Deere Scotty
Member
Not Surprising to me; But Farm Loans Being late are up highest in 9 years, or up about 10% over last year. Not looking good for near future anyway.
- Thread starter Deere Scotty
- Start date
Bruce from Can.
Well-known Member
- Location
- Woodville, Ontario, Canada
I keep thinking that it should be getting harder to borrow money, but the numbers of new barns, and new tractors I see doesn?t reflect that.
Butch(OH)
Well-known Member
Same here, within the last two years and within 3-4 miles of me there have been at least twice the number of new barns built than I have ever seen built previously in same time span. And that isn't considering the horse "farms" or other non farm pole buildings. Two new hog buildings, Two dairy loafing sheds,and new parlor. One complete from scratch 200 cow dairy spread, Covered beef feed lot, numerous shops utility buildings and machinery sheds. I couldn't say about machinery because from a distance I don't know a brand new tractor from a well kept 5 year old one.
There?s a lot of farms refinancing in this area remortgaging previously paid off free and clear assets and stretching their loans to the max to reduce their payments. I?m not sure what the next step is when they?re in another cash crisis or they need new infrastructure and the equity is no longer there.
Don't count on it as borrowing in the traditional sense of going to Farm Credit or the local bank. I hear of lots of crop and dairy farms around here taking on partners to expand. I know of one guy who gets perturbed about that as he does not like dealing with people plus he has a huge ego but he has a choice. He can be king over what he has or he can swallow a little pride and get some non-lender backing to expand.
It's not in the thousands though. They showed a map with actual numbers on either Ag Day or US Farm Report. The number of delinquencies per state were something like 5,6,10 maybe in some states. I have noticed what seems to be an unusually high number of farm retirement auctions this spring.
Too often a farm retirement auction is a euphemism for the banks don't want to carry on with a given farmer. The farmer may not be delinquent but he is at the point where the bank wants to move on in terms of operating money. I've been told that Farm Credit wants a farmer to make a 10 percent profit or they don't want to deal with you.
I would have to guess that in some states the media report does not tell the whole story. Dairy is in pretty bad shape here and 2018 was rough for crop famers in terms of drought, harvest season, and lower prices. A fair amount of corn has high vomitoxin and soybeans have cercospora. While they are in the bin they can be called an asset but what happens when the farmer needs to move that to create cash flow and he can't move that due to being below a quality thresh hold.
Here's a link to that auctioneer. I hadn't check in a couple of weeks,then when I checked in again a few days ago,the number of auctions booked had about doubled.
Sykora Auctions
Sykora Auctions
Traditional Farmer
Well-known Member
- Location
- Virginia
With the average age of farmers in the US being something like 66 there are going to be a lot of turn over in farming in the next 10 years or so and a lot of auctions I'd imagine.And I wonder how many farmers up in their 60's still owe a lot of money?
"BTOs" getting too big too fast for their britches?
even with interest rates so low it seems like the high land prices don't make sense with crop prices.. even in a good year.
might as well sell of that high dollar equipment and land now since you won't be able to use it in 10 years with the "new green dealy" thing. won't need that much land either as you can't farm too many acres with horses and electric tractors. (sorry, couldn't resist)
even with interest rates so low it seems like the high land prices don't make sense with crop prices.. even in a good year.
might as well sell of that high dollar equipment and land now since you won't be able to use it in 10 years with the "new green dealy" thing. won't need that much land either as you can't farm too many acres with horses and electric tractors. (sorry, couldn't resist)
Well I?m a sto and since the dairy went out of business I?ve had my share of delinquent payments as well that and a lapse of judgment that cost me about 4000$ didn?t help much either . Need to make one more equipment payment and I?ll be caught up on that until next year
Land prices don?t need to have anything to do with farming returns. Anybody with $$$$ can buy land. They hope the total return is positive. Return from use (crop profit/cash rent) plus appreciation in value - expenses/taxes. Cash rent should reflect profitability of farming said land, but it doesn?t always.
Around here some land is sold to farmers, some to others. Both need to have $$$$ if they are in a buying mood.
Around here some land is sold to farmers, some to others. Both need to have $$$$ if they are in a buying mood.
fastfarmall
Well-known Member
We had a farmer who had to sell out, they sold his land and got 20 million, but still a million and a half short of what he needed, the machinery was so rough that it didn't bring much, he stopped the sale, believe it or not he is still farming, kept all the rented land, and his brother bought a half section, but from the outside looking in, was a good operator, got his work done on time, but he raised a lot of high dollar crops, potatoes, onions, peas etc. So one never know's until you walk in another mans shoe's !!! It totally floored me !!!
Numbers game.
So take a bank with 100 farm loans out. Delinquencies running at 10% or 10 per 100. 1 more delinquency is a 10% increase because 1 is 10% of 10. You are not dealing with another 10 delinquent loans per lender. That would be a 100% increase.
Different people juggle the numbers to make a point. In this case I'd say someone is trying to attract attention to the current financial crunch farmers are in. I'm not being judgmental. Just saying it happens.
Rick
So take a bank with 100 farm loans out. Delinquencies running at 10% or 10 per 100. 1 more delinquency is a 10% increase because 1 is 10% of 10. You are not dealing with another 10 delinquent loans per lender. That would be a 100% increase.
Different people juggle the numbers to make a point. In this case I'd say someone is trying to attract attention to the current financial crunch farmers are in. I'm not being judgmental. Just saying it happens.
Rick
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