Special Report

Farmer financial status going into spring

The downturn in milk prices has altered the cash flow for dairy producers going into spring planting. Larry Johnson with Greenstone Farm Credit says producers knew the downturn was coming and positioned themselves to withstand the cycle.  He says about 70 percent of their operators are in the Margin Protection Program.  He, like many, anticipates a rebound in milk prices in the second-half of 2015. As a result, most dairy producers are in good financial shape going into spring planting.

It is a little different story with cash crop farmers who have seen commodity prices drop but input prices have not followed suit. He says they are working with those producers to help them get through what they think is a two-year cycle.  For starters, he suggests more “shopping” for inputs, fertilizer, seed and chemicals.  “We’ve found several operators who have gone out and really done some shopping and found out they can cuts some costs.”  It may mean you will have to go a little farther to get those lower prices but it is worth the trip.

In both cases, land values and cash rents are holding pretty steady. Johnson says that is due to dairy producers who need the land for nutrient management plans.

Getting back to dairy, Johnson says they are seeing interest in expanding herds despite the lower milk prices. Of particular note, an increased interest in going with robotics.  He says lenders are more comfortable with financing robots these days as the technology becomes more commonplace.

Listen to Johnson’s comments here:

Greenstone Farm Credit covers all of Michigan and eleven counties in northeastern Wisconsin.