Friday, September 06, 2019

Farmers fall more behind on loans from community banks

"A U.S. banking regulator on Thursday said more farmers were falling behind on loans held by community banks compared to a year earlier and that it was watching risks in the agriculture sector," Jason Lange reports for Reuters

The Federal Deposit Insurance Corporation noted in its quarterly report on U.S. banks that some farmers are struggling because of low commodity prices and farm incomes. Though the FDIC report did not discuss causes, the trade war has depressed commodity prices over the past year as China, once the top buyer of U.S. soybeans, has severely reduced its purchases, Lange reports.

"The FDIC said the share of long past-due farm loans held by community banks, which are major agricultural lenders, was 1.28 percent in the April-June period, up 13 basis points from the same period in 2018," Lange reports. A basis point is 1/100 of 1 percent. Long past-due loans are those "that are at least 90 days past due or which no longer accrue interest because of repayment doubts."

No comments: