Higher Markets and Moisture Have Ag Lenders Optimistic for 2023

March 27, 2023

Ag lenders continue to play a very important role in helping to keep farmers and ranchers in the business of raising food and fiber. During the recent Montana Ag Bankers Conference in Bozeman, Ag Committee Chairman Heather Malcolm with Bank of the Rockies had this advice for producers for having a successful relationship with their Ag lender.

"One thing that I've always maintained is you have to have a really good relationship with your Ag lender," said Malcom. "You need to visit with them on a monthly or more basis so they know what's going on in your operation so you can help each other. It's important customers tell us what's going on, whether it's good or bad so we can help help our customers make the best decisions that they can."

Moisture and higher markets have spurred some renewed optimism in farm and ranch country. Randy Blach, CattelFax CEO told Ag lenders that they're going to see more profitability here in cow calf country.

"I think the bottom line for cow calf producers, you're finally going to get a payday," said Blach. "It's been long overdue since we've really made any money in cow calf country and it starts with moisture . Then we retain heifers. Prices are going to move higher again. We've got a market that we're likely going to see the number of fat animals decline 2.5 million head over the next four years. That's a big drop, a 10% drop in beef production over the next four years. Prices are going to move and move significantly."

Al McCormick with Brevara Bank has been an Ag lender for 43 years and shares what it's been like since his very first job all those years ago in Scobey, MT.

"You graduate from school in 1980," said McCormick. "There's turmoil in Ag. Interest rates were sky high and trying to sit down and visit with farmers and ranchers to get them through that. Over that time there was also drought and very little rain. The only thing that grew was tumbleweeds. How do you cash flow that? You also get the good times. You get the the markets that we had 2009 through 2014 when we had record income and how you best could bank that and save it and put it to work."

Despite the recent news of bank collapses in California's Silicon Valley, Ag lenders want to reassure their customers that they're very much open for business and tend to keep it that way.

Source: Western Ag Network