Banker Comments from the Tenth District
More collateral is going to be needed going forward and restructures are going to have to happen to help with liquidity going through these conditions. – Western Nebraska
With the declining cattle prices we look for a shortage of cash flow for this year’s operations. – Western Oklahoma
The current situation is very difficult for young farmers who have not built up equity. – Colorado
If 2017 is another hit on cash flow it is going to make for some very difficult discussions and decisions. – Central Kansas
If the current cattle market does not improve, credits funded during the height of cattle prices may have cash flow shortfalls in the future. – New Mexico
We had a larger than average production year and cash flows were still tight in 2016. This year however input costs have lowered substantially. – Western Missouri
2017 livestock prices appear to be stabilizing and increasing slightly, putting profit back in the cash flow –Wyoming
We have had excellent crop yields over the past 3 years. This has helped farmers in repaying their loans with little, if any, carryover debt. – Eastern Nebraska
Today’s prices are simply covering input costs and not able to cover terms payments. – Western Kansas
2017 cash flow projections are basically break even cash flow projections, where possible operators are cutting back on costs. – Central Nebraska
Declining machinery and land values are hurting the ability to restructure losses. – Western Kansas
Crop input expenses have not decreased, even though crop prices have decreased 50%. –Colorado
Continued lower commodity prices will continue to put pressure on cash flows. – Eastern Kansas
A total of 204 banks responded to the First Quarter Survey of Agricultural Credit Conditions in the Tenth Federal Reserve District—an area that includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri. Please refer questions to Nathan Kauffman, Omaha Branch executive or Matt Clark, assistant economist at 1-800-333-1040.
The views expressed in this article are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Kansas City or the Federal Reserve System.