High commodity prices can create sticky situations

This spring the Ag Press has been filled with breathless articles about the future direction of commodity prices. “Wheat Hits 14-Year High!” and “How High Can Corn Prices Go?” are two of our favorites. The sad fact is that a war in Europe has historically led to record prices for U.S. commodities (see 1914 and 1939). [Continue]

Should banks be financing farm real estate now?

Every Federal Reserve district bank is reporting hefty increases in farmland prices. Ultra-low interest rates are helping drive land prices. Is it too early to use the bubble word? And it isn’t just land prices; if you lend money to farmers and ranchers, you know there has been an explosion in prices for used machinery and all input costs. How long do these artificially low rates last, and what happens to asset values when rates start to climb? [Continue]

In ag banking, the right relationship still matters

Rows of soy plants in a field

“Ag banking is different.” How many times have you heard that one? Or, if you are an ag banker, how many of you have used that argument in loan committee as the discussion goes on and on about the viability of a particular credit? Is ag lending really different, and if so how? [Continue]