Groups worry FSA may run out of funds for loan guarantees

Farmers and ag lenders relying on Farm Service Agency direct loans or guarantees could see those loans delayed this summer as demand is quickly draining available funds.  Several ag groups are sending a letter to members of the House and Senate appropriations committees highlighting the escalating demand for these loan programs and pointing out the USDA's Farm Service is expected run out of funds later this month for direct operating loans and guaranteed operating loans. Roughly $650 million in potential farmer loans could be delayed.  "This substantial shortfall will leave many beginning farmers and others who cannot be fully serviced by commercial credit under current price conditions without the loans they need to stay in business," the letter states. Additionally, there will be a backlog and waiting list for the same kind of loans and loan guarantees for FSA's 2017 fiscal year.  Increasingly farmers are turning to FSA for loans and ag lenders are turning to the agency to guarantee loans. An FSA spokesman told DTN the agency has seen 23% more applications for operating loans this year. Funding obligations for those loans are also up 19% from last year. Additionally, demand for FSA guaranteed real estate loans is up 27%.  ate loans is up 27%.