Price risk management creates unique credit issues

Jack Wozek

American Bankers Association, 1999, vol. 12, issue 4

Abstract: A farm borrower who uses marketing tools or production contracts to lock in a commodity price enters into a web of issues that lenders should address, such as: 1. The lender should verify that the production plan is realistic. 2. The lender should analyze the marketing plan. 3. The lender should separate production notes from hedge notes. 4. The lender should determine the nature of the contractual relationship between the producer and the processor. 5. The lender should determine if the borrower correctly interpreted the payment and contract fulfillment provisions in the contract.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 1999
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