With low prices for corn and soybeans many farmers will be challenged to balance their financial books at the end of the year. WCIA 3’s ag reporter Stu Ellis visited a lender to talk about the current financial challenges. That’s in this morning’s report From the Farm.
Farm Credit Services of Illinois provides financing to thousands of farm operations in the southern 60 counties of Illinois, and chief operations officer Aaron Johnson said the lending season will start very early this year…
Our loan officers will be meeting with those people experiencing difficulties after the crop’s out and we get a good feel for what the cash flow is going to look like, doing some estimates and helping them work through options they may have or want to look at as they address those situations. Each one is different, and it just depends on…that’s why we’re here to sit down individually with those operations and take a look. You know some of it may be changes in practice, some of it may be cropping decisions, some of it may be liquidating assets to reduce debt and those are all individual decisions that those operations need to make, and we just help them work through and talk through those options.
Exacerbating the problem for financially challenged farmers is the volatility in the farm economy…
Are we going to stay stable, or is this thing going to become more volatile and we see some more decrease? Land values are down only about three and a half percent in our 60 counties in the last 12 months, which is not surprising because there is a lot of demand out there yet, and people built financial positions to take advantage of opportunities when they arose. And some of those are happening now. So if we continue to see commodity prices decrease and margins tighten even more, what’s that going to do to the land market and cash rents and I think that’s where we’re interested.
That’s our report from the farm. I’m Stu Ellis with WCIA3 your local news leader.