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K.C. Fed economist: 2016 a ‘crucial’ year for some

planting-corn-nebraska corn board 2016The top ag economist with the Federal Reserve Bank of Kansas City says 2016 will be a “crucial” year for some farmers.

Nate Kauffman says unless the farm profit picture shows dramatic improvement in 2016, some producers are going to face “difficult circumstances” going into 2017.

“I think that 2016 really will be a crucial year, because a lot of the working capital that had been built up over the really good years was deteriorated in 2015,” Kauffman says, “and so going into 2016, some of this debt had been restructured, with more carryover debt than what we’ve seen in the past.”

Kauffman says some may find it difficult to continue farming.

“We know that a lot of producers have maybe delayed retirement, or been contemplating when maybe a good time to get out might be—and so I think that there could be more of those kinds of things that we see over the next year.”

The Kansas City Federal Reserve’s latest quarterly report on farm lending activity shows delinquency rates on farm loans ticked up and loan repayment rates dipped in the first quarter.

AUDIO: Nate Kauffman

 

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