* CoBank to expedite affected farmers' loan requests
* Bank to partner with FCS associations to help borrowers
CHICAGO, Sept 13 CoBank, the largest bank in the
U.S. Farm Credit System, said on Thursday it had launched a
program to help farmers and agribusiness hurt by this summer's
The bank plans to expedite the review and processing of
customers' loan requests stemming from the drought and partner
with its associations to support farmers, ranchers and other
rural borrowers within their territories.
"We believe having this program in place will help us better
fulfill our mission as the impacts of this historic drought are
felt over the balance of the year," CoBank CEO Robert Engel said
in a statement.
Worries about the U.S. farm economy escalated over the
summer as farmers watched their crops wilt in the fields and
prices rose to record or near-record levels. Ranchers, cattle
feeders, and dairy, hog and poultry producers will be hit
hardest as pastures have dried up and feed costs nearly doubled.
The U.S. Department of Agriculture forecast this week the
U.S. corn crop will be the lowest in six years and soybeans the
lowest in nine years due to drought losses. The USDA projected
farm gate prices for corn would rise to $7.20-8.60 a bushel,
compared to $6.25 a year ago.
Soybean prices for farmers should be in a range of $15-17 a
bushel in coming months, versus $12.45 last season. Wheat and
milk prices were also projected higher than a year ago, the USDA
CoBank's announcement came on the heels of Wednesday's
statement by the Farm Credit System, the largest single lender
to U.S. agriculture, that it would meet the borrowing needs of
rural America and stand by its customers challenged by the worst
drought in more than half a century.
The System, a U.S. government-sponsored entity (GSE), has
more than $230 billion in assets and accounts for 40 percent of
U.S. ag loans. Denver-based CoBank, a $90 billion co-op, is the
biggest of the four regional FCS banks.
Fitch Ratings noted last week that roughly half of the four
regional FCS banks' loan portfolio consisted of long-term real
estate mortgage loans secured with farmland, putting them at
risk if commodity prices trigger a correction in record-high
The FCS was created by Congress in 1916, long before the
better-known GSEs such as Fannie Mae or Freddie Mac, to provide
a reliable source of credit to the U.S. agriculture industry.