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Banks that serve U.S. farmers are increasingly restructuring existing loans and boosting the collateral needed for new ones as the numbers of late and missed payments have risen, Bloomberg News reported. While regional banks are healthy, they’re clearly boosting their defenses against the risks they face. In March, a report by First Midwest Bank in Chicago showed past-due agricultural loans up 287 percent in 2018 over the previous year. Meanwhile, cases handled by the Iowa Mediation Service involving farmers unable to make payments rose 20 percent. While regional banks are healthy, they’re clearly boosting their defenses against the risks they face. In March, a report by First Midwest Bank in Chicago showed past-due agricultural loans up 287 percent in 2018 over the previous year. Meanwhile, cases handled by the Iowa Mediation Service involving farmers unable to make payments rose 20 percent. Farmer bankruptcies in six Midwest states rose 30 percent to 103 in 2018, according to the Federal Reserve Bank of Minneapolis. To hold back the tide, Farmers National Bank in Prophetstown, Illinois is restructuring more and more loans to keep growers solvent while trimming the bank’s own risk. Conditions that prompted lenders to ask for more collateral rose 2.5 percent in the fourth-quarter of 2018 from a year earlier, according to a survey by the Federal Reserve Bank of Kansas City, which covers parts of seven states. Meanwhile, as of January 1, average interest rates on farm operating loans had edged up to 6.07 percent, its highest level since the second quarter of 2010, according to February report by the Federal Reserve Bank of Chicago. Read more. 

As bankruptcy rates among American farmers near record highs, U.S. Senators Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.) and Tina Smith (D-Minn.) reintroduced the "Family Farmer Relief Act of 2019" on March 27 to raise the chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program. Click here to read the full text of S. 897. 

Congress may make another attempt to reform the chapter 12 bankruptcy law to allow more financially distressed family farmers to restructure debts and remain in operation, CNBC.com reported. Congress has made several changes to the Bankruptcy Code over the years but experts suggest the average size of family farms has grown and the debt caps on chapter 12 have not kept up with the times. In December, Sens. Charles Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) introduced a measure to help financially struggling family farmers by proposing to increase the bankruptcy debt limits allowed in chapter 12 filings to $10 million from roughly $4.1 million. The measure didn’t pass, but a spokesperson for Klobuchar, a 2020 presidential candidate, told CNBC yesterday that she plans to reintroduce the bill. Similarly, Grassley was quoted last week as promising to “push ahead with reforms to chapter 12 protection for family farmers that I have been developing as former chairman of the Senate Judiciary Committee.”

U.S. businesses paid an additional $2.7 billion in tariffs in November 2018, according to data from a coalition of U.S. business groups fighting President Donald Trump’s trade tariffs, Reuters reported. The group, which brands itself “Tariffs Hurt the Heartland” and includes the Americans for Free Trade coalition and Farmers for Free Trade, crunches tariff payment data nationally and by state. The data is part of a monthly series called the Tariff Tracker, which the group releases in a tie-up with The Trade Partnership, a Washington-based international trade and economic consulting firm. The monthly import data, it said, is calculated using numbers from the U.S. Census Bureau, and the monthly export data is compiled using numbers from the Census Bureau and the U.S. Department of Agriculture. The November numbers are the latest government ones available due to the recent U.S. government shutdown.

Just when U.S. farmers thought they were catching a break with a second round of federal aid, now there’s concern the impasse in Washington could hamper payments, Bloomberg News reported. After crop prices tumbled amid the U.S.-China trade war, the Trump administration made good on its promise to help farmers by approving the second-round payments this month. The U.S. Department of Agriculture has said the total aid could reach as much as $12 billion, with soybean growers taking the biggest share. But the partial U.S. government shutdown is raising questions about delays for the plan, called the market facilitation program. On Dec. 21, the USDA said in a statement that the aid would continue during the first week of a shutdown, but payments would halt after that for producers who hadn’t certified production. The deadline to apply for the program is Jan. 15.

The U.S. government will make a second, multibillion dollar payment to U.S. farmers struggling against tariffs on American soybeans, pork and dairy products, the Wall Street Journal reported. The move soothed nerves in the U.S. Farm Belt, after some farmers wondered whether the payments would come as trade relations improved between the U.S. and top food-importing countries Mexico and China. Despite a new North American free trade deal signed in November and this month’s trade truce between the U.S. and China, farmers and livestock producers continue to face low prices for many of their goods, pushed down by tariffs that remain in effect. "This assistance will help with short-term cash flow issues as we move into the new year,” said Agriculture Secretary Sonny Perdue. However, Perdue also called it the “final” round of trade-related government payments to farmers. The U.S. Department of Agriculture estimated yesterday that both rounds of payments would direct a total of $9.6 billion to farmers hit by tariffs on everything from pork chops to soybeans and cheese.

America’s cheese hoard continues to balloon to unprecedented levels, as producers fear the mountain could grow further and put even more dairy farmers out of business, the Wall Street Journal reported. About 1.4 billion pounds of American, cheddar and other kinds of cheese is socked away at cold-storage warehouses across the country, the biggest stockpile since federal record-keeping began a century ago. Driving the glut are cheese makers who ramped up production before trade tensions abroad tamped down demand for many of their products. Shifting tastes at home have further changed the outlook for traditional cheese makers. Many are paying to store their excess cheese in hopes demand and prices will improve. Cheese, which has a limited shelf-life, is less valuable once it spends weeks in cold-storage, and producers are concerned that the glut and price drop that has come with it could eat into profits. Spot market prices for 40-pound blocks of cheddar fell around 25 percent this year from 2014 prices, while 500-pound barrels typically used for processed cheese declined 28 percent. Cheese exports have suffered since Mexico and China, major dairy buyers, instituted retaliatory tariffs on U.S. cheese and whey. Cheese shipments to Mexico in September were down more than 10 percent annually, according to the U.S. Dairy Export Council trade group, and shipments to China were down 63 percent annually.

The White House is delaying a second round of payments from a $12 billion aid package for farmers stung by a trade dispute between China and the United States, amid optimism China will soon resume buying U.S. soybeans, Reuters reported. U.S. President Donald Trump’s Office of Management and Budget at the White House is holding up approval of the payments due to concern over the cost of the program, and wants to see if the trade issues with China get resolved. The U.S. Department of Agriculture in July had authorized up to $12 billion in aid for farmers and ranchers hit by the fallout from Trump’s escalating trade war with China, a major buyer of American agricultural products, and the agency outlined payments for the first half last August. Agriculture Secretary Sonny Perdue said on Dec. 3 that OMB was deliberating on a second round of trade aid, and that it could be outlined by the end of that week. USDA spokesman Tim Murtaugh told Reuters on Tuesday the agency was still in the “final stages” of the process of approving the second tranche of payments.

Congress is on track to pass a five-year farm bill this week that leaves out controversial proposed work requirements for food-stamp recipients, imperiling the support of some conservative House Republicans but opening the door for Democrats in both chambers to support the compromise bill, the Wall Street Journal reported. For months, lawmakers have struggled to reconcile differences between the House and Senate versions of the farm bill, a mammoth piece of legislation that authorizes the food-stamp program for low-income Americans in addition to funding agricultural subsidies, crop insurance, research efforts and more. The Republican-authored House version of the bill tightened work requirements for food-stamp recipients; it passed the chamber along party lines. The Senate version omitted those provisions and passed with wide bipartisan support. The compromise bill released yesterday doesn’t include the tighter work requirements, but retains measures from the House version of the legislation aimed at preventing fraud and duplication. The bill will cost $867 billion over 10 years, according to House committee staff.

Key lawmakers said yesterday that they have reached a tentative deal on a massive farm bill, breaking a months-long impasse over legislation that doles out more than $400 billion in federal funds for farm subsidies, the Washington Post reported. Lawmakers have been at odds over a House GOP proposal to boost work requirements for food stamp recipients, but Sens. Pat Roberts (R-Kan.) and Debbie Stabenow (D-Mich.), the leaders of the Senate Agriculture Committee, said that they had resolved the debate over the work requirements and other outstanding issues. The senators declined to offer details of the emerging compromise, cautioning that it was not final and could change pending completion of cost analyses and legislative language. Nonetheless, both expressed optimism that the legislation could pass before the conclusion of Congress’s lame-duck session next month. Lawmakers faced pressure from farmers and ranchers to get a deal done, particularly amid a steep decline over the last several years in farm incomes as commodity prices have sagged, said Dale Moore, executive vice president of the American Farm Bureau Federation, an industry group.