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Talked to a banker.....
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Posted 1/23/2015 07:54 (#4331797)
Subject: Talked to a banker.....

I have an acquaintance that is an Ag lender. Yesterday I ran into him at a function and we were chatting. I asked the question how do you lend in an environment where a loss is looking to be reality. He stated that their take on it is first and foremost limit losses, no unnecessary spending, and more collateral. He acknowledged that the majority will be farming for a loss unless something changes. I was old enough through the 80's to go to farm auctions with dad and grandpa. I pray that those days are not on our horizon again. From a young persons perspective a prolonged period of this and we will lose the majority of the young people that have been drawn into Ag. There are differing attitudes towards young producers out there. Some are willing to welcome them into the industry with open arms and some see them as over optimistic competition and would like to see them "taken out". My talk with the banker reassured me that equity is what is necessary to carry through a down turn to the red. Unfortunately not many young producers are healed enough to bleed much red with so little equity. Be care full what you wish for as some of you may need those young producers at your retirement sale.
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