Road Warrior

Family Living Costs Gone Wild?

Tue, 18 Jun 2013 20:18:00 +0000

One of the major discussion points at ag lending and banking schools is the trend in family living costs and withdrawals from farm and ranch businesses. Some lenders say that their customers are living on $40,000/year, while others state that the living withdrawals have increased dramatically, particularly in the last five years with strong grain and commodity prices.

Road Warrior

Three Generations in the Workforce

Tue, 11 Jun 2013 20:26:00 +0000

During a recent ag lender training session in Charlotte, N.C., Ronnie Hucks, VP of AgFirst Farm Credit Bank, discussed an interesting observation. This is the first time in history that three generations have been in the workforce during the same time span. Let’s take this subject deeper and examine some of its implications.

Road Warrior

Criteria for Enduring the Commodity Super Cycle and Land Value Correction

Tue, 04 Jun 2013 21:23:00 +0000

If a farm is profitable and the profits are allocated properly, all financial criteria on the farm and ranch business will improve. In recent years with the extensive appreciation of land values, some have ignored profitability, or it has become a secondary priority. This is particularly true with the “millionaires on paper” as a result of inflation that have never earned a dollar of profit.

Road Warrior

How Long Will Federal Reserve Continue "Easy Money" Policy?

Tue, 28 May 2013 20:19:00 +0000

The stock market recently bounced to a record high of 15,000. Central banks around the world are opening up the floodgates of stimulus. In my road warrior travels, I have noticed numerous people are concerned about how long the Federal Reserve will continue their “easy money” policy.

Road Warrior

Perspectives on U.S. Farm Debt

Tue, 21 May 2013 21:14:00 +0000

There is considerable discussion among agricultural economists and lenders concerning the status and trends of U.S. farm debt. Let’s dig deeper into the subject and provide perspective.

Road Warrior

Shock and Stress Testing: Analysis by Lenders

Tue, 14 May 2013 18:23:00 +0000

One of the major financial shock tests that a lender must perform concerns concentration of credit. Regulators and oversight specialists are very concerned about this component as agriculture consolidates with fewer producers generating more of the revenue and carrying a larger proportion of the debt.

Road Warrior

Financial Shock and Stress Testing

Tue, 07 May 2013 21:27:00 +0000

The other day a young producer was concerned because he had difficulty obtaining his operating loan for yearly operations. He stated that the lender performed financial shock tests that raised concerns about his financial status. Let’s examine some of the financial shock tests that are top of mind with your lender, and particularly the regulators that provide oversight on agricultural loans.

Road Warrior

Farmland Values and Commodity Prices

Tue, 30 Apr 2013 21:26:00 +0000

Speaking of webcasts, a banker from Iowa asked an interesting question during a recent webcast. He wanted to know my thoughts on how much farmland prices would be adversely affected in 2014 and 2015 if prices for crops drop below breakeven levels, for example $3-4/bu. corn. Let’s examine this issue that is top of mind with lenders and to a lesser extent with agricultural producers.

Road Warrior

Enthusiastic About the Future of Agriculture: Top-10 List, Number 1

Tue, 23 Apr 2013 21:12:00 +0000

The final reason I am optimistic about agriculture is not one specific reason. It is a combination of reasons based upon my travels, interaction with people and general observations from my past experience and vision into the future.

Road Warrior

Green Shoots in the U.S. Economy

Tue, 16 Apr 2013 20:29:00 +0000

Despite all the bickering and inaction of our leaders in Washington, D.C., the U.S. economy is like green shoots of grass emerging from the winter doldrums. What are some of the metrics indicating a comeback in the economy?

Road Warrior