Ag a credit-based business, liquidity squeeze real

For the average American, the inability of banks to make loans due to a lack of liquidity is more of a concept than a reality.

Unless you're on the cusp of buying a home, getting a student loan or need a second mortgage to finance your business or bail out a debt situation, you're largely unaffected.

For the average farmer or rancher, it is not a concept. Most get a loan at the bank each year to finance putting a crop in the ground or buy bulls to breed cows, as well as provide a paycheck to keep the family going, Once a year, when the crop or calves are sold, they pay off the loan and hopefully have a little profit left over.

Most small businesses operate this way. They are seasonal, in one way or another, and use credit to tide them over the down times. When banks don't have money to lend, they are up a tree. Some can figure out how to scrape by, borrowing from Peter to pay Paul, but many can't.

Their liquidity crisis is just as real--maybe more so--than the big boys. A few might get help, if drought or hurricanes can qualify them for low interest loans from the U.S. Department of Agriculture. This could tide some over, but for the majority that finance each year with the local bank, it could be tough times indeed.