agement tools are more important than ever.”

The challenge is protecting your operation against downside risk without limiting its profit potential.

AGRICULTURE LOOKS GOOD

Not surprisingly, demand for farm credit rose in 2007. Ag loans grew 9%, according to an annual report by the American Bankers Association Center for Agricultural and Rural Banking. About 48% of all loans financed farm real estate transactions. At the end of 2007, the Farm Bank Performance report confirmed that more than 99% of community banks were “well capitalized.”

Photographs: Harlen Persinger, Bob Stefko

Unlike the nation’s largest banks,
community banks rely more on de-
Fi_nancing posits, helping to insulate them from
the subprime mortgage meltdown.
“There’ll be increased demand for
funds nationwide,” says Leslie Miller,
finesse vice president, Iowa State Savings
Bank, Knoxville. “Ag banks have
bumped up lines of credit to fund
more costly inputs over longer peri-
ods of time. Ag won’t be pinched.”
Terry Jones checks soybeans earlier this summer on his Williamsburg, Iowa, farm. At First National Bank in
Valentine, Nebraska, the agricultural
economy also looks good. “We’re
Ag prices still positive, use of deferred pricing contracts by in the middle of the Sandhills in
but input costs and market local elevators has elevated farmers’ cow-calf country,” says Jerry Brei,
risk profile and their need for a flex- senior vice president. “Cattle prices

^{issues cloud horizon} ible line of credit to handle market have been good. Crop inputs from _{By Cheryl Tevis, Farm Issues Editor} uncertainties and volatility. outside suppliers aren’t a major fac-

“The stakes are so high,” says Terry tor. Unlike what’s happening in the Jones, a Williamsburg, Iowa, farmer larger markets, we’re quite liquid. Access to capital is the linch- and partner in Russell Consulting Financing should not be a problem.” pin of agriculture. In an era Group, Panora, Iowa. “You might of record-high input costs, own one crop, and you’re also buying SEPARATE LINES OF CREDIT

farmers are purchasing products inputs for 2009 and 2010. Risk-man- “There’s excess lending capac-and taking delivery earlier than ever ity,” says Steve Johnson, Iowa State before. At the same time, dwindling University Extension. “Working