By Cathy Asher
While the final figures are not yet in for 2025, current predictions for net farm income unsurprisingly reveal less than stellar performance for the farm sector. And with 2026 shaping up to be another challenging year, we as lenders may find ourselves looking for additional strategies to support our farm clients. Whether you’ve been enmeshed in ag lending for five years or forty years, sometimes a reminder that you’re not alone in the challenges you face in your career can be helpful.
You don’t always have to provide an immediate solution. Whether liquidity is the challenge of the day or staying current with payments is front of mind, creating a plan to solve the problem takes time and intention. As lenders, we can feel responsible for creating a quick solution. A little bit of discomfort for the client can help shape a solid plan; one in which they have ownership and are more likely to find success. Discomfort leads to growth.
Every operation is unique and the plan to weather the storm needs to be made with input from both sides – client and lender. The conversations that come from creating the plan are seldom easy but require honesty and objectivity. Utilizing key performance indicators to measure progress toward the plan at regular intervals reduces the likelihood of hurt feelings and also builds trust and long-term loyalty in the lending relationship.
The definition of success varies from year to year – depending on the variables our client base is facing. It is not always measured in the final calculation of liquidity or debt service but rather, the management decisions made along the way to minimize losses. Perhaps your client revisited insurance coverage levels or made the move to implement LRP in their livestock operation. Or they began communicating with you on a more regular basis to provide updates on their situation. These are examples of small wins that can’t directly be measured in key performance indicators but are critical to the long-term viability and success of the operation.
Remember your ‘why’ and encourage your clients to re-discover theirs. We can find ourselves consumed with worry about the outcome of 2026 without considering the opportunities along the way. Take time to review goals and monitor progress toward achieving them. This is a great opportunity to work with clients to modify short-term goals depending on market conditions, inputs costs, etc. If we don’t know what we’re marching toward, reaching the destination can be difficult.
2026 will represent a shift from a temporary slowdown in the ag economy to a general downturn for some of our client base. There will be hard conversations that may lead to farms pivoting away from production agriculture. If you find yourself struggling with how to have those conversations – lean on another ag lender as a sounding board. Our community of lenders is knowledgeable and willing to share best practices or simply lend an ear when needed.
Asher is a relationship manager and Durand market president with Security Financial Bank. She also currently serves on the WBA Agricultural Bankers Section Board of Directors.
