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Ag Bankers Wary About 2019

Cash flow is a growing problem in farm country, and nearly all of the bankers that spoke with DTN at a recent conference said there's some part of their portfolio that's under significant financial stress. However, that portion is small, and bankers say they're being more proactive in helping customers head off problems.Joe Kessie, senior vice president and regional manager of commercial banking at Lake City Bank in Warsaw, Indiana, said that, overall, balance sheets are strong and there are a lot of off-farm employment opportunities in his part of north-central Indiana."What's helping is a lot of operations had equity going into this tough period. And if we can help them by stretching out terms and reducing minimum payments, we'll do that."Much of that equity is tied to farmers' largest asset, their land. Jason Henderson, associate dean of Purdue University's College of Agriculture and director of Purdue Extension, said he thinks a combination of slightly higher interest rates, uncertainty about yields after years of above-trendline production and lower commodity prices will probably result in a slight decline in land values.

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DTN