The general mood at the National Agricultural Bankers Conference was still upbeat, thanks to stable farm land values, low interest rates and better livestock prices. But the more than 700 bankers from 37 states and Canada at last week's meeting conceded that three to four years of low crop and dairy prices have some producers skating on thin ice.
Dr. Dave Kohl, professor emeritus of ag economics at Virginia Tech, estimates bankers will be scrutinizing the bottom 30% of producers who are barely making a profit. At the same time, Kohl advised bankers not to forget about the top 40% of producers who are still making money and are positioned for opportunities. The middle 30% will be looking for bridge loans to get them through this continuing downturn.
Kohl, who has been advising agricultural bankers for more than 40 years, admonished the bankers to not bridge farmers and ranchers who would be better off getting out of the business now while they still have equity. "If you keep walking them further to the end of the pier, the water is getting deeper. You're not doing them any favors," said Kohl.
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