Farm financing becoming more elusive
More farmers are finding it difficult to secure financing.
Minnesota West Community and Technical College Dean of Agriculture and Business Paul Lanoue says he recently worked with some young farmers turned away by traditional lenders.
“They’ve looked for banks, and the banks aren’t giving them choices. I had one (farmer) who was at 15 percent (interest), pretty much a credit card is what he was putting all his input costs on because he couldn’t attain it anywhere else.”
Lanoue, who also farms, tells Brownfield that is not feasible long-term.
“He deemed it as a short-term punt, but at the end it cost him so much money in interest that it’s just not justifiable. His net farm profit can’t even make up for the interest payment.”
He says with the decrease in working capital and less available cash, farmers who can’t restructure debt are being forced into mediation or even bankruptcy.
Brownfield interviewed Lanoue at the Minnesota Farm Bureau annual meeting Friday in Minneapolis.