The Agricultural Industry
While many financial restructurings or bankruptcies have some routine and similar issues, there are likewise issues which are unique to the specific industry involved. The agricultural sector is no different. In particular, the agricultural industry is susceptible to many external factors and changes which are beyond the control of the borrower. These issues include weather- related concerns and market volatility in commodity pricing and farm land valuations. Transportation price uncertainties can also cause large swings in the profitability of an agricultural operation.
In the past we have seen problems arise when the agricultural lenders lack familiarity with the industry issues. Cattle cases have been one setting where multiple issues of liens and priorities of liens and claims can be extensive and complex. Other issues we have seen include but not limited to:
- Agricultural land leases
- PACA and PASA liens and trusts
- Land rights relating to farm subsidies
- Distribution issues with farm products and subsidies
- Dealing with trade organizations and governmental agencies
- USDA lending and guarantees through Farm Credit
- Commodities trading
While the farming market has generally been strong recently, the continuing uncertainty on the local, regional, national, and global levels continues to provide unique issues for our agricultural – based clients.