U.S. Export loan program

[agstar77]

U.S. records highest export loan guarantee program since it started in 1981. 4.35 Billion since last October. Main benefit to ADM , Cargill and Bunge.

[charliep]

Heres the link for background.

http://bloomberg.com/apps/news?pid=20601087&sid=a28NF4oL_LoA&refer=home

Quote from the first few paragraphs.
Cargill, Bunge Win Most Export Aid Since 1992 as Credit Slows

By Alan Bjerga

May 27 (Bloomberg) -- Cargill Inc., Archer Daniels Midland Co. and Bunge Ltd. are
benefiting from the most government support for farm exports since 1992 as the U.S.
steps up loan guarantees for foreign buyers unable to get credit.

About $4.35 billion was allocated to countries from Jamaica to Turkey through April 6
in the year that started Oct. 1 under the Export Credit Guarantee Program to
underwrite loans that foreign banks grant for the purchase of corn, wheat and other
U.S. farm products, government records show. That’s 40 percent more than in all of
fiscal 2008 and almost triple 2007’s total.

The U.S. is supporting exports after the Department of Agriculture predicted farm
shipments will drop 17 percent in the current fiscal year because of falling commodity
prices. Profit declined 68 percent at Cargill and 98 percent at ADM in the most recent
quarter, as the recession curbed demand for everything from fertilizer to livestock
feed. Bunge reported its second straight loss last month.

The export-guarantee program is “the perfect tool for tight credit,” said Erick
Erickson, an economist in Washington for the U.S. Grains Council, a trade group. It
“allows the U.S. to satisfy some import needs that would otherwise go to other
countries.”

The government loan guarantees, in existence since 1981, are helping finance U.S.
agricultural exports in the face of the worst economic slump since the Great
Depression. Banks and businesses worldwide have lost $1.47 trillion in writedowns
and credit losses in the past 22 months stemming from the collapse of the subprime-
mortgage market.

End quote.

[Fransisco]

In related news the Canadian government will still put western farmers in jail for trying to sell their own wheat. Any attempt to get world prices will be punished with extreme prejudice.

[Hopperbin]

Did I get this right? Its a loan guarantee not a payment to ADM, Cargill, Bunge. My how the media twists words. Trying to make them big corps look bad or something?

[agstar77]

They are not bad, it just points out even these large companies can't sell grain without government help. So much for a free market.

[GrainBeetle]

In related news, Franny's dream-team government changes it's budget deficit projection from zero to $50 billion in 7 months. Probably be 75 billion by August. You sure can pick some winners.

[Fransisco]

"...even these large companies can't sell grain without government help."

Why would you think that?

Could you farm without the agri-invest payment you got? Absolutely, but you probably cashed the check anyways.

Just because government decides to "help" doesn't mean it's needed. More often than not it gets in the way. Obama Motors comes to mind.

[Fransisco]

And what makes you think the current crop of socialists wearing conservative colors would be my dream team?

As far as I can tell Canada doesn't have a Conservative party based on conservative principles.

[Choice2U]

Grainbeetle - I seem to recall 3 parties wanting to throw the present government out on their ear in November because they weren't quick enough on the draw to come up with a stimulus. Yesterday, IGGY was complaining only 6% of the stimulus had gone out...not fast enough. Today he yips about spending too much money. Hypocrites at best!!!!!!!!!!

[Fransisco]

And don't forget beetle,your messiah Iggy believes that every time some drunk drops off his diaper clad kids in a field in the middle of winter it's your fault.

http://www2.macleans.ca/2009/05/07/iggy%E2%80%99s-morally-contemptible-words/