By Carl Zulauf
Ohio State University Economist

Serious problems that developed in the agricultural credit situation in 2009 could escalate in 2010–2011.

The earliest problems have occurred for lenders with loan concentrations in beef, dairy, hogs and poultry. Producers in all the protein sectors have suffered significant losses for over a year, resulting in a large increase in non-performing loans. Although there were few foreclosures in 2009, without a significant turnaround in income, many dairy and hog loans are in a near crisis situation. Many producers have lost enough equity that their lenders will be forced to discontinue financing.

The ...