Things were looking up as we were entering 2020. Trade deals were done, or at least the agriculture portions were completed. We were ready for a new growing season. Some of our sectors were looking at increased stability for this year. Even more impactful was the fact that financial institutions were feeling like agriculture was turning a corner and back on the rise. Then, just as 2018 and 2019 did, 2020 came out swinging. Now some Ag lending execs are a little concerned with the trend which they are seeing develop.
Last week, the heads of several Farm Credit institutions took a look at the current barometer of Ag lending. Tracy Sparks is the President and CEO of Yosemite Farm Credit in California. She says that despite the challenges farmers have faced, their outstanding loans are in good condition. However, she is concerned with a change coming to that trend.
In her part of the country, dairy has faced many challenges for many years. She says producers in the industry have been operating at or below break-even for the past four years.
On the other side of the coin is the producers who were expecting to see more positive trends heading into 2020. Bill Johnson is CEO of Farm Credit Mid-America. He says for the start of 2020, many producers are in good shape. Their inputs have already been factored into operating loans before COVID-19 hit.
Johnson?s concerns are with what the future has in store for producers. This pandemic has sent markets spiraling, demand dropping, and businesses shuttering.
What this impact will have by this fall, remains to be seen. Farmers are keeping grain in storage and livestock is sitting in limbo. The markets are not being kind right now. The big question is how long will it take the U.S. economy to recover from this pandemic, and how long can farmers hang on during that recovery?
