News
Ag credit crunch: More lenders are saying no
A Wisconsin banker confirms that some ag customers are having difficulty getting operating loans.
Jeff Wilke
Jeff Wilke with Denmark State Bank in Denmark, Wisconsin says lenders and creditors have tightened up their underwriting because of the state of the ag industry and the low commodity prices, and he tells Brownfield it’s hard, but he’s said no to borrowers a few times this year. “Yeah, we have. We have, but with that, we always try to give them some options to think about, even though we wouldn’t maybe be able to help them. Maybe there’s some other options through other avenues to at least give them some things to think about even if we can’t help them.”
And it’s not just the banks that are tightening up credit. “Even some of the vendors that provide crop inputs and that, we’ve noticed that they’re a little tighter on their underwriting, too, for those types of products.”
Wilke says producers can go through the USDA’s Farm Service Agency loans to help cover previous year debt.
He says the best thing farmers can do is to continue cutting expenses and to realize when it’s not wise to continue operating. “Looking at the operation and the long-term viability of it and whether or not it makes sense to keep, in essence, funding losses and that’s a decision a producer has to make, and it’s a tough one.”
Wilke spoke to Brownfield at the WPS Farm Show in Oshkosh, Wisconsin.
Hello,
I’m a retired Grain Merchandiser I cannot believe that Ag lenders have waited until this year to tighten credit.
I have seen big farmers lose $300.00 per acre in 2014 and 2015., and $ 100 per acre last year. I have advised my
farm clients not to plant corn for three years. AG lenders in Indiana were all to happy to put the farmer i n a hole. Now
I;m seeing farmers on the bubble this year in a do or die situation. So when banks have to eat a big loss remember you all
helped the farmer slide down the hole.
One more thing, don’t loan money to build storage for another years crop. Farmers do not understand how to market grain. They can’t go any college and learn the real way to merchandise their crops. IN 2012 corn reached $8.00 plus dollars. But only 30% of the corn was sold for this price. The highest cash price corn was sold to ADM in Brookston, IN
for $9.12 fob the farm. This was four and five dollars higher than 98% of the farmers. That is what understanding the proper way to merchandise is all about.