Everyone knows that dairy producers are suffering financially.
Rumors would have you believe that banks are sending foreclosure notices, and the dairy industry is starting to resemble the housing market in California.
But some bankers add, "Don't believe what you hear."
“There are a lot of rumors out there right now,” says Tony DeRose, executive vice president of Wells Fargo Bank in Visalia, Calif. “We are the largest dairy lender out there and we have not foreclosed on any dairies yet.” And, he notes there is no truth to the rumor that Wells Fargo is pulling out of the dairy industry.
“We have heard more rumors over the past six months than I think ever before,” says Leonard Van Elderen, chief executive officer for Yosemite Farm Credit in Turlock, Calif. “But the rumors are not true. We have no foreclosures going.”
Van Elderen says "no foreclosures" doesn’t mean they are not working with some folks on their loans. What the future holds in regards to foreclosures, Van Elderen does not know. “We know people are going through a stressful time. We’ve got some customers making tough decisions, but we are working with people.”
DeRose says the lending criteria at Wells Fargo has remained the same; however, it may be a little more difficult for dairies to meet the criteria to gain loans.
What can help dairyman right now is to have current financial information, says Van Elderen. “Know what it is costing you to produce a hundredweight of milk. A financial statement from a year ago doesn’t do you any good. You need a financial statement that is current within the last 30 days.”
As mentioned in this article, there are a lot of rumors flying around the industry about banks foreclosing on dairies. There was even a posting on an online forum about Wells Fargo Bank foreclosing on 40 different dairy operations in California’s Central Valley. It’s easy to hear these rumors and take them at face value. Rumors like this can add additional stress to an already stressful situation.
I would encourage everyone to get in contact with your bank. Check your financial status. Most lenders are understanding of the current financial crisis and how it is impacting your operation. — Megan Pierce, associate editor based in California