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More farmers are seeking operating loan options

A lender says more farmers are seeking agricultural operating loans so far in 2024 from non-traditional financing sources outside of their bank.

Benjamin Gehke with Ag Resource Management tells Brownfield business is, “up significantly, about 40% growth.”

Gehke says when banks are reluctant to loan money, they work with farmers using crop insurance as the loan collateral, so the farmer doesn’t have to sell assets just to keep farming. 

Gehke says the low cash-on-hand combined with today’s commodity prices does not make it easy for farmers. “We started with $5.91 corn at the beginning of 2023, and here we are a dollar and a half less than that, and not too different on beans. That’s created quite a crunch. The expenses just haven’t come down at the same pace.”

Gehke says no matter what the farm’s cash flow situation is, farmers will have to closely watch their cost of production, know their break-even point, and watch the markets closely going forward.