Successful ag financial decisions

As ag lenders look at their loan portfolio, it's clear to many that some producers are faring better than others. But what's the difference? An overseer of ag banks is a member of ABA Agricultural & Rural Bankers Committee. When he analyzes relative performance, it's not so much commodity or geography that's the difference maker.

“What I would tell you, those that I see that that are managing through the best are the ones that have really taken to heart the farm business IQ component. And they understand that they're running a farm business. They're making business decisions, not emotional decisions. And they're working with the next generations from a succession perspective, planning, thinking ahead. When they make decisions, whether it's to buy the next tractor or combine or to buy the next piece of land, they're asking their partners whether it be their tax preparer, CPA or even their bank partner. If I do this, what's this going to do to my operation from a cash flow perspective, from a balance sheet perspective? And they're truly running a business. Those that are not engaging their partners and leveraging their expertise and talking with them about those decisions, whether it's a purchase or even some marketing decisions, you none of us bankers tell our producers what to do. But we all want to understand what they're doing. And we want it to be a true partner because we have capital invested in their operations through the loan. So the ones that do that best are surviving the best, not by accident.