USDA extends crop insurance payment deadline as weather delays harvest and farmers continue to struggle - Entrepreneur Generations

As U.S. farmers enter the home stretch on a difficult year, the outlook remains troubling.

The current economic downturn in the agriculture sector echoes the one that led to the farm crisis in the 1980s, Farm Credit Administration Chairman Glen Smith told the House Agriculture Committee on Tuesday. The FCA regulates ag lenders.

Smith said the farm lending system is currently "safe and sound" but said officials are "very concerned and closely monitoring some weakening in credit quality." At a subcommittee meeting, he also compared the current economic climate to that of the early 1980s, "citing economic trends like falling farm income, rising debt-to-asset ratios and concerns about the value of farmland," Ryan McCrimmon reports for Politico's Morning Agriculture. "Farmland values remain largely stable across the country. But that could change, Smith warned in his written remarks to the committee, if larger amounts of farmland go up for sale — like if farm bankruptcy rates continue ticking upward." Smith also noted the role of trade wars in agricultural instability in the late 1970s and early 1980s.

Meanwhile, abnormally wet weather continues to slow harvests, making it likely that some crops won't be harvested this year at all. "Instead, a good deal of corn in Northern states will likely have to wait until the spring of 2020 to be harvested, while soybeans left over winter might not be harvested at all," Ray Grabanski reports for Successful Farming. "That is going to lead to harvest losses much greater than factored so far into USDA numbers."

Within the next two weeks, the corn harvest will be about 76% complete and soybeans 91% complete. It's not likely to go much higher, Grabanski writes: "Most of the corn not harvested never made maturity, and therefore is still very wet (25% to 35% moisture) and it is not economical to harvest now (and no propane is available to dry it)." And very wet soil or snow will probably prevent a higher soybean harvest. But, Grabanski notes, China is buying more soybeans, so commodity prices could go up quickly if the trade war ends.

Almost three-quarters of the rural bankers surveyed for Creighton University's Rural Mainstreet Index reported negative economic impacts from the trade war. The RMI is a monthly survey of bank CEOs in rural areas of a 10-state region where agriculture and energy are essential to the economy: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

The overall index has been barely above growth-neutral for three of the past four months, buoyed by higher grain prices and trade bailout payments, writes Ernie Goss, the Creighton University economist who compiles the report. However, farm- and ranchland prices as well as home prices and retail sales continued to slide, and farm equipment sales, though still low, rose slightly. This marks the 73rd consecutive month that farm equipment sales have been below growth neutral. Overall hiring trends slipped but remained slightly growth positive. "The confidence index, which reflects bank CEO expectations for the economy six months out, slumped to 36.5 from September’s 42.9, and continues to indicate a very negative economic outlook among bankers," Goss reports. This is because of the trade war with China and uncertainty about when or if the USMCA will pass.

One banker complained to Goss that it was hard to make predictions because this year's planting and harvesting data isn't known or, if known by the government, made public.

Because of the delayed harvest, the Agriculture Department is granting most farmers a second extension on crop insurance premium due dates, Dan Looker reports for Successful Farming. Normally, payments on spring-planted crops are due September 30 and begin to accrue interest on Oct. 1. The USDA announced in August that it would defer interest until after Nov. 30. Now, the USDA says farmers have til Jan. 31 to make interest-free payments on crops planted last spring. But, farmers should beware: if their payments are even a day late after Jan. 31, they'll be charged the retroactive interest that would have accrued since the original due date of Oct. 1.

from The Rural Blog https://ift.tt/2O5EhXE USDA extends crop insurance payment deadline as weather delays harvest and farmers continue to struggle - Entrepreneur Generations

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