WASHINGTON, July 27, 2016 - About 69 percent of senior credit and risk officers from the 17 Farm Credit Associations in the AgriBank District selected commodity prices as the top challenge. The next biggest challenge was input costs at just over 10 percent, followed by credit availability, and production risk due to weather, both at 3.4 percent, AgriBank, one of the largest banks in the Farm Credit System, said in a news release. The category “other” got almost 14 percent.
“The focus has been on commodity prices — in the minds of many producers, if the price of corn were $4.50 per bushel versus $3.50 per bushel, a lot of problems would be solved,” Jerry Lehnertz, senior vice president of Credit at AgriBank, said in an “AgriThought” report. “However, hope — thinking that things might be better next year — is not a plan. Farmers and lenders need to work together to take proactive steps to succeed through today’s environment.”
Farm Credit lenders are responding to borrower concerns by providing services to restructure their financial situations, the poll shows. Almost 87 percent of respondents said they were supporting borrowers by rebalancing debt to bolster working capital and/or reduce principal payment requirements, while 73 percent said they were refinancing credit to take advantage of current interest rates.
“Both answers reflect the changing financial landscape for commodity prices and how lenders are working with customers to help them maintain their financial health,” AgriBank said. Other responses included consulting on crop insurance and other risk management solutions (80 percent), counseling regarding future operating plans (63.3 percent), and marketing and hedging strategies (50 percent).
The AgriBank District covers a 15-state area stretching from Wyoming to Ohio and Minnesota to Arkansas and includes about half of the nation’s cropland.
For more news, go to: www.Agri-Pulse.com