More From Vegas

Last week my column highlighted some of the thoughts and perspectives from the 54th annual American Bankers Association Agricultural Conference. John Blanchfield, the conference director and organizer, with his fine staff delivered another stellar conference. The following are some more perspectives.

A Doane’s study of agricultural producers found some very interesting results. Producers gave their top reasons for leaving an existing lender. Some of the leading complaints are as follows:

· Lender fees
· Lack of confidentiality of information
· Lender became too big
· Paper requirements
· Slowness in credit decisions
· Stability of lender
· Loan officer didn’t understand agriculture
· Favoritism toward other producers
· Cookie-cutter loan packages
· Unacceptable rates (.5-1% higher)

How does your lender stack up in these areas?

Dr. Ed Seifried gave his overview of the general economy. He feels there is a tremendous headwind in the economy as the result of:

· Rapidly softening of the housing market
· Higher interest rates
· Uncertainty in the Middle East
· Oil and energy
· Trade deficit

He further states that with the housing market cooling, the reverse wealth effect is taking place. For every dollar real estate declines in value, the American household spends 9 cents less than they would spend otherwise.

Dr. Seifried closed by indicating that there is a 40% chance of recession within the next 12 months, nearly double the probability of recession one year ago.

From The Road
My trucker friends, taxi cab drivers and shoeshine folks for the most part agree with Dr. Seifried that the economy is slowing.

Editor’s note: Dave Kohl, The Corn And Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at sullylab@vt.edu.