Cargill AgHorizons. “The current health of capital markets isn’t going to improve access to capital and will At First National Bank of Valentine (Nebraska), it’s business as usual. “Farmers and drive up costs. Both issues are yet ranchers have had a good year, and cattle prices are good,” says banker Jerry Brei. to play out at a time when grower demand for credit could be double
AgriFinance, Helena Lending
Services, Cargill, and several cooperative banks.
Cargill offers several financing options. Seed, crop protection products, fertilizer, and application services are included, with a deferred payment, and interest rates comparable to banks. Interest costs are tied to business volume and number of input categories purchased.
“Over the last couple of years, we’ve seen growers’ overall needs for crop input financing expand,” says
Steve Becraft, crop inputs manager,
12 months ago, in some cases.” “A lot of people may be looking at tinues to see a slow upward trend in
Johnson is not sure how many agriculture as an investment oppor- land prices. “We’re still battling the
farmers are taking advantage of tunity here and around the world,” impact of 1031 exchanges,” he says.
these programs. “Financing agri- he says. “Investor capital may be an “Right or wrong, it’s influenced the
culture still is very much relation- alternative source of financing. They prices paid for land here.”
ship- and equity-based,” he says. may be more attracted to solid com-
“Improving relationships is the modities and land.” opportunities in your backyard
underlying opportunity. Start with He believes farmers could benefit In a time of market uncertainties
your landlord and lender, then input from an infusion of outside capital. and turmoil, Jones says financial
suppliers and grain merchandisers.” “How many farmers can take on an- consultants can play a key role in
Jones adds, “There are marketing other 1,000 acres, with $500 per acre offering an outside perspective on
tools, if farmers are willing to take invested in crop inputs and land rent financing and marketing decisions.
the time to understand how to use on the top of that?” he asks. “Having a pair of outside eyes
them. Any contract results in less Johnson says, “Outside investors in on your management team is more
control. When you agree to buy spe- the U.S. have been limited in scope important than ever,” he says. “We
cific inputs, it limits your choices.” up to this point. I think land is the can’t all be good at everything. A lot
one asset that lenders providing of smart people on Wall Street were
security agreements will likely target. taken down very quickly.”
outside investor interest Fresh from a trip to New York
City in the wake of the financial market crisis, Jones says that the financial turmoil might not be a setback for agriculture.
More scrutiny on payment limits is He admits that he takes comfort likely, beginning with the 2009 farm when he hears farmers express their program. I’m not sure how much in- discomfort, even fear, of the future. terest will come from new investors “We don’t want to be complacent, in farmland who plan to crop-share.” like the 1980s,” he says. “Farmers
learn more
In Valentine, Nebraska, Brei con- need to consider on a daily basis how
they can best defend their operations
against these risks and keep their
equity positions strong.”
russell Consulting Group, 5243 Panorama Terrace, Panora, iA 50216 877/333-6135 | www.russellconsultingroup.net
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