The FCS’s issuance of short-term securities, called discount notes, nearly doubled during the first quarter, rising by $17 billion between the end of 2019 and March 31, 2020. That increase accounted for 80 percent of the FCS’s first quarter rise in total system-wide debt outstanding.
Browsing: Farm Credit System
In a recent column in the Kansas Banker magazine, Sen. Jerry Moran (R-Kan.) urged support for an ABA-advocated bill that would end taxation of interest earned from agricultural real estate loans.
In January, the Farm Credit Administration proposed two potentially significant regulations that could have mixed…
By Bert Ely American agriculture is experiencing extraordinary financial stress, unlike anything farmers and ranchers…
With the farm economy in the midst of a prolonged downturn, the primary concern among ag lenders in 2019 was credit quality and the deterioration of agricultural loans, according to the latest agricultural lenders survey conducted by the American Bankers Association and Farmer Mac.
The FCS, America’s least known government-sponsored-enterprise, has an excessively complex and increasingly obsolete organizational structure. … Simplifying the structure of the FCS would improve its operating efficiency, which presumably would benefit its member/borrowers, while strengthening the FCA’s safety-and-soundness regulation of the FCS.
In a white paper circulated recently on Capitol Hill, industry veteran Bert Ely called for an overhaul of the Farm Credit System.
As bankers know all too well, farmers and ranchers are suffering from a sustained period of low commodity prices, rising input costs, heavy rains and flooding, and more recently, trade issues that are harming agricultural exports. Not surprising, those factors have hurt farm income, which peaked in 2013. As in past cycles, sustained declines in farm income lead to increased cash-flow problems for farmers and ranchers, which in turn lead to rising credit-quality problems for ag lenders. Even though the FCS focuses on lending to financially stronger farmers, a key question is how well the FCS is acknowledging growing credit-quality problems in its loan portfolio and/or shedding weaker credits by calling loans and not renewing lines of credit.
A recent Farm Credit System loan for $2 million to finance a new Exxon gas station and convenience store in Sheridan, Wy., is almost certainly another example of an FCS lending abuse. This gas station is located at an Interstate highway interchange in a city with a population of about 18,000. While some farmers and ranchers may patronize the gas station and store, they are more likely gas up at a nearby farm co-op store.
In a comment letter to the Farm Credit Administration today, the American Bankers Association called on the agency to make changes to how it reports data on young, beginning ad small farmers.