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Stark contrast on balance sheets from start to finish of 2020
Ag lenders expect balance sheets to look a lot different when visiting with farmers about the 2021 growing season.
Kent Thiesse, vice president of MinnStar Bank in southern Minnesota, says now is a good time for what he calls a “pro forma” document laying out yield and prices post-harvest.
“And in a lot of cases, not just above-average yields but well above where they were a year ago, so you now have a lot more bushels there. Plus the added value of price that you can put on there, and it really does improve that working capital and current position on the balance sheet.”
He tells Brownfield most farmers and lenders will revisit the budget after the first of the year.
“We’ve also had CFAP (Coronavirus Food Assistance Program) payments one and two that have come in, the government farm program payments (like) PLC and ARC-County. So farmers have been able to lower their operating debt at the same time, and that combination really improves the balance sheet going forward.”
Thiesse says while challenges remain for crop and livestock producers, the overall picture looks a lot more favorable than at the beginning of the year.
