2012
LOGAN COUNTY FARM OUTLOOK MAGAZINE. LINCOLN DAILY NEWS.com October 23, 2012
19
change on long-term farm loans may not
be very noticeable. As a result, Klokkenga
expects that the next year may see farmers
conducting their business as usual.
But how could that happen with such low
crop yields being sold?
Klokkenga believes that some farmers
may receive higher revenue than usual this
year due to the amount of money they will be
receiving through eventual insurance claim
payments. Insurance payouts restore
the previous financial state.
But there is also another
reason why this might be the
case. The prices for crops that
are brought in this year are
expected to be a lot higher than
usual.
As of Oct. 12, it was projected by
the USDA that December prices could
be as much as $7.50 a bushel for corn and
$15.37 per bushel for soybeans. These
prices determine the insurance payout that
farmers will receive.
Another factor that could contribute to
potentially increased revenue for farmers is
whether or not they sell any acreage.
The value of tillable land has increased
dramatically over the last five years. While
the average price per acre is still between
$9,000 and $10,000 for good-quality
farmland, Klokkenga has seen sales figures
jump as high as $15,000 per acre at land
auctions.
“
That is near the top of the price range,”
he said.
Potential buyers of such expensive
farmland would have to borrow more
in order to pay for it. However, due to
decreasing interest rates over the last few
years, buyers have not shied away from
taking out loans to buy land.
“
Agriculture has been very profitable in the
last five years, so agricultural lending has
been positively affected,” said Klokkenga.
Because of the profitability, farmers had
been frequently looking into expansion and
improving equipment. But because of the
drought, the state of agricultural finances
may not change very much this year.
Klokkenga says that as a result of farmers
earning high revenue from insurance
claims, as well as the profits from
crops that were saved and any
acreage that is sold, “there
should be little change on the
amount or frequency of long-
term loans next year.”
While more short-term loans
may be issued, for farmers it will be to
carry them over until insurance payments
come in.
Both Cub fans and farmers are model
optimists -- in it for the long run with their
faith taking them into each new season.
For farmers, partnering with financial
providers brings long-term success and
security.
[
Derek Hurley]
Eli Klokkenga has been an employee of State
Bank of Lincoln for 7 months & has been part of
the agricultural loan industry since May of 2011.