The credit crisis roiling financial markets may affect next year's corn, wheat and soybean output should farmers find themselves unable to get loans to buy seeds and fertilizer, U.S. Agriculture Secretary Ed Schafer said.
``We certainly could see tight credit having an effect on agricultural production'' in the U.S., Schafer told reporters today after speaking to Department of Agriculture workers in Washington. ``The costs of farming operations today are huge, and that backs up to the banks that have balance sheets that are tight, it backs up to elevators that have credit stretched out.''
Schafer said he has yet to see signs of the credit crunch affecting agricultural operations. The USDA says farmers will reap record profits of $95.7 billion this year while experiencing their highest costs ever. Farm debt levels are also at the lowest since at least 1960, according to government data.
Expenses are projected to rise 16 percent to $294.8 billion, with higher fertilizer, fuel and seed prices biting into profits, the department said in an August report. Adjusted for inflation, costs will be the highest since 1980, before falling crop prices pushed farmers into the biggest agricultural crisis since the Great Depression...MORE