On October 16, 2012, The Federal Financial Institutions Examination Council1 (“FFIEC”) issued a statement to assist financial institutions and their customers (members, in the case of credit unions) affected by severe drought conditions across much of the Midwest and southern portions of the United States. As a result of the 2012 drought, crop yields have declined significantly and, in some areas, crops have failed completely. Livestock and dairy producers also have been affected as the reduced grain harvest has led to higher feed prices. Benefits from crop insurance programs will mitigate the negative financial consequences for a number of farmers this year. However, a continuation of drought conditions could adversely affect the agricultural sector’s credit performance going forward.
Author: Federal Reserve Bank of San Francisco
Date of Publication: October 23, 2012
Last Updated: October 23, 2012