Banker Comments from the Tenth District
We have been completing more FSA loans as well as secondary market conventional real estate loans for restructuring debt to enhance working capital and improve debt structure. Also, some borrowers have sold some assets to reduce debt servicing. – Western Nebraska
Borrows have experienced lower calf prices and were in a severe drought last year as well. – Northeast Wyoming
Land values have stayed steady and this has allowed borrowers to use their equity with the lower commodity price challenges. – Western Oklahoma
We did more FSA guaranteed loans this year than we have in the past, but it was more proactive to make sure our producers are able to cash flow. – Central Nebraska
We have discussed more ways to save on input expenses and have intensely discussed whether new “iron”" is really needed and can the operation stand another payment. – Northeast Colorado
There are more livestock operators that have asked for a payment extension this year than in years past. – Southeast Oklahoma
We are pushing debt down the balance sheet to create working capital and improve cash flows. – North-central Oklahoma
We are encouraging borrowers to hold back on capital expenditures a while, if possible, and live more conservatively. – Northeast Kansas
The corn and soybean crops look only fair; conditions were not good at planting and now we are in need of rain. – North-central Missouri
Equipment values are a third of what they were last year and we are forced to look at land as our backup. – Western Kansas
Liquidity is evaporating off our farmers’ financial statements due to low commodity prices. The amount of corn and wheat in our area (old crop) is at historic levels. – Western Nebraska
Working capital is gone for most [producers]. We are now burning through core equity. We have the highest percentage of major workouts and restructures I have seen in my 25 years. – South-central Nebraska
Many farmers have a good equity position, but their income and profitability is weakening. – Central Missouri
A total of 194 banks responded to the Second 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.