THIS WEEK ON U.S. FARM REPORT
EPISODE # 2049
NOVEMBER 17-18, 2012
Hello and welcome to U.S. Farm Report, I’m John Phipps. Consider this headline: a national banking system is staggering under the weight of farm loans gone sour as farmland prices drop 30% over four years. It seems bankers were lending based on asset values rather than repayment capacity. For those of us of a certain age it sounds like an echo of the 80's in the U.S. But this is a Bloomberg report from this week about the situation in Denmark. While I do not think this is harbinger for American agriculture, it is surprising that bankers anywhere still fall into this trap, let alone a nation as savvy as Denmark. There is something about a bubble that overrides our brains, I guess.
The 2012 drought is having an impact on credit conditions, but it's apparently not impacting the demand for good farmland. That’s the bottom line of a report from two key districts of the Federal Reserve Bank. Breaking it down by states, Iowa had the highest year-over- year increase in the Chicago fed district. And Nebraska was the highest in the Kansas City district. Despite some shrinking farm incomes. Tractor sales were strong last month according to the latest data from the association of equipment manufacturers. Their monthly flash report shows total tractor sales were up 29% from the same month last year. Year to date, they're up 10% over 2011. A House panel says former MF global CEO Jon Corzine caused most of the problems that caused the collapse of the brokerage firm.
Crop watch this week.
Al is in to talk markets with Joe Vaclavik and Iowa farmer Chris Barron.