Interest rates?

[kamichel]

So anyone have any insights or thoughts as to what interest rates will now do?
Are we in for a run up in rates?
Commodities are so volatile, interest rates on loans may not be any different.

[agstar77]

Commercial rates are rising in the U.S. GE paid an extra 325 mil to borrow operating funds. This kind of thing will eventually filter down to everyone. There is talk of cash only for Fertilizer just across the border.

[charliep]

Here is a article from my scan of newsletters this am. Source: http://www.cattlenetwork.com/Content.asp?ContentID=256259

Quote - "Canadian Ag Not Yet Affected By Credit Market Instability
WINNIPEG (Dow Jones)--Western Canadian farmers looking to buy some new land, improve their equipment, or simply make ends meet until the next year's harvest, are not yet running into problems securing credit, according to an official with Farm Credit Canada Monday. However, if the global financial crisis escalates or drags on, agriculture could eventually feel the brunt as well.

"At this stage, I'd say it's a very normal credit market in agriculture. Whether it's Farm Credit Canada, the major chartered banks, or credit unions, they're all actively lending into agriculture," said Michael Hoffort, vice president of Prairie Operations with Farm Credit Canada. He said there was no reluctance to provide agriculture loans for the time being.

Looking at all potential areas of investment, Hoffort said the agriculture sector was looking relatively strong at this point.

"We deal with the biggest to the smallest farmers in Canada, and everybody's credit policies are fairly consistent," he said.

As far as the demand for credit products is concerned, Hoffort said it was trending higher in majority of the markets Farm Credit Canada deals with. While the hog and cattle sectors are experiencing some challenges, he said the optimism in grain and oilseeds earlier this year had many producers looking to secure some credit to expand their operations or purchase new equipment. Overall, Hoffort expected the demand for credit to remain steady through the winter months.

However, "agriculture, as good as it's going, it won't be totally insulated if there is a liquidity crunch in the financial markets," said Hoffort. He added that if the U.S. financial crisis escalates or drags on for a long time "at some stage, if there was a shortage of cash to be put into loans, agriculture could see some cost changes on that side of things with the rest of the marketplace."

[bucket]

Is that the same farm credit that borrowed Alfonso gugliania (or whatever that crooks name was) 500000 for a winery. Mark my words farm credit will be tightening up when that crook doesn't make a payment. This is why the financials get in trouble - they lend to crooks or people that tell a good story and *?ck it up for everyone else. My dad could buy a combine on his word by saying he would pay after harvest. He never let anyone down. Try that line today. And its because of lending practices fcc has obviously adapted.

[jensend]

canadian ag is affected by credit market instability. look at the numbers of feeder cattle moving south. it's dropped way off because the buyers down there can't get the funds to fill the feedlots. there is a shortage of feeders in the states but the credit markets are holding back normal business. if this goes on it's going to be a tough market for calves. if the credit woes spread up here and ranchers can't borrow against their calves it will be a really tough market.

[charliep]

An interesting article on surviving in the new world.

Sources: AgWeb.com http://www.agweb.com/get_article.aspx?pageid=146046

Five Ways to Protect Your Farm in the Economy Crunch
10/1/2008


Sara Muri, Top Producer Business & Crops Online Editor

The current state of the U.S. economy may have you a little nervous about the financial future of your farming operation, and probably for a good reason. “It is not business as usual,” says Allen Lash, of Agrisolutions in Brighton, Ill. “This is a new world for farm people.”

Even with the economy’s uncertainty, you can protect your farming business. Agricultural risk and agribusiness experts provide the following methods to position your operation to be safe and profitable.

MAIN POINTS (DETAILS IN THE ARTICLE)

1. Keep the Worrying to a Minimal

2. ‘Bulletproof Your Balance Sheet’

3. Be Willing to Sell Your Crops at High Prices

4. Evaluate Your Business Strategies

5. Have Adequate Working Capital