Stabenow urges bankers to consider dairy payments as collateral
Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., wrote financial regulators on Thursday asking them to consider expected payments under the new dairy program when making loans to dairy farmers, even though the government shutdown has delayed operation of that program.
Agriculture Deputy Secretary Steve Censky said this week that eligibility for the program will be retroactive to Jan. 1.
In a news release, Stabenow noted that, due to low farm income, more than half of bankers have increased collateral requirements for farm loans.
Because important USDA implementation resources and decision tools were delayed during the government shutdown, dairy farmers and their lenders might not fully account for the benefits they will receive under the new dairy safety net, which could require farmers to provide more collateral, pay a higher interest rate, or be denied altogether, Stabenow said.
“It is impossible to predict how markets will look throughout 2019, but it is crucial for dairy farmers and their lenders to understand the new dairy safety net as they discuss financing for the years ahead,” wrote Stabenow.
“I am encouraging lenders to take a close look at and take into account the improved safety net as they work with dairy farmers to understand cash flow for their operations and what options are newly available — even though they have been delayed due to the shutdown.”