Looking at the dollars and cents of the agriculture industry today can be tough at times. With sky-rocketing input costs and low-profit margins, producing food has become an even more challenging “game” than ever before. Because of the struggling economy and decreased consumer spending, there are less dollars to go around, and that means ag lenders are having to tighten their pocketbooks, as well.

According to Ag Weekly Online, Ag Credit Will get Tighter. Cindy Snyder, Ag Weekly correspondent writes, Nationally farm income topped $87 billion in 2008, but it is projected to fall to $54 billion this year. If farm income stays below $60 billion in 2010, farmers will find credit more difficult to arrange. If farm income drops below $50 billion, the situation will become markedly more difficult, he said.

A drop in land values of 10 percent would be manageable and not affect ag credit much, Klinefelter said. With a 20 percent devaluation some stress will be felt, but a drop of 30 percent will cause major problems because nearly all real estate loans are secured by real estate.