Ask Shan Hanes, chairman of the American Banker Association, and he’ll tell you farm bankers are nervous right now. He and others in the ABA have been chatting with a variety of farmers across the country, both those who enjoyed a good year and those who did not have a good year.
“The biggest concern frankly as we move into 2019, is cash flows, and with these low commodity prices that we’re looking at, it’s hard to make a cash flow work, it’s hard to make something break even, let alone make it profitable. So that’s a big concern as we’re moving into renewal season.”
So, what kind of options exist for farmers and banks at this stage of the game?
“You know, that’s a real struggle. We have done some rebalancing in the past and so we feel like we’ve got our guys in the best position that we could. I think now, we’re going to start to look at the heart numbers and trying to revisit renal rates, revisit some term maybe with suppliers. Those are hard conversations to have because that’s real dollars.”
Hanes noted having a Farm Bill in place helps, but many questions remain as we look ahead to the growing season.
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