U.S. Farmers In “Dire Straits”: JPM Warns Of Imminent Liquidity Crunch

Greetings,

(This means hunger is coming to America. This means the very bread of America is now at risk. This means the prophecies of drought & famine out of the Bible is nearing!)

U.S. Farmers In “Dire Straits”: JPM Warns Of Imminent Liquidity Crunch

Tyler Durden: Despite the government’s ‘advice’ to young debt-laden students, the tragedy of the American farmer continues with worryingly pessimistic views on the future of the industry.

With farmland prices falling for the first time in almost 30 years, credit conditions are weakening dramatically and the Kansas City Fed warns that persistently low crop prices and high input costs reduced profit margins and increased concerns about future loan repayment capacity, and JPMorgan concludes, the industry is currently in dire straits with the potential for a liquidity crunch for farmers into 2016.

Not so long ago, US farmland – whose prices were until recently rising exponentially – was considered by many to be the next asset bubble. Then, almost overnight, the fairy-tale ended, and as reported in February, US farmland saw its first price drop since 1986.

Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling?

“I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets — year-in and year-out.”

Looking ahead, very few bankers expect price appreciation and more than a quarter of survey respondents expect cropland values to decline further in the next three months.

And now, The Kansas City Fed warns that Agricultural credit conditions are worsening rapidly.

Credit conditions in the Federal Reserve’s Tenth District weakened as farm incomedeclined further in the first quarter of 2015.

Persistently low crop prices and high input costs reduced profit margins and increased concerns about future loan repayment capacity.

Funds were available to meet historically high loan demand, but loan repayment rates dropped considerably.

Although profit margins in the livestock industry have remained stable, most bankers do not expect farm income or credit conditions to improve in the next three months.

On a more regional level, farm income declined in all District states except Oklahoma.

In Oklahoma, farm income has steadily improved over the last three years due to revenue from mineral rights and cattle production but remained unchanged in the first quarter of 2015…More Here

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