Top Farm Lender Worried by Drought, Politics.
U.S. agriculture has plenty of financial reserves to get through the worst drought in more than 50 years, the top regulator of U.S. farm banks says.
But Leland Strom, chief executive officer of the Farm Credit Administration, said the drought now affecting more than half of U.S. counties has set off alarm bells across the government as grain prices soar, livestock and ethanol and dairy producers are squeezed, and food inflation fears rattle economic planners.
"This has a potentially longer term impact because of that 3, 4, 5 percent rise in food prices," Strom told Reuters in an interview, referring to recent food inflation estimates by the U.S. Agriculture Department and Federal Reserve. . .
This summer's stalemate in Congress over finishing a new five-year U.S. farm bill does not bode well for negotiations on big tax hikes and spending cuts due at end-year, especially with the November election hardening postures in Congress, he said.
"I know the staffs of the ag committees are supposedly back in Washington working furiously while all the members of the chambers are out on the August recess," Strom said. "They have got 12 or 13 legislative days on the calendar between now and the election. That's not a big time window for them to finish a farm bill."
The current farm bill expires on September 30.
"For farmers and ranchers the only thing they really ask for is: give us certainty so we know and can plan to put in this coming fall's wheat crop, plan for next spring's corn and soybean crop, rice crop. Give us some idea of certainty," said Strom, who owns a farm in northern Illinois.
http://www.nytimes.com/reuters/2012/08/14/business/14reuters-usa-drought-lending.html?_r=1&hp