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Southern Illinois | Being involved in ag finance, I can say this: to this point, most farmers are still sitting well, financially. Though the magazines may over exaggerate the amount of cash laying around, a majority of the farm operations are sitting on plenty of working capital right now. Remember, working capital is Current Assets - Current Liabilities. This shows a farms ability to meet all of their obligations within the next year. However, if working capital levels continue to deteriorate which is natural with decreased grain prices, farmers will start having to dipping into other sources of equity to fund their operation; i.e. land. There are many stops to make yet before land lays idle. Machinery and land loans can always be picked up and amortized out over many more years to reduce debt service. No one wants to do this but it can be done. I do not see land laying idle or the banks having an influence on planted acres for some time. I hope this helps somewhat. | |
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Question for Ag lenders & bankers.
