Farm News, Monday December 12, 2016

Farm Credit System Reports Increasing Stress

The Farm Credit System’s quarterly report says stress levels are still high in the ag sector of the economy. In fact, the operating report says stress levels are high in many different sectors of agriculture. Farm debt levels are still high while cash receipts continue to decline. Interest rates remain low but are slowly beginning to rise. That’s combined with commodity prices that’ll remain low thanks to record or near-record production in corn, soybeans, and wheat. All of these factors are also putting downward pressure on farmland prices. High production numbers are also weighing down price and profit margins in the dairy and protein industries. Overall, the quarterly reports say the Farm Credit System is financially sound and safe, well set against the risky environment in agriculture. The System reported modest loan growth, favorable earnings, and higher capital levels in the first nine months of 2016. The System’s portfolio loan quality is in good shape, but credit risk measures are showing increasing stress.

Bayer/Monsanto Asks Soybean Growers for Support

Monsanto and Bayer officials met together with about 200 members of the American Soybean Association and asked them to support the proposed merger between the two companies. Monsanto Chief Technology officer Robb Fraley and Bayer AG Board Member Liam Condon talked about the potential $66 billion-dollar acquisition of Monsanto with members of the ASA and the United Soybean Board at the USB Winter Meeting in St. Louis. Fraley told the crowd, “I’m here to ask for your support.” Farm Journal research says the merger would create a company controlling nearly 37 percent of the corn seed market and 30 percent of the market for soybean seeds. The deal is in the hands of regulators and won’t close until late next year. Condon reinforced the message he’s already given to regulators: that they’re willing to sell off where the companies overlap if objections are made on anti-trust grounds. Condon said those objections may happen in cotton and canola, saying those are two of the more likely areas.

Source:  NAFB News