Farmers need to communicate with their bankers, ABA says
A leader with the American Bankers Association says farmers should take several key steps to navigate a high interest rate environment.
Ed Elfmann, senior vice president of agricultural and rural banking policy, says communication is key. “Make sure that you’re talking to your banker and you understand what’s going on so there aren’t any surprises for anyone.”
He tells Brownfield producers need proper documentation for renewals. “When you walk into that renewal, you need to have those conversations to make sure that things line up the way they need to line up for your operation.”
Elfmann says every bank operates differently. “Much like every farm operates a little bit differently, so don’t be afraid to have an open conversation. What should we do about this? What are we thinking about that? Should I sign a one-year line of credit or a three-year line of credit? That’s one way you can hedge some interest rate risk.”
He says commodity farmers should consider forward contracting.
Elfmann spoke to Brownfield at the 2023 NAFB Convention in Kansas City.