The U.S.D.A.’s moratorium on Farm Service Agency farm foreclosures ended this fall. Secretary of Agriculture Tom Vilsack instituted the moratorium last spring on loans that involved the U.S.D.A. agency.
“That moratorium has expired, but we are now encouraging our Farm Service folks to reach out to producers who either have guaranteed loans or who have direct loans with us to figure out if there are ways in which those loans can be restructured, refinanced in a way that makes it more feasible and easier for those operations that have been stressed to continue in business,” Vilsack says.
The Iowa Mediation Service — a nonprofit program that helps borrowers work with lenders to refinance loans and avoid foreclosures — expects farm foreclosures to increase in 2010. This past year, in 2009, the agency worked with about a thousand farmers hoping to avoid foreclosure.
One headache in the coming year is farmers may find it more difficult to obtain operating loans. Vilsack has met with the nation’s treasury secretary to talk about the issue.
“I think you’ve begun to see that there’s beginning to be a bit more pressure from the treasury department and from the president on banks to basically lend the money that they have,” Vilsack says. “The banks are not without resources. They actually have resources, but they are investing it in very conservative investments right now and I think they need to begin to loosen up the credit a little bit and I think we’ve brought to the attention of the treasury secretary the challenges that ag has.”
According to data from Iowa State University, livestock farmers have been losing money since the fourth quarter of 2007. In the past year, pork and beef exports have been down, contributing to the livestock industry’s financial woes. Vilsack says he and other negotiators have made some headway with opening China to more U.S. pork, for example.
“You can restructure all you want and provide refinancing, but at the end of the day what’s going to make the difference is continuing to have healthy markets,” Vilsack says, “which is why we continue to reach out to some of our foreign friends, our trading friends to encourage them to reduce barriers, to eliminate barriers that are being constructed periodically.”
This past week, Vilsack met with Russia’s ag minister to discuss trade barriers the Russians are considering that might impede U.S. poultry and pork sales to Russia.
