, 2015 2:54 PM EST | Roxana Hegeman

[Olog-hai]

The nation's net farm income is the lowest since 2002, and with another year of low commodity prices, demand for agriculture loans is surging as farmers struggle to make ends meet. [...]

Agricultural lenders say they are seeing people who had operating loans requesting larger ones, and some who had operated with cash are borrowing money. But it's unlikely the current run on loans will be anything like the farm credit crisis of the 1980s, when those who survived the significant year-to-year losses were without large debts to repay. ...

[glorgau]

Hmmmm, cattle prices are “low” and price of ground beef at the supermarket is still > $4/lb? Methinks there is a bit of a disconnect.

[Farmer Dean]

Cattle prices are a small part of the picture.Depressed grain prices and ever increasing input costs are putting us farmers in a bind.

[Zuben Elgenubi]

Back in the 1950’s, an acre of corn in an exceptional year in Ohio would yield 80 bushels per acre. Now with improved strains, this year farmers are typically getting 250 to 280 bu/acre.

[Mastador1]

the biggest oxygen deprivers are the liberals!

[Kartographer]

Hmmmm, cattle prices are “low” and price of ground beef at the supermarket is still > $4/lb? Methinks there is a bit of a disconnect.

Much like the disconnect right now with the calls to bail out the oil industry by the same people who when there were complaints about $5.00 gasoline claimed it was the American Free Enterprise system at work.

[PAR35]

ever increasing input costs

Fuel prices should be down sharply, and chemicals down significantly. If anything, costs should be moving down, but not as fast as commodities. In addition, with the ending of the drought in much of the country, irrigation costs should be lower, and feed, including hay, should be sharply lower.

The biggest problem may be that they treated abnormally high prices as the new normal, and are having problems as prices return to the baseline.

I do agree with glorgau that retail prices haven't yet tracked the wholesale decline.

[Farmer Dean]

Do some research and get back to me.

[jcon40]

“....ever increasing input costs are putting us farmers in a bind.”

My PG&E electric bills (Central California) for my cold storage (refrigeration)is being charged at

$.39835 per KWH !

WTF do they want me to do turn my refrigeration off during their peak hours ?

A home owner pays about $.15 per KWH
If you are the poor ... which I am, they pay even less .... unless you are a small farm.

.

[PAR35]

I expect I’ve been involved in more Chapter 12s than you have.

[Farmer Dean]

That’s not what I meant.

[Cyman]

How in the hell are “low prices” being seen when I almost have to mortgage the house to go out to a nice steak dinner?

[jjotto]

Beef is a premium product in a world market, the price reflecting the declining value of the dollar. There is also the overlooked extra cost to farmers of increasing government regulation.

[CPT Clay]

I thought cattle prices were high because of the drought.

[Western Phil]

The drought caused many cattle producers to downsize. With a gestational period the same as a human, it takes a long time time for beef production to recover from a drought.

[B4Ranch]

The adage that the cure for high prices is "High Prices" is evident this year in beef markets. Finished cattle prices reached record highs around $170 in late 2014 and early spring of 2015. Prices then fell below $120 by October. Prices have fallen $50 per hundredweight in what must be the greatest decline ever. Interestingly, the decline in beef prices was preceded by a similar decline in live hog prices from mid-2014 into early 2015.

http://www.cattlenetwork.com/news/industry/weekly-beef-outlook-high-prices-cure-high-prices