Time To Take The Bull By Its Horns And Educate Borrowers

By: Danny Klinefelter

I recently attended a Farm Credit Director Development program in Charleston, South Carolina, where Dave Kohl presented an agricultural economic update. I thought his presentation was exceptional.

He described agricultural producers as fitting into one of three categories: 1) still profitable and cash flowing, still managing tighter margins; 2) those with low leverage ratios, but facing declining working capital and being forced to refinance; and 3) zombies — those still managing the business pretty much as they always have, but being forced to sell property, digging into core equity, and experiencing multiple refinancing.