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Banker says farmers remain cautious with money, investments
An ag banker says most farmers are being very cautious with their money now. Senior Lending Officer Paul Dietmann from Compeer Financial says a lot of money has come to farmers through the PPP program, through EIDL, and trade adjustment payments, but there is concern about if the good financial times will last. Dietmann says, “We’re seeing what’s happened with fertilizer prices and other input costs have gone through the roof so how do you make a decision whether to take the money and invest it in a capital project, a building, or more breeding stock, or more land, or whatever, when we don’t really know what the future is.”
Dietmann tells Brownfield a lot of land is changing hands now, even with higher land prices, especially if that land is adjacent to the farm or was rented by the farmer. “You’re going to try to buy it if you have the opportunity to buy it. It comes up for sale once every hundred years, so you’re probably going to do it.”
But Dietmann says outside of land purchases, farmers are being careful where they put their money now. “Yeah, farmers are, they’ve been tending to sit on cash or if they’re putting it into something, they’re locking in their fertilizer because they’re afraid it may not even be available at any price in the spring with the supply issues we’ve been running into.”
Dietmann says many of Compeer’s farmer clients have used their recent income from higher commodity prices and farm programs to pay down debt including operating loans.
