What the heck is this about?

[Canuck_2]

It is a short read wehave but I include a short quote for you.

It talks of the increased number of farmers getting default notices and being forced out.

The tight credit that has roiled the country for nearly two years is taking its toll on farm country. Farmers already are struggling with other problems, such as zigzagging commodity prices.

"I've seen farmers getting cash advances on their credit cards to put in their crops," Grugel said.

Nationally, farm loan delinquencies have been edging up and have hit a 17-year high. For instance, 2.3 percent of all agricultural production loans made by commercial banks were past due, up from 1.3 percent a year ago, according to the Federal Deposit Insurance Corp. (In the depths of the 1980s farm crisis, those delinquencies reached 8 percent.)

[schnurrbart]

I am, I freely admit, not much when it comes to pure economics but one statement you made really baffles me and would like you to explain it.  You said, "pay off a piece of property and lose up to 45% of the money to taxes."  How is that?  Thanks.

[Red Steele]

I agree with you...if someone wants to refer to another article, they should give a brief condensed version of it. Saves us the time to link, and we can also enjoy their editorial wit.

[BA Deere]

Do I detect a little schadenfreude from you ol` Swede?

[bruce MN]

No..none at all. I'm mortified by it all. We don't neeed any more rural disruption. And FWIW, from an overview of the pool that I know, work with and am related to I'm predicting that the numbers given in the article are very, very conservative.

The old saw from the depressions of the late 1890s about somebody "losing the farm over a pair of mules" could be in play here. Ag credit can't stay immune form the rest of the real estate complex forever. And commodities, which ultimaltely support equities, are always the last to decline in a sinking situation. (Check corn price from 1929 and 1931.)

What are your views on the article?  I thought it was good reporting. The Startrib staff has developed an unusually good feel for the realities of ag. They actually take the time to talk to the people that they cover and don't try to paint all ag black. Very rare and uncharacteristic for a metro newspaper, as most often most of them only "report" sensationalist and hyper-greenie views.