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Rough waters could still be ahead for ag markets

The CEO of Farm Credit Services of America says the country was weeks away from an economic disaster during the widespread COVID-19 shutdown.

Mark Jensen said corn growers and livestock producers were hit especially hard.

“I think it was an economic disaster brewing in terms of these producers not having anywhere to go with these products and the price situation,” he said. “They were experiencing huge losses very quickly.”

And Jensen said if he had to bet, the next few years will be more volatile. But he says there are a couple of areas borrowers can look at to ‘buffer’ that volatility…

“Both your liquidity position and then your overall equity position,” he said. “You know, where is that at, how’s your balance sheet structured and what’s your cost structure? Those conversations will probably continue and become even more important.”

Moving forward, he said producers shouldn’t expect the same amount of government support through programs like the Coronavirus Food Assistance Program. He says barrowers should focus on reaching a ‘break-even point’ on corn between $3.50 and $3.75.

Jensen spoke on a webinar Wednesday.