USDA’s Farm Service Agency loan guarantees and direct loans have provided some important assistance to farmers and ranchers in the past, but that may not be the case moving forward. Wisconsin ag banker Mike DeLong serves on the American Bankers Association Ag and Rural Bankers Committee. He says the program’s effectiveness may be diminished because of the changing structure of farming and the cost to do business.

For example, he says the value of just two combines is nearly equal to the $1.399 million dollar loan limit. De Long thinks with harder times ahead the disconnect between FSA loan limits and capital needs will become problematic.

De Long says without a change in the loan limit it will negatively affect the bank’s ability to lend money long term. He says getting those limits adjusted to better represent the true cost to farm would be a win-win, but it won’t be immediate because it takes Congressional action to change loan limits.