This past week I was in Brainerd, MN, with the Association of Agricultural Educators. This is the 50th anniversary of the association, and the organization has done so much to advance business management in Minnesota agriculture.
One question they get frequently from the more than 2,400 producers on their records is, "How are my neighbors making it, especially when they have new equipment and vehicles?"
My response to you as producers and lenders is that only the top of the iceberg is visible. For example, some people with new equipment or vehicles have used operating loan money for down payments hoping to hit the home run on the markets later in the year. For others, it’s the fertilizer or feed account that has been left unpaid that is financing the acquired asset. Some will lease the equipment or vehicles and use cash that would go to pay down expenses as the method of making payments.
Some producers even finance these purchases on their credit card. Discussion at the conference found that some of the businesses on the record systems had credit card debt in the $35,000 to $145,000 range.
For those of you who are discouraged and feeling you are not making progress, don’t be in despair because what you see is often not what is happening behind the scenes.
Windshield View
The corn and beans are looking good in Central Minnesota. The eastern Corn Belt is a wash out. We have neighbors who have not harvested a stick of hay or put corn in the ground. What a difference a year makes!