“Tough conversations are ahead": Ag lender warns as the capital shrinks

Bankers from across the country are warning tough conversations are ahead.

In a Senate Ag Committee hearing this week, one loan officer testified capital is running out across farm country.

“What we’re seeing is continued significant earned network losses across the board. Talking to lenders down in that area, and as well as what I’m seeing in the Midwest, is certain parts of the Southeast part of the country are on year 2-3, if not 4, of losses and having two bankers are starting to work out plans, and having uncomfortable conversations on ‘what is the end game here?’ When I look at the Midwest coming through renewal season, we were able to get all of our renewals completed this year, but those conversations are ‘what is the burn rate of working capital?’ It’s creeping up on us much faster,” said Caleb Hopkins with First Dakota National Bank.

While there could be a rocky road ahead, producer sentiment is up. Economists with Purdue University say the ag economy barometer rose 11 points last month. However, the report showed little change in how producers feel about future prospects.

Related Stories
A Reuters report shows China has a soybean “glut,” finding stockpiles at Chinese ports are at record levels, with crushers there holding the most supplies since 2017.
The National Milk Producers Federation (NMPF) says recent wins in markets like Malaysia and Cambodia help farmers focus on production rather than trade barriers.
Kubota President Alex Woods discusses the “Geared to Give” program, the company’s commitment to those who served, and how the initiative continues to grow and impact veterans.
Lucia Ruano, USMEF’s Central America representative, discusses what is driving demand for U.S. beef and pork in the region.
Tyson expects another year of beef-segment losses due to tight cattle supplies, even as chicken, pork, and prepared foods strengthen overall margins.
Export strength is concentrated in corn and wheat, while soybeans and sorghum lag, keeping basis and logistics dynamics highly commodity-specific into late fall.

LATEST STORIES BY THIS AUTHOR:

The new AFBF Women in Agriculture survey is accepting responses from women in the industry across the United States now through March 31.
University of Nebraska–Lincoln (UNL) representative Dr. Dirac Twidwell joins us with the latest on woody encroachment conservation efforts in the Great Plains.
After years of battling misinformation online, Potatoes USA is using artificial intelligence to monitor and respond to false claims about the industry.
We highlight an Iowa FFA student who is harnessing the power of AI technology to assess stress in agriculture-related careers.
API said it stands ready to work with Congress to develop a balanced approach to E15 legislation that promotes fuel choice, supports investment certainty, and contributes to a stable and fair marketplace for American consumers.