Interesting............

I was talking today with a high school classmate of mine who retired from farming several years ago and turned the farming operation over to his son.

He said the other day his son was filling out a financial statement at their lender for operating money for the upcoming year. He didn't say which lender, and I didn't think it prudent to ask. Anyway, the loan officer said they had received 27 financial statements from farmers in the last two weeks, and out of the 27 only two showed positive cash flow for last year.

One of the two was my classmate's son, and he said the only reason he was positive on cash flow was because he'd made some west coast runs with his semi during the off-season.

Wonder where all of this is going.

(quoted from post at 20:21:46 04/21/16) I was talking today with a high school classmate of mine who retired from farming several years ago and turned the farming operation over to his son.

He said the other day his son was filling out a financial statement at their lender for operating money for the upcoming year. He didn't say which lender, and I didn't think it prudent to ask. Anyway, the loan officer said they had received 27 financial statements from farmers in the last two weeks, and out of the 27 only two showed positive cash flow for last year.

One of the two was my classmate's son, and he said the only reason he was positive on cash flow was because he'd made some west coast runs with his semi during the off-season.

Wonder where all of this is going.

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Nephew and BIL just went through that. They have a positive cash flow because they do dairy, beef and grain. My banker tells me that they didn't turn down anyone this year but if prices don't come back up in the next 12 months next year they will have to deny some.

Rick

If you hadn't already heard, it's UGLY.

BIG layoffs in the farm machinery industry the last 1 - 2 years, as well.

This downturn in the Ag market has a very long tail and is affecting a lot more than just Ag equip. MFG.

I have been noticing a lot of land auctions lately. I think some people are trying to cash out before land values tank.

Its gonna be a tough time in rural America. Oil prices are low, coal mines are laying people off, and ag prices SUCK!!I wouldn't want to try to find a good paying job in rural America, just out of school.

Grain farmers are sure taking it in the wallet these days!
My milk inspector came a week ago and he is real winded, asked him if he had much for dairies to inspect any more, and to my surprise he said it has actually stayed the same! He is having quite a few new guys in the 25 to 50 cow herds to give licences to while he is losing the 50 to 100 cow dairies.

Yes, its not the best times for farmers right now, but it will come around, been around a while here and this isn't my first rodeo, so hang on and hard work never hurt young men. I know one feller here that worked all winter in the bean plant and then farmed in the summer, geez what's wrong with that? Then I know another that bought a place in Arizona during the tough times down there, and he came home from there, and banker told him no operating money for him!

Needed a small loan for the farmland we bought this spring. I didn't know what to expect, went to the banker with a few papers. I've heard ag loans are tightening up.

Anyhow an hour later he said the loan shouldn't be a problem, if we want to talk to their investment division some day that would be great, and he never really asked for anything beyond 3 years of tax returns, they created whatever cash flow or balance sheet they needed from that. We had hard collateral for the loan which made it easy, but still I was expecting a lot tougher. Was fortunate I'm small enough I don't need the year to year loan for consumables, that is harder to find any more.

I remember the 80s. It gets to be a wild ride. As much as I like auctions, I got sick of yet another one back then......

Paul

It's happened before, and it will happen again.

Were you around for the 1980's? Near 20% interest, and several years of drought around here. Then several counties in North Missouri got wipped out by hail. I was working crop ins. claims in that area, and in places it was like a ghost town. Vacant houses everywhere. About half of some counties got put into CRP cause the $65 an acre was paying better than they could crop it. It wasn't good.

At least they can borrow money cheaply, compared to then.

Gene

(quoted from post at 06:57:26 04/22/16) It's happened before, and it will happen again.

Were you around for the 1980's? Near 20% interest, and several years of drought around here. Then several counties in North Missouri got wipped out by hail. I was working crop ins. claims in that area, and in places it was like a ghost town. Vacant houses everywhere. About half of some counties got put into CRP cause the $65 an acre was paying better than they could crop it. It wasn't good.

At least they can borrow money cheaply, compared to then.

Gene

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I'm curious to see how the low interest rates will play out this time.....also the fact that back in the 80's there were jobs out there for the farmers that went under. Not sure what they will do this time....I'm sure the government will come up with something :roll:

(quoted from post at 13:01:07 04/22/16) Its gonna be a tough time in rural America. Oil prices are low, coal mines are laying people off, and ag prices SUCK!!I wouldn't want to try to find a good paying job in rural America, just out of school.

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My take is that rural America overall has not recovered from the recession and won't even have a change to recover for another 8-9 months. I believe there are many political reasons and persons responsible, that I won't go into here as that is not the point of discussion.