5 WAYS TO PLAN AHEAD FOR FARM ECONOMY DOWNTURNS
November 16, 2021
Anticipate and provide for ag business cycle
Agriculture is the only business with more cycles than a motorcycle
dealership. Farming is a constant cycle of good years and down years. One of
the keys to survival and success is sound underwriting during economic hardships.
Agriculture is looking up financially for nut and dairy
producers, according to Jerred Davis, Conterra Ag Capital relationship manager
in California. The positive change from recent years gives p... Continue reading
HOW TO SPOT A PROFIT OPPORTUNITY AND WHEN TO MAKE THE JUMP
November 09, 2021
Diversifying on-farm cash flow
by adding additional sources of revenue can be a smart way to increase
profitability or better withstand economic hardships. However, the venture
doesn’t come without risk. Thorough preparation can mean the difference between
a fruitful pursuit and an expensive undertaking.
“Farming is a lot more than
just putting a seed in the ground and hoping it grows,” says Jackie Mosier,
Conterra Ag Capital relationship... Continue reading
THE SINGLE BIGGEST RISK IN AGRICULTURE
November 04, 2021
Intermediate-term debt chases more farmers out of business
than any other risk factor.
Financial risk remains the biggest hurdle most producers face
each year. In profitable times, there is always the temptation to add more
acreage or buy new equipment. While sometimes it makes more sense to purchase
land than to rent, such a decision should be made in light of a farm’s
five-year and ten-year plans, and a good hard look at the farm balance sheet.
With cash on hand, most operations can su... Continue reading
4 Financial Tasks to Complete During Harvest
October 12, 2021
With the 2021 season coming to an end, farming operations
across the U.S. are harvesting. Now is also the time to prepare for next year.
Outside of the all the necessary field work, crop science, equipment
maintenance, spraying, tiling, etc.; there are the essential financial tasks to
keep your operation funded. It is vital to the overall health of your farm to
take care of a few yearly tasks: review financials, loan rates, marketing
practices, and insurance.
1. Measure Liquidity:
&... Continue reading
Prepare for 2022 with these 4 essential farm operation planning tasks to optimize finances.
Sustainable Ag 101: Carbon Farming Brings Extra Income and Environmental Benefits
August 31, 2021
This is the seventh and final installment of our series on sustainable farming practices, where we take a closer look at how each practice can bring long-term economic and environmental benefits.&n... Continue reading
Sustainable Ag 101: 4Rs Protect the Earth and Farmers’ Budgets
August 25, 2021
the fifth installment of our series on sustainable farming practices, where we
take a closer look at how each practice can bring long-term economic and
If you purchased fertilizer this spring, you
probably experienced sticker shock.
Fertilizer prices jumped significantly from
last fall. According to the University of Illinois’ farmdoc daily, the price of anhydrous ammonia
was 2 per ton in September 2020. By April 2... Continue reading
Sustainable Ag 101: Taking Urban Farms Indoors Can Maximize Resources and Production
August 10, 2021
the sixth installment of our series on sustainable farming practices, where we
take a closer look at how each practice can bring long-term economic and
When we think of agriculture, we often picture
large fields of row crops or green pastures stretching into the horizon. For
urban farmers, it’s a very different reality.
Urban farmers face unique challenges in being
profitable and productive... Continue reading
POLITICAL UNCERTAINTY PROMPTS FARM DEBT REVIEW
August 02, 2021
As farmers and agribusinesses owners across the country seek
certainty in the post-pandemic economic outlook, a .5 trillion investment
proposal by the White House casts a huge shadow over the economy.
At this point, the uncertainty is so widespread that, no
matter where you sit on the political spectrum, it is impossible to predict the
outcome of President Joe Biden’s proposed stimulus investment package. There
are those who question whether the package ever will get through Congress.
H... Continue reading
Now is the time to lock in low rates
KEY AG INSIGHTS FROM THE JULY FEDERAL RESERVE BEIGE BOOK
July 22, 2021
July Federal Reserve Beige Book
Coming out of a pandemic, the ag financial landscape looks
pretty good, according to Federal Reserve Beige Book report which is issued by
the banks that make up the Federal Reserve System. However, there are more wild
cards out there than up a riverboat gambler’s sleeve. “Labor, especially in the
segment that affects agriculture, is problematic,” says Tom Stenson, executive
vice president at Conterra Ag Capital. In addition, prod... Continue reading
Read the latest in ag finance. This insights summary breaks down the newly released Federal Reserve Beige Book.
Maintain Communication During Times of Drought
July 21, 2021
to your operation can be difficult to deal with, especially those that
fall out of your control. Whether
it be floods, hail, or drought; carefully planning your
next steps is crucial for your operational health.
the historic drought continues to worsen through the western half of the United
States, tough choices are being made. It might be culling a he... Continue reading
How Water Effects Land Values in California
July 13, 2021
Land values in California are becoming more unpredictable
as the Sustainable Groundwater Management Act (SGMA) is threatening groundwater
pumping in the coming years. As we are
embracing another year of exceptional drought in most areas of California and there
will be little to no allocation of surface water in many areas, farmers and
ranchers are reminded just how important water is.
As noted in a previous
article, surface water supply will often vary depending on climate
an... Continue reading
How Family Living Expenses Effect the Farm Loan Process
July 06, 2021
metrics are commonly evaluated during the farm loan process. Often times, cash
flow and debt to asset is far easier to explain than family living expenses.
Questions regarding what needs to be estimated, or even what exactly family living cost is arise.
living is exactly that, items that are included in the basic family budget:
housing, food, childcare, transportation, health care, other necessities, and
taxes. From a financial standpoint, why are these items tracked? It all comes down to cash fl... Continue reading
Include Farm Loan Education in Your Succession Planning
June 29, 2021
term Succession Planning is not new to those in the business of
agriculture. While an important part of
any operation, many farmers and ranchers fail to pay close attention to the
process. Succession planning requires
considerable upfront preparation and plan maintenance to keep moving in a
productive direction. Many resources are
available, as this issue is important to any type of business, especially when
adult children are brought into the business.
no... Continue reading
Sustainable Ag 101: Protect Profits and Beneficial Insects with IPM
June 22, 2021
the fourth installment of our series on sustainable farming practices, where we take a closer look at how each
practice can bring long-term economic and environmental benefits.
Pests are an unfortunate reality of farming.
While pesticides are a common way of dealing with them, they may not always be
the best solution.
To start, they’re an additional expense.
According to a recent article of the University of Illinois’ farmdoc daily,
pesticides acc... Continue reading
Sustainable Ag 101: Rotational Grazing Improves Profits and Pastures
June 15, 2021
Livestock owners: What if you could make more
money with fewer animals? It may seem counterintuitive, but with rotational
grazing, it’s possible.
Rotational grazing is just as it sounds.
Instead of letting livestock continuously graze across a pasture, the pasture
is split into smaller paddocks, which the animals are rotated through.
This change in grazing can have big payoffs.
In Virginia, livestock owners saw net profits increase 0 per head. Beef Ma... Continue reading
This is the third installment of our series on sustainable farming practices, where we take a closer look at how each practice can bring long-term economic and environmental benefits.
Sustainable Ag 101: The Economic and Environmental Benefits of Organic Farming
June 08, 2021
This is the second installment of our series on sustainable
farming practices, where we take a closer look at how each practice can bring
long-term economic and environmental benefits.
Farmers who are interested in pursuing organics have good reason.
The USDA says consumer demand for organically produced goods shows double-digit growth, while the Organic Trade Association’s most recent industry
survey found organic sales in the food and non-food markets reached a record .1 billion.
... Continue reading
NAVIGATING HIGH FARMLAND MARKET
June 03, 2021
A rising tide lifts all boats, and corn
prices that have doubled in the last 18 months are doing the same for other ag
market sectors, including farmland values.
Land prices didn’t exactly track the
downturn in grain prices in the last eight to nine years. However, now that grain
prices are bullish, so is the farmland market. This is fueling some eye-popping
five-figure sale prices in places like the Midwest where farmland is a
bellwe... Continue reading
BUYING OR REFINANCING FARMLAND? TIPS TO NAVIGATE A BULLISH FARMLAND MARKET
IS REFINANCING FARM DEBT TO CAPTURE LOW INTEREST RATES RIGHT FOR YOU?
May 25, 2021
Interest rates are low, and it's enticing
many farmers and ranchers to refinance ag debt to capture savings the
marketplace is offering.
Low interest rates don't automatically mean
refinancing farm debt will save you money in the long run. It depends on how
current financing is structured and how much interest you're actually paying
right now. Sure, you may lower payments, but it's important to consider
variables like repayment capaci... Continue reading
Consider long-term goals with farm refinancing decisions.
These 7 Sustainable Ag Trends Could Future-Proof Your Farm
May 13, 2021
With net farm incomes predicted to decrease 8.1% in
2021, you may be looking for ways to stretch your budget and increase
One potential solution? Sustainable farming.
While there is no set definition for sustainable
ag, UC Davis says its goal is to “meet society’s food and textile
needs in the present without compromising the ability of future generations to
meet their own needs.”
The Sustainable Agriculture Research & Education specifies furt... Continue reading
Is Over Analysis Bogging You Down?
May 10, 2021
“Paralysis by Analysis” may be affecting the productivity
of you or some of your colleagues. Are
important deadlines being missed? In the
ag lending business, we have many of these.
It may be rushing to get a loan funded prior to maturity to avoid the dreaded
‘extension’, which leaves nobody happy. An
escrow may be closing. It may be putting
your loan package together for loan committee for approval or a portfolio
update to senior management might be the fire drill of the day. Whatever th... Continue reading