Farm Credit Services of America Says 2009 Should be “Respectable Year”

• November 3, 2009
• Paul Neiffer

Farm Credit Services of America indicated that setbacks in the swine, dairy and ethanol industries will trim this year’s financial results below the record 2008 results, however, they indicate that 2009 will still be a ‘respectable year’.

This means that patronage dividends will be less than the record $60 million in 2008, but possibly more than the $52 million paid in 2007, Chairman Richard Hall said at its annual meeting in Omaha on Thursday, October 29, 2009 in Omaha.

Farm Credit Services of America serves farmers in the Iowa, Nebraska, South Dakota and Wyoming region.

Preliminary figures show net income of $134 down from the record $173 million in the same period last year.  They indicated that the fourth quarter would not be profitable enough to equal last year’s full amount of $243 million which was a record.

Lower prices for pork, dairy products and ethanol hurt some farmer’s profits in their region.  As a result, Farm Credit’s allowance for possible loan losses total $94 million so far this year, up from $55 million in 2008.

Loans with payment problems increased from $144 million at the end of 2008 to over $265 million as of September 30, 2009.

But CEO Doug Stark indicated that 2009 will still be a good year overall because Farm Credit was able to keep all its loan products, including long-term, fixed-rate loans for farmland, despite turmoil in the nation’s financial markets and the worldwide recession.

Farm Credit issued $3 billion in new loans during the nine-month period and has nearly twice the required capital to back up its loans.

Investors continue to purchase bonds that the national Farm Credit System uses to raise money for loans, so the Omaha based cooperative didn’t have to turn away any loan applicants due to a lack of funds.

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