Bank expert suggests conservative approach heading into 2022
An ag banking expert says uncertainty lies ahead from record-high input costs and volatility in the commodity markets
Nathan Kauffman with the Kansas City Federal Reserve says producers should be conservative when planning for the next growing season. “I think it’s always wise to take a disciplined approach to whether it’s a marketing strategy or risk management and maybe even more so in this environment given this level of uncertainty.”
He tells Brownfield producers shouldn’t focus on prices and projections from previous years. “But the last year or two has been very different so thinking about that cost structure and maybe spending a little bit more time thinking about cost and being conservative with how much working capital might be set aside might be a wise choice.”
Kauffman says despite high inputs, commodity prices have allowed farmers to borrow less money.