By Cole Lauterbach
Illinois News Network
Almost half of farmers in the Midwest don’t anticipate making a profit in 2017, according to a survey of their lenders.
Ag financing company Farmer MAC, in partnership with the American Bankers Association, released their winter survey results of America’s farm lenders. Bankers in the corn belt, which includes Illinois, say only 55 percent of the farmers they lend to expect to make any money this year. That’s down from 58 percent in 2016.
Farmer MAC Economist Jackson Takach said the thought that half of the region’s farmers won’t make money is worrisome, but that can be the reality in a volatile business like farming.
While the largest issue with profitability in farming this year is low commodity prices, Takach said overpriced land leases share the blame.
“Paying those extra dollars, even if it’s 10, 20, or even 30 dollars per acre more could mean the difference between earning money and not earning money,” he said.
The report says more than a third of farmers surveyed in corn belt states are leasing land that is overvalued.
One of the biggest challenges to lenders is government regulations on small community banks that can force them to decline credit for farmers relying on those operating loans.
“Dodd-Frank added a lot of onerous regulations, particularly affecting small, community banking organizations,” Takach said. “Any conversation that would reduce that is welcome.”
The top concern of agricultural lenders across the nation is regulation and compliance.