Farmers rely on loans to buy and refinance land, as well as pay for operational expenses. Since demand for farm credit continues to grow, farmers increasingly turn to smaller regional and local banks. But lenders are becoming more cautious about lending to farmers, especially since smaller rural banks are more dependent on their farm lending portfolios and can't as easily afford to take on defaulted loans.
Gordon Giese, a 66-year-old corn and dairy farmer in Wisconsin, had to sell most of his cows, his house and a third of his land to pay his farm's debt last year after he couldn't get a loan. "If you have any signs of trouble, the banks don’t want to work with you," Giese told Reuters. "I don’t want to get out of farming, but we might be forced to."