In times of extreme weather, such as floods, hail, or drought, it can be difficult to deal with the stresses that fall out of our control. Carefully planning your next steps is crucial for the health of your operation. With the historic drought continuing to worsen in the western half of the United States, tough choices need to be made to protect your farm or ranch.
As droughts become more prevalent in many areas of the U.S., farmers and ranchers will need to adapt to this way of life. Mitigating risk and understanding patterns is crucial during times of extreme weather. Both producers and ag lenders must become adaptable to these weather patterns. During these times, it is important to communicate with your lender which enables the relationship to grow deeper through financial hardship such as reduced operational earnings.
What About Crop Insurance?
Crop insurance can offset a portion of expenses when floods or droughts occur at any time. Having a significant percentage of expenses into that crop, when uninsured, can create a difficult year. Ranchers will also face challenges in buying hay or other supplements and will start feeding earlier than normal to keep good nutrition in front of livestock during breeding season and before weaning. Mitigants are usually sourcing cheaper and alternative feed stuffs, but the key is preparing to plan ahead.
How Can My Ag Lender Work with Me?
To overcome the financial impact of weather-related losses, open communication is key. Having an ag lender who understands these times of stress and is able to work with you to get through it is most important for your financial health. This can include restructuring loans, extending repayment terms, and providing access to credit. Ag lenders can also provide valuable insights and resources to help borrowers navigate challenging times.
“Conterra offers a host of products to help your farm or ranch operation navigate weather related issues,” comments Luke Schultz, Conterra relationship manager for the Great Plains. “We are a seasoned staff and we’ve been through rough conditions before. We understand these issues will continue to happen as ag is cyclical.”
Why is Communication Important?
By understanding the specific challenges faced by farmers and ranchers during times of stress, ag lenders can provide tailored solutions to help maintain operational and financial health. Open communication is key, and borrowers should feel comfortable discussing their concerns and challenges with their ag lender. Having up front discussions with your lender allows for time to make changes and adjustments before loan payments are due.
Difficulties in an operation can occur at any time. Conterra lending experts are designed with the cycle of agriculture in mind. Regional relationship managers who understand the weather impacts in your area are available to discuss farm and ranch loan options.
Conterra Ag Capital is a private lender, focused exclusively on agriculture. Luke Schultz works directly with clients and lending partners throughout the Great Plains region. Conterra lending experts are located nationwide, providing flexible farm and ranch loans, crop operating loans, development and alternative lending to America’s farmers, ranchers and agribusiness.
Disclaimer: Please note that the information provided in this article is for educational and informational purposes only, and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.
