More than a bank. Your Partner in Ag.

image of a row of field corn

We understand there is uncertainty in our current ag environment with rising interest rate pressure, higher input costs, high land values, and more.  This year, you might be affected by:

• Inflationary Pressure and Rising Interest Rates

• Rising Interest Rates = Rising Cost of Money

We can help you strategize. Here are some ideas to consider:

• Consider a targeted asset replacement plan.

    • It doesn’t necessarily mean you shouldn’t go purchase that new piece of farm machinery; however, it could be time to outline a farm machinery replacement plan and focus on replacing as needed.
    • You may also consider placing a greater emphasis on routine maintenance and upkeep to prolong that machinery life instead of planning on a new purchase.

• Manage your liquidity position.

    • With our farm borrowers this year so far, we have seen numerous customers with working capital of $1 million+.  Be cautious in how you’re managing your liquidity position.
    • Evaluate what your actual family living expenses are – insurance, utility bills, cell phone bills, childcare costs, transportation, housing, and food & groceries are a few things to consider.
    • Consider your term debt payments for the year and plan for these expenses to have cash on hand when they come due.

There is an old saying that if one is swimming in cash and working capital, keep swimming! In today’s uncertain economic environment, err on the conservative side…When in doubt, stay financially liquid as possible to protect yourself, but also as an opportunity strategy.

-David Kohl, “Cost of Keeping Working Capital in Inflationary Times”  www.farmprogress.com.

We’ve built an understanding of the farm economy and the opportunities & challenges that face our ag customers since 1903.  Our ag lenders have nearly 100+ years of combined lending experience and would love to connect with you today!

NMLS #718145

published on 03/20/2023

Sources:
https://pucommercialag.podbean.com/e/2023-top-farmer-conference-recap-interest-rates/
https://www.farmprogress.com/farm-business/cost-of-keeping-working-capital-in-inflationary-times

Photo by Steven Weeks on Unsplash

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