Minding Ag's Business

Talk with Lender to Cope with Disaster

Elizabeth Williams
By  Elizabeth Williams , DTN Special Correspondent
Months after the Missouri River flooded fields and finally receded, such as on this field in 2011, some fields remained dormant and still unworked. (DTN photo by Elaine Shein)

INDIANOLA, Iowa (DTN) -- Coping with disaster can be overwhelming. Farmers in Nebraska and along the Missouri River watershed just can't get a break from two huge storms within a month. But you do have someone in your corner to help walk through a disaster: your lender, because the lender is invested in your success and wants to help you move forward.

DTN interviewed Bob Campbell, senior vice president for Nebraska and eastern Kansas with Farm Credit Services of America, based in Omaha, about that difficult conversation you should have with your lender sooner rather than later when facing a disaster.


Some grain producers have immediate and severe impacts. Perhaps they have lost their house, lost the grain in their bins, maybe their feed base is flooded.

Others are looking at infrastructure impacts, such as roads and bridges out and no convenient way to deliver grain to their buyers. Or their buyer, such as a water-damaged ethanol plant, is no longer accessible. The whole supply chain is affected. (See "Some Ethanol Plants Face Transport Difficulties to Receive Corn, Export Fuel" at https://www.dtnpf.com/…)

"And we still don't know the extent of damage on some farms still underwater, if they can still be planted this year," noted Campbell.

For the cattle producers, the short-term impact such as calving losses may be an issue for some, Campbell said. "This winter, as a whole, was extremely stressful on the cow herd. A main concern we have been hearing is the condition of the cows going into the breeding season after a bitter-cold winter and major spring blizzards. This disaster could have a long tail," he said.


It can take a long time to assess the damage on farms and how long to recover.

"If the producer had carryover grain he was going to use to pay off last year's loans, we'll extend those," Campbell said. The tougher part will be to figure out how soon a farmer or rancher can return to a normal production cycle again.

Another unknown is what help will the government provide, how much will it be, and when will it arrive.

Some big questions are how soon will the failed levees be fixed? What government funding is available and when? "We'll try to help a producer figure out a timeline," explained Campbell. (See story "Levee Repairs to Take Years" at https://www.dtnpf.com/…)

As DTN reported last week, Congress is not in a hurry to pass supplemental disaster relief for Midwest farmers and ranchers. (See "Disaster Aid Questioned" at https://www.dtnpf.com/…)

Government programs currently available for disaster relief include: Emergency Conservation Program; Emergency Loan Program; Livestock Indemnity Program; Livestock Forage Program; Emergency Assistance for Livestock, Honeybees and Farm-raised Fish; Emergency Watershed Protection Program and Environmental Quality Incentives Program. (See "Follow the Rules When Seeking FSA Disaster Aid" at https://www.dtnpf.com/…)


What will it take to replace the infrastructure that the producer lost? And if the producer has to add debt to replace the assets, what is the impact on the cost of production?

"Some producers will be able to handle more debt. And we may need to re-amortize existing debt to help them get through this year. For others, Plan A may be too expensive and can't cashflow. They'll need to develop a Plan B," Campbell advised.

"For cow-calf producers, we may not know the full ramifications until pregnancy checks. Producers may have higher cull rates and have to either retain more heifers or purchase replacements, which will add to their costs," added Campbell.


"The worst part about disasters in farm and ranch country is it not only affects your home and how you live, it affects your ability to produce a living," Campbell explained. "Not only do you have a loss, you have to figure out how to move forward."

And that's not easy to see when you suffer a large loss. "Your lenders, advisers, family, your merchandiser, your veterinarian -- let them help you think through your options," said Campbell.

"It is not your fault. We will get through this."


Editor's Note: See story "Floods Affect Specific Farm Values, but not Overall Trend for the floods' impact on land values, and how cash renters will need to renegotiate with landowners.


Elizabeth Williams can be reached at Elizabeth.williams@dtn.com



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