Ag banking is one of the bright spots in the financial sector these days, Sam Miller, senior vice president of agribusiness and food banking at M&I Marshall & Ilsley Bank in Appleton, Wis., told audiences at the Professional Dairy Producers of Wisconsin’s Dairy Policy Summit last week.
“We are lending money to producers and so are other ag lending institutions,” he says. “From a credit perspective, our ag portfolio has never been as good as it is now.” Two good years for producers have paid off in better balance sheets.
From a dairy producer perspective, an improved equity base, good liquidity, good cow prices and good land prices offer a favorable financial picture, despite the gloom and doom projected for the overall economy.
Still, uncertainty about milk and other commodity prices, as well as input price uncertainty, do bear watching.
To that end, Miller encourages producers to invest in risk-management plans to help offset negative consequences of milk-price drops and input-cost increases. And he suggests that you maintain good business records and accurate financial statements so your lender can work with you. “Some of our lending metrics have changed because prices have changed so dramatically, but we still need good information and data on which to base our decisions.”
Finally, Miller says he will not offer a forecast on interest rates, because no one knows where they are headed for certain. However, “ag banking is still open for business,” he says.