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Archive for May, 2009

Farms Start To Feel Credit Pinch

Tuesday, May 19th, 2009

The credit crunch is trickling down to the farm as agricultural lenders tighten credit standards, leaving some farmers short of money to feed their animals or put in crops as the planting season nears its end.

Deepening slumps in the livestock, dairy and ethanol industries have contributed to mounting troubles for rural lenders. That is making it harder for some growers to borrow money they need to buy seed, fertilizer, equipment and animal feed.

Associated Press

Direct loans outstanding made to farmers for operations by the Farm Service Agency have hit their highest level since the Farm Crisis of the 1980s.

“It’s tough,” said Bruce Drinkman, a 46-year-old dairy farmer in Glenwood City, Wis., who recently had his credit line drastically reduced. “My whole lifetime of work could be destroyed.”

Borrowing is important to farmers this time of year as they try to finish up planting before it’s too late — generally by mid-June, depending on the region. Fertilizer and other costs remain high; farm-production expenses this year are expected to make up 79% of gross farm income, an increase from last year, the Agriculture Department said.

Lending woes are an about-face for the agriculture sector, which has remained a relative bright spot in the economy. Over the past two years, high grain prices and rising global demand for food and the biofuel ethanol lifted farmers’ profits and helped rural businesses and banks. Debt-to-asset ratios for farmers are still at all-time lows.

“A year ago, when I went around the country, ag bankers were saying, ‘I don’t have anything on my credit-watch list,’ ” said economist Michael Swanson of Wells Fargo, one of the nation’s largest agriculture lenders.

Rural lenders tended to be more conservative in their lending and were less exposed to the subprime-housing debacle and other Wall Street tumult. But in recent months they have had to confront spreading troubles in the dairy, poultry, hog and ethanol businesses.

The Federal Reserve Bank of Kansas City said Friday that “turbulent agricultural and macroeconomic conditions” are contributing to “tightened agricultural credit conditions” in its seven-state region. The Minneapolis Fed said much the same in an assessment of its six-state region last month.

The Kansas City Fed said a record percentage of agriculture lenders surveyed in the first quarter reported raising their collateral requirements, a key indicator of credit standards. The same group of respondents reported the lowest farm-income and capital-spending levels in six years, a sign that farmers are tightening their belts.

Last week, Agriculture Secretary Tom Vilsack visited Brush, Colo., and was greeted by hundreds of farmers demanding financial assistance in the wake of the April 10 failure of New Frontier Bank in nearby Greeley.

That failure alone “has shocked our system,” said Gary Teague, a Fort Morgan, Colo., corn farmer, cattle rancher and feedlot operator who banked at New Frontier and is now scrambling to find a new lender.

Mr. Drinkman, the Wisconsin dairy farmer, and his wife opted to cash out her individual retirement account to buy corn seed and meet other dairy-related expenses when they couldn’t find a lender willing to replace the credit pulled back by Independence State Bank.

“It’s not fair to us to basically pull the rug out from under us,” Mr. Drinkman said.

Dennis Meyer, president and chief executive of Independence Bank of Independence, Wis., said he couldn’t comment on individual customers, but that his bank considers each prospective borrower’s cash-flow projections and ability to service debt. “If it isn’t there, it’s really not right for the lender to say, ‘We have enough collateral, and we’ll just keep going with you,’ ” Mr. Meyer said.

He cited the 1980s farm crisis, when a combination of excessive debt and high interest rates produced a wave of foreclosures and farmer suicides. “I’d rather have somebody upset with me and lose their business than to sell them out and go through those types of things again,” Mr. Meyer said.

Loan applications at the federally backed Farm Service Agency, a lender of last resort, have surged to a 20-year high as farmers seek help after being turned away by traditional lenders. As of April 30, the agency had made about $728 million of direct operating loans for the fiscal year ending Sept. 30, up nearly 70% from a year earlier.

The Farm Credit System, a federally chartered network of five banks and 90 borrower-owned associations, reported a nearly 20% decline in its first-quarter 2009 combined net income.

Net income at AgStar Financial Services, an agricultural and rural lender based in Mankato, Minn., dropped 56% in the first quarter of 2009, while its provisions for loan and lease losses soared to $16.9 million, up from $713,000 the previous year.

Rodney W. Hebrink, AgStar’s chief financial officer, said strong performance at the bank over the past few years meant a contraction was foreseeable. “When you start at the best you’ve ever been, there’s only one place to go,” he said. Mr. Hebrink said the bank hasn’t tightened its lending standards.

Douglas R. Stark, president and chief executive at Farm Credit Services of America, based in Omaha, said that while he thinks the agriculture economy is still “relatively strong,” he is seeing more farm customers who require some sort of loan restructuring.

Mr. Stark’s bank saw a 41% drop in net income for its first quarter and a $29.5 million provision for loan losses, up from $583,000 the year prior. “Certainly, we would look at new requests for credit with a much more critical eye,” he said.

Write to Lauren Etter at lauren.etter@wsj.com

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Export Sales Highlights

Thursday, May 14th, 2009

Export Sales Highlights

This summary is based on reports from exporters for the period May 1-7, 2009. 

Wheat:  Net sales of 102,600 metric tons were down 60 percent from the previous week and 45 percent from the prior 4-week average.  Increases reported for Japan (58,300 MT, including 1,500 MT switched from unknown destinations), Nigeria (25,200 MT), Haiti (15,300 MT, including 15,000 MT switched from unknown destinations), Mozambique (6,600 MT, including 6,500 MT switched from unknown destinations), and Mexico (4,800 MT), were partially offset by decreases for unknown destinations (20,000 MT).  Net sales of 131,500 MT for delivery in 2009/10 were primarily for Yemen (58,000 MT), unknown destinations (45,000 MT), and the Philippines (24,000 MT).  Exports of 311,100 MT were up 16 percent from the previous week, but down 17 percent from the prior 4-week average.  The primary destinations were Japan (94,500 MT), the Philippines (41,000 MT), Nigeria (40,800 MT), Colombia (28,400 MT), South Korea (25,500 MT), Venezuela (22,400 MT), and Mexico (19,600 MT).   

Corn:  Net sales of 936,800 MT were up 59 percent from the previous week, but down 4 percent from the prior 4-week average.  Increases reported for Japan (455,700 MT, including 139,200 MT switched from unknown destinations and decreases of 26,900 MT), Taiwan (205,600 MT, including 4,000 MT switched from unknown destinations and decreases of 12,500 MT), Guatemala (76,000 MT), Colombia (44,300 MT), Costa Rica (23,000 MT), and Honduras (22,000 MT), were partially offset by decreases for the French West Indies (3,500 MT).  Net sales of 246,000 MT for delivery in 2009/10 were for unknown destinations (176,000 MT), Jamaica (30,000 MT), Cuba (25,000 MT), and Mexico (15,000 MT).  Optional origin sales of 8,000 MT for 2009/10 delivery were for Costa Rica..  Exports of 1,272,300 MT–a marketing-year high–were up 61 percent from the previous week and 45 percent from the prior 4-week average.  The primary destinations were Japan (553,600 MT), South Korea (173,400 MT), Mexico (158,400 MT), Taiwan (141,400 MT), Egypt (66,000 MT), Venezuela (47,600 MT), and Panama (29,100 MT).   

Barley: There were no sales reported during the week.  Exports of 3,300 MT were for Canada (3,100 MT) and Mexico (200 MT). 

Sorghum:  Net sales of 11,300 MT were primarily for Japan (5,000 MT), Mexico (3,300 MT), and unknown destinations (3,000 MT).  Exports of 56,400 MT were mainly to Mexico (40,200 MT) and Japan (16,100 MT).   

Rice:  Net sales of 46,900 MT were down 6 percent from the previous week, but up 23 percent from the prior 4-week average.  Increases reported for Mexico (19,100 MT), Costa Rica (9,600 MT), Jordan (6,700 MT), Haiti (4,600 MT), Saudi Arabia (2,500 MT), Canada (1,300 MT), and Australia (1,000 MT), were partially offset by decreases for Colombia (1,500 MT) and Guatemala (500 MT).  Exports of 85,000 MT were up 6 percent from the previous week and 32 percent from the prior 4-week average.  The primary destinations were Mexico (18,400 MT), Haiti (15,500 MT), Nicaragua (12,800 MT), Japan (9,400 MT), Guatemala (8,100 MT), El Salvador (5,700 MT), Costa Rica (5,200 MT), and Canada (4,000 MT).   

Soybeans:  Net sales of 401,900 MT were down 39 percent from the previous week and 45 percent from the prior 4-week average.  Increases were primarily for Mexico (153,700 MT), China (132,300 MT), Turkey (82,100 MT), Tunisia (25,300 MT), Canada (21,400 MT), and Indonesia (20,300 MT).  Decreases were reported for unknown destinations (94,200 MT) and Italy (19,000 MT).  Net sales of 353,000 MT for 2009/10 delivery were for China (178,000 MT) and unknown destinations (175,000 MT).  Exports of 442,200 MT were up 14 percent from the previous week, but down 5 percent from the prior 4-week average.  The primary destinations were China (176,000 MT), Mexico (115,200 MT), Japan (41,200 MT), Turkey (35,200 MT), Tunisia (22,300 MT), Indonesia (15,600 MT), and Colombia (9,900 MT). 

Soybean Cake and Meal:  Net sales of 260,100 MT were up 92 percent from the previous week and 48 percent from the prior 4-week average.  Increases were reported for Turkey (61,200 MT), unknown destinations (53,600 MT), Greece (41,000 MT), Latvia (33,000 MT), Guatemala (23,900 MT), and Canada (8,900 MT).  Decreases were reported for the French West Indies (1,000 MT).  Net sales of 78,700 MT for delivery in 2009/10 were for Turkey (63,000 MT), unknown destinations (15,000 MT), and Canada (700 MT).  Exports of 123,100 MT were up 44 percent from the previous week, but down 13 percent from the prior 4-week average.  The primary destinations were Cuba (22,000 MT), the Philippines (16,900 MT), Canada (15,600 MT), Panama (11,100 MT), Peru (11,000 MT), and the Dominican Republic (10,800 MT).  

Soybean Oil:  Net sales of 20,200 MT were primarily for the Dominican Republic (18,000 MT), El Salvador (1,400 MT), and Canada (800 MT).  Decreases were reported for Mexico (200 MT).  Exports of 43,800 MT were down 48 percent from the previous week, but up 19 percent from the prior 4-week average. The primary destinations were India (40,000 MT), Jordan (1,500 MT), and Mexico (1,300 MT).  

Cotton:  Net Upland sales of 53,600 running bales were down 53 percent from the previous week and 76 percent from the prior 4-week average.  Increases were reported for Turkey (49,300 RB), Thailand (7,800 RB), Mexico (4,700 RB), Hong Kong (3,500 RB), Pakistan (2,500 RB), Peru (800 RB), and Taiwan (700 RB).  Decreases were reported for Indonesia (12,900 RB), Malaysia (3,400 RB), and Vietnam (1,500 RB).  Net sales of 23,300 RB for delivery in 2009/10 were for Indonesia (12,200 RB), South Korea (7,100 RB), Turkey (2,500 RB), and Mexico (1,500 RB).  Optional origin sales of 16,100 MT were for Turkey.  Exports of 228,100 RB were up 46 percent from the previous week and 23 percent from the prior 4-week average.  The primary destinations were China (63,700 RB), Turkey (43,500 RB), Pakistan (19,000 RB), Mexico (16,300 RB), Taiwan (15,800 RB), and Hong Kong (12,400 RB).  Net American Pima sales of 2,100 RB were for Pakistan (1,200 RB), Italy (500 RB), Bangladesh (400 RB), and India (400 RB).  Decreases of 400 RB were reported for Germany.  Exports of 5,700 RB were mainly to China (2,200 RB), Pakistan (900 RB), Turkey (900 RB), and Germany (700 RB). 

Hides and Skins:  Net sales of 795,700 pieces were down 17 percent from the previous week, but up 11 percent from the prior 4-week average.  Whole cattle hide sales of 787,900 pieces were primarily for China (375,500 pieces), South Korea (210,900 pieces), Taiwan (86,500 pieces), Thailand (36,300 pieces), and Mexico (24,200 pieces).  Exports of 601,600 pieces were up 4 percent from the previous week, but unchanged from the prior 4-week average.  Whole cattle hide exports of 594,800 pieces were primarily to China (297,300 pieces), South Korea (112,600 pieces), Taiwan (76,400 pieces), Italy (31,600 pieces), Mexico (28,000 pieces), and Hong Kong (19,200 pieces). 

Net sales of 54,600 wet blues were down 42 percent from the previous week and 38 percent from the prior 4-week average.  The primary destinations were Mexico (26,300 grain splits and 3,900 unsplit), China (15,100 unsplit), Vietnam (4,800 unsplit), and Taiwan (2,300 unsplit).  Exports of 130,100 hides were up 6 percent from the previous week and 7 percent from the prior 4-week average.  The primary destinations were China (46,100 unsplit and 11,400 grain splits), Italy (27,400 unsplit), Mexico (15,900 grain splits and 4,200 unsplit), and Indonesia (6,800 unsplit).  Net sales of splits totaling 174,900 pounds resulted as increases for China (131,100 pounds) and Taiwan (44,200 pounds) were partially offset by decreases for South Korea (400 pounds).  Exports of 365,700 pounds were down 20 percent from the previous week, but up 17 percent from the prior 4-week average.  The destinations were South Korea (178,600 pounds), Hong Kong (100,000 pounds), and China (87,100 pounds). 

Beef:  Net sales of 8,700 MT were primarily for Mexico (3,200 MT), Canada (2,700 MT), Japan (1,100 MT), Hong Kong (900 MT), and Taiwan (700 MT).  Exports of 9,300 MT were mainly to Mexico (4,100 MT), Canada (1,500 MT), Japan (1,300 MT), Taiwan (700 MT), Vietnam (700 MT), and South Korea (600 MT).

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U.S. monthly soybean crush - NOPA

Thursday, May 14th, 2009

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Export Sales Highlights

Thursday, May 7th, 2009

This summary is based on reports from exporters for the period April 24-30, 2009.

 Wheat:

Net sales of 254,700 metric tons were up 79 percent from the previous week and 49 percent from the prior 4-week average. Increases reported for Japan (71,700 MT), Iran (60,000 MT), Indonesia (57,500 MT, switched from unknown destinations), the Philippines (53,400 MT), Mexico (22,300 MT), and Italy (11,700 MT), were partially offset by decreases for unknown destinations (50,700 MT). Net sales of 131,600 MT for delivery in 2009/10 were primarily for the Philippines (78,100 MT), Venezuela (20,000 MT), and Mexico (17,500 MT). Decreases were reported for South Korea (1,000 MT). Exports of 268,800 MT were down 26 percent from the previous week and 38 percent from the prior 4-week average. The primary destinations were Thailand (49,500 MT), Nigeria (46,900 MT), Venezuela (42,900 MT), Japan (30,500 MT), South Korea (25,100 MT), Mexico (17,800 MT), and Honduras (17,100 MT).

Corn:

Net sales of 588,700 MT were down 52 percent from the previous week and 46 percent from the prior 4-week average. Increases reported for unknown  tinations (174,800 MT), Japan (116,100 MT, including 33,100 MT switched from unknown destinations), Mexico (115,500 MT), Cuba (100,600 MT), El Salvador (22,800 MT, including 20,400 MT switched from Guatemala), the Dominican Republic (19,500 MT), and Colombia (18,000 MT), were partially offset by decreases for Guatemala (25,900 MT). Net sales of 22,400 MT for delivery in 2009/10 were for Mexico. Optional origin sales of 15,000 MT were for El Salvador. Exports of 790,100 MT were down 6 percent from the previous week and 16 percent from the prior 4-week average. The primary destinations were South Korea (236,500 MT), Mexico (115,100 MT), Taiwan (91,400 MT), Japan (85,700 MT), Venezuela (71,100 MT), Egypt (62,700 MT), and Kenya (30,900 MT).

Barley:

Net sales reductions of 200 MT were for Japan. Exports of 500 MT were for Taiwan (300 MT) and Mexico (200 MT).

Sorghum: Net sales of 21,400 MT for Japan (16,700 MT, including 6,200 MT switched from unknown destinations) and Mexico (11,100 MT), were partially offset by decreases for unknown destinations (6,300 MT). Exports of 74,800 MT were mainly for Mexico (59,100 MT) and Japan (15,600 MT).

Rice: Net sales of 49,700 MT were up 1 percent from the previous week and 36 percent from the prior 4-week average. Increases were reported for Costa Rica (17,600 MT), Nicaragua (13,000 MT), Mexico (12,400 MT), Guatemala (5,000 MT, including 4,000 MT switched from El Salvador), and the United Kingdom (2,000 MT). Decreases were reported for unknown destinations (8,900 MT). Exports of 80,400 MT were double the previous week and 15 percent above the prior 4-week average. The primary destinations were Japan (26,100 MT), Nigeria (15,100 MT), Mexico (12,700 MT), El Salvador (6,700 MT), and Haiti (5,000 MT).

 

 

 

Soybeans

: Net sales of 654,400 MT were down 22 percent from the previous week and 3 percent from the prior 4-week average. Increases were primarily for China (197,900 MT), Egypt (123,600 MT), unknown destinations (107,200 MT), Mexico (105,100 MT), Turkey (36,000 MT), and Taiwan (30,000 MT). Net sales of 121,000 MT for 2009/10 delivery resulted as increases for unknown destinations (124,000 MT) were partially offset by decreases for Japan (3,000 MT). Exports of 386,400 MT were up 38 percent from the previous week, but down 25 percent from the prior 4-week average. The primary destinations were China (225,600 MT), Egypt (47,100 MT), Mexico (25,900 MT), South Korea (21,000 MT), Taiwan (19,100 MT), Colombia (18,300 MT), and Indonesia (17,300 MT).

Soybean Cake and Meal

: Net sales of 135,400 MT were down 54 percent from the previous week and 17 percent from the prior 4-week average. Increases were reported for unknown destinations (55,000 MT), Canada (11,700 MT), Mexico (11,200 MT), El Salvador (9,800 MT, including 7,700 MT, switched from Guatemala), and Turkey (8,600 MT). Decreases were reported for Venezuela (1,000 MT). Net sales of 60,100 MT for delivery in 2009/10 were mainly for unknown destinations. Exports of 85,500 MT were down 43 percent from the previous week and 46 percent from the prior 4-week average. The primary destinations were Mexico (18,500 MT), Venezuela (14,900 MT), Canada (12,700 MT), El Salvador (9,800 MT), and Egypt (8,900 MT).

Soybean Oil

: Net sales of 34,600 MT were primarily for India (21,600 MT, including 10,000 MT switched from unknown destinations), Morocco (15,700 MT, switched from unknown destinations), and Mexico (11,700 MT). Decreases were reported for unknown destinations (17,300 MT). Exports of 84,000 MT–a marketing year high–were up noticeably from the previous week and the prior 4-week average. The primary destinations were India (56,600 MT), Morocco (15,700 MT), and Mexico (3,100 MT).

Cotton:

Net Upland sales of 113,500 running bales were down 47 percent from the previous week and 55 percent from the prior 4-week average. Increases were reported for Turkey (55,600 RB), Indonesia (17,600 RB), Thailand (12,000 RB), China (9,000 RB), Taiwan (8,500 RB), Vietnam (7,000 RB), India (5,500 RB), and Singapore (3,300 RB). Decreases were reported for Peru (11,500 RB), Hong Kong (2,200 RB), unknown destinations (900 RB), and El Salvador (400 RB). Net sales of 22,500 RB for delivery in 2009/10 for South Korea (21,200 RB), China (3,500 RB), and Thailand (1,300 RB), were partially offset by decreases for Chile (3,500 RB). Exports of 420,500 RB–a marketing year high–were up 45 percent from the previous week and 61 percent from the prior 4-week average. The primary destinations were China (125,800 RB), Turkey (54,900 RB), Pakistan (47,800 RB), Indonesia (28,900 RB), Vietnam (26,800 RB), and Taiwan (24,500 RB). Net American Pima sales of 6,900 RB were mainly for Pakistan (1,300 RB), Turkey (1,300 RB, switched from unknown destinations), and Brazil (1,300 RB).  Exports of 3,300 RB were mainly to Hong Kong (800 RB), Taiwan (500 RB), and Germany (500 RB).

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