While interest rates on farm loans remain near five-year lows, the global credit squeeze continues to make the cost of credit more expensive to producers. Though the farm sector overall remains in better financial shape than other industries, the weak economy is starting to take a toll on producers as well.
According to the quarterly newsletter of the Kansas City Federal Reserve, credit conditions tightened during the first quarter of 2009 in the district, which stretches from western Missouri to Wyoming. This included higher rates of loan extensions and referrals to credit agencies, along with lower repayment rates and increased collateral requirements.
Interest rates on ag loans remain cheaper than a year ago, but reflect problems facing the overall economy.
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