2022 ABA Ag Bankers Conference
Omaha, NE
11/6-11/9-22

Here are the FINAL highlights from the ABA’s (American Bankers Association) 70th annual National Agricultural Bankers Conference in Omaha, NE. The following audio and video are available without attribution to All Ag News. Please do, however, reference the ABA Ag Bankers Conference.

Audio with Dr. Dave Kohl (like Cole) (Professor Emeritus at Virginia Tech)
22ZE-21 0.10 …where would we be without government payments
22ZE-22 1.42 …do high prices equate to high profit?
22ZE-23 1.08 …on what’s coming down the road
22ZE-24 1.23 …talks U.S. trade policy
22ZE-25 1.37 …discusses input prices
22ZE-26 1.24 …explains interest rates and inflation
22ZE-27 0.41 …with credit card debt expanding, rates will rise
22ZE-28 1.17 …bankers should look for proactive producers
22ZE-29 0.26 …know what you can control, then focus on that

Part II Audio with Dr. Dave Kohl (Professor Emeritus at Virginia Tech)
22ZE-30 1.28 …explains that sports are a perfect analogy for learning to focus on “controllables”
22ZE-31 0.56 …suggests keeping an eye on exports soon
22ZE-32 0.28 …on the tendency to lament or second guess marketing plans
22ZE-33 1.11 …says we might need to think of weather in a different way
22ZE-34 1.32 …what all recessions have in common
22ZE-35 1.06 …tells a story of riding in an autonomous vehicle and how it is indicative of some marketing plans
22ZE-36 1.28 …regarding disruptions and good management
22ZE-37 1.04 …watch out – your ground may be shifting
22ZE-38 1.29 …concerns about growing food nationalization
22ZE-39 1.46 …outlines some risks for ag lenders and producers soon

Part III Audio with Dr. Dave Kohl (Professor Emeritus at Virginia Tech)
22ZE-40 0.21 …the rule of seven
22ZE-41 1.57 …who the risky customers are
22ZE-42 1.09 …downturns can be beneficial for ag lenders
22ZE-43 2.57 …talks about land values and demographics
22ZE-44 2.04 …warns about financial trap doors
22ZE-45 0.57 …the importance of cash flows
22ZE-46 1.05 …what questions will bankers be asking soon
22ZE-47 2.34 …on resiliency and intellectual collateral
22ZE-48 0.21 …outlines a large and looming issue
22ZE-49 0.42 …despite challenges, he remains optimistic about the future of agriculture

Interview with Dr. Dave Kohl available here

Interview with Dr. Elliot Eisenberg (Economist with GraphsAndLaughs, LLC)
22ZE-50 0.26 …explains the name of his company
22ZE-51 0.39 …says a recession is coming
22ZE-52 0.54 …will it be a global recession?
22ZE-53 1.09 …on energy inflation
22ZE-54 0.39 …talks about the future of renewable energy
22ZE-55 0.59 …what 70 words mean to him (his website)
22ZE-56 0.57 …what you can do to prepare for a recession
WATCH THE VIDEO HERE: https://youtu.be/rg57xwqxRv8

Interview with Shan Hanes (pronounced Shane) (President/CEO of Heartland Tri-State Bank in Elkhart, KS)
22ZE-57 0.28 …2022 has been a challenge
22ZE-58 0.44 …on increasing input costs
22ZE-59 0.36 …whether we could see an uptick in farm sales
22ZE-60 0.26 …on the impact of higher interest rates on farmers and ranchers
22ZE-61 0.29 …on drought and crop rotations in Southwestern Kansas
22ZE-62 0.38 …advice to producers heading into 2023
22ZE-63 0.40 …explains who the Kansas Bankers Association (KBA) is and what they do
WATCH THE VIDEO HERE: https://youtu.be/puKBvIwNH-w

Interview with Fidela Irigoyen (pronounced Fuh-DELL-uh Ear-ruh-GWY-yen) (Market Executive for Agribusiness, Food & Hospitality with Wells Fargo in Arizona)
22ZE-64 0.59 …explains how she ended up in finance with Wells Fargo
22ZE-65 0.35 …agrees that her background prepared her for this position
22ZE-66 0.50 …on impending recession
22ZE-67 112 …how to survive a recession
22ZE-68 1.15 …tells the most important numbers a producer needs to know
CLICK HERE TO VIEW THE VIDEO: https://youtu.be/GkTHlcj8TD4

Interview with Steve Georgy (george-EE), President of Allendale in McHenry, IL
22ZE-69 0.36 …on speaking at the ABA Ag Bankers Conference
22ZE-70 0.41 …why lenders are interested in the markets
22ZE-71 1.16 …agrees that changes over time can easily affect producers and even USDA
22ZE-72 1.09 …says we’re seeing demand destruction
22ZE-73 1.06 …and now there are concerns regarding the Mississippi River
22ZE-74 1.33 …talks about the risk of trading “headlines”
22ZE-75 1.26 …on producer concerns that they could lose the farm in today’s world of volatile markets
22ZE-76 1.57 …how politics can affect markets
22ZE-77 0.22 …and cotton is the current posterchild for market volatility

Interview with Ed Elfmann, Sr. VP for Ag and Rural Banking Policy for the American Bankers Association (ABA) in Washington, DC
22ZE-78 0.44 …on his path to joining the American Bankers Association (ABA) in Washington, DC
22ZE-79 0.42 …on the Ag Bankers Conference
22ZE-80 0.37 …explains why the “bankers” conference is “ag heavy” in content
22ZE-81 1.49 …explains what ECORA (eee-CORE-ruh) is
22ZE-82 2.06 …who and why some oppose the change (to ECORA)
22ZE-83 3.52 …talks about ABA’s priorities in the new 2023 Farm Bill
22ZE-84 1.34 …with so many “ad-hoc” payments over the past couple of years, explains why lenders aren’t concerned with a possible loss of them
22ZE-85 1.46 …whether there’s a concern for the future
WATCH THE VIDEO HERE: https://youtu.be/-3ULlBecJ5E

Interview with Zach Ducheneaux (DOO-shuh-NO), the Administrator of USDA’s Farm Service Agency (FSA) in Washington, DC
Interview with Zach Ducheneaux (DOO-shuh-NO), the Administrator of USDA’s Farm Service Agency (FSA) in Washington, DC
22ZE-86 0.38 …why USDA attended the Ag Bankers Conference this year in Omaha
22ZE-87 1.15 …says the weather back home (in SD) is indicative of the weather challenges producers have and are facing nationwide
22ZE-88 1.55 …how the FSA is attempting to help distressed producers this year
22ZE-89 1.40 …on efforts needed to bring new and beginning farmers and ranchers into the industry
WATCH THE VIDEO HERE: https://youtu.be/BkkLDxubQak

Interview with Keith Phillips, Senior VP and Agricultural Division Manager for First Bank and Trust Company in Lebanon, VA (NOTE: He is also the most recent recipient of the ABA’s Bruning Award – recognizing lifetime achievement in credit and financial guidance to farmers, ranchers, and businesses in rural America)
22ZE-90 0.32 …his path to ag lending
22ZE-91 0.14 …wants his office of lenders to all have backgrounds in agriculture
22ZE-92 0.33 …on conditions in his region
22ZE-93 0.21 …talks about the biggest challenge facing his producers today
22ZE-94 0.31 …on the Bruning Award, presented annually at the Ag Bankers Conference
22ZE-95 0.35 …it’s important for producers to find a lender that is passionate about agriculture
22ZE-96 0.43 …encourages other ag lenders not currently involved in the industry to get involved or to attend next year in OKC
22ZE-97 0.37 …despite challenges and storm clouds ahead, says he’s still excited
WATCH THE VIDEO HERE: https://youtu.be/kRUUO-gHzK0

---

Interview with Curt Covington (former Chairman of the ABA Ag Bankers Committee, now with AgAmerica Lending)
22ZF-00 0.20 …on ag lenders returning to Omaha for the ABA Ag Bankers Conference
22ZF-01 0.48 …why ag lenders get together
22ZF-02 2.28 …admits that 2023 and 2024 will be more difficult – financially – from 2022
22ZF-03 2.57 …on the 2023 Farm Bill
WATCH THE VIDEO HERE: https://youtu.be/mGsfgWU-PHI

Interview with Clay Doyle (FNB Granbury Texas)
22ZF-04 0.12 …on his position with the Texas Bankers Association
22ZF-05 0.25 …who attends the Texas meeting
22ZF-06 0.26 …outside of rural America, people don’t understand what happens in the country
22ZF-07 0.33 …on apathy
22ZF-08 0.14 …explains the benefits of meeting other bankers from other parts of the country
22ZF-09 1.01 …talks about the importance of getting involved in your community
WATCH THE VIDEO HERE: https://youtu.be/7CCQ3kwSzQQ

Interview with Nate Franzen (pronounced FRAN-ZEEN), President of the Ag Banking Division of First Dakota National Bank in Yankton, SD
22ZF-10 0.13 …does he enjoy coming to the ABA Ag Bankers Conference?
22ZF-11 0.25 …why it’s important
22ZF-12 0.44 …talks about First Dakota Bank
22ZF-13 0.35 …why transition plans are important
22ZF-14 0.50 …looks at conditions across the region
22ZF-15 1.14 …on record-high input costs
22ZF-16 0.36 …on transportation issues
22ZF-17 1.07 …speaking of transportation, it offers a huge opportunity
22ZF-18 1.28 …talks about government ad-hoc payments in the past and writing a new farm bill
22ZF-19 1.05 …offers advice when dealing with your lender
WATCH THE VIDEO HERE: https://youtu.be/-J-hbL7OmmA

---

Interview with Doug Wareham (Executive Director of the Kansas Bankers Association)
22ZF-20 0.37 …on ag bankers gathering together
22ZF-21 1.58 …what ECORA (ee-core-ruh) is
22ZF-22 2.05 …though you might MSG in your food, ESG is not a relative
22ZF-23 1.01 …says recession may be likely, but…
WATCH THE VIDEO HERE: https://youtu.be/F1ow3zeSSWU

Interview with Heather Malcolm (with Bank of the Rockies in Montana)
22ZF-24 0.10 …on her time in leadership with the ABA’s Ag Bankers Committee
22ZF-25 0.15 …ag is in her blood
22ZF-26 0.18 …her background benefits her borrowers
22ZF-27 0.30 …conditions in Montana
22ZF-28 0.20 …financial conditions
22ZF-29 0.25 …challenges, in addition to input prices
22ZF-30 0.20 …every challenge provides an opportunity
22ZF-31 0.39 …her advice for producers as we go into 2023
22ZF-32 0.48 …why other ag lenders should consider attending the Ag Bankers Conference
WATCH THE VIDEO HERE: https://youtu.be/UaEeYXv-l2U

Interview with Brad Guse (pronounced Goose-EEE) (BMO Commercial Bank)
22ZF-33 0.27 …talks about central Wisconsin
22ZF-34 0.55 …on his path to ag lending
22ZF-35 0.59 …what keeps him awake at night
22ZF-36 0.43 …how tough times in agriculture affect local communities as well
22ZF-37 2.26 …what producers can be doing today
22ZF-38 0.45 …ag lenders have something in common
22ZF-39 0.20 …on finding more online
WATCH THE VIDEO HERE: https://youtu.be/aYKyu6vBtmM

Interview with Tony Coder (Ohio Suicide Prevention Foundation)
22ZF-40 0.28 …says we don’t choose when we get sick, nor do we choose anxiety, depression, or mental illness
22ZF-41 0.53 …on stress
22ZF-42 0.50 …knowing the warning signs
22ZF-43 0.51 …so you aren’t trained, can you still help?
22ZF-44 0.44 …says those in agriculture carry additional weight
22ZF-45 1.28 …this is preventable
22ZF-46 0.57 …so who are you going to call?
22ZF-47 0.57 …how the stigmatism is breaking down
22ZF-48 0.36 …where to find more information
WATCH THE VIDEO HERE: https://youtu.be/hEh5fty9hGk

Interview with Jackson Takach (pronounced TACK-ISH) (Chief Economist with FarmerMac I Washington, DC)
22ZF-49 0.43 …who FarmerMac is
22ZF-50 0.23 …his background
22ZF-51 0.37 …on the annual ag lender survey
22ZF-52 0.45 …what the survey suggests
22ZF-53 1.17 …whether we can project 12 months down the road
22ZF-54 1.01 …how the housing market may be an early indicator of what’s to come in ag
22ZF-55 1.09 …challenge for young and beginning farmers
22ZF-56 0.14 …where to learn more about FarmerMac

Interview with Luis Macias (pronounced Lewis Muh-SEE-yuss) (Founder of GrainChain, a blockchain opportunity for agriculture)
22ZF-57 1.42 …what GrainChain is
22ZF-58 0.46 …on the difference between blockchain and cryptocurrency
22ZF-59 0.31 …where to learn more

This is our audio/videos from the 2022 Ag Bankers Conference. Broadcast outlets are free to use the content at no charge.

---

Ag Lender Survey: Interest Rate Volatility is Top Concern in 2023

ABA, Farmer Mac joint survey reveals ag lenders are most concerned about impacts of inflationary pressure on farmers and ranchers

OMAHA, Neb—The top concern facing agricultural lenders going into 2023 is interest rate volatility, according to the 2022 Agricultural Lender Survey report produced jointly by the American Bankers Association and the Federal Agricultural Mortgage Corporation, more commonly known as Farmer Mac (NYSE: AGM and AGM.A). Nearly half of respondents (49.0%) ranked interest rate volatility among their top two concerns, up 35.5 percentage points from last year. While rising rates have helped bolster bank net interest margins, a combination of higher funding costs, fears of weakening loan demand, and strong competition is expected to cut into rising yields, according to the report released today at the ABA Agricultural Bankers Conference in Omaha, Neb.

“Given the Fed’s clear signal that it expects to continue raising rates until inflation is contained, it’s fitting that ag lenders cited interest rate volatility as their number one concern,” said ABA Chief Economist Sayee Srinivasan. “Lenders expect that both short-term and long-term rates will continue to rise in the coming year, reflecting market expectations that rates could rise by another 100-150 basis points by the end of the first quarter of 2023.”

Farm Economy
In response to the survey, lenders cited inflationary pressure as their number one concern for producers. Liquidity and farm income, two of the top two concerns in prior years, were the second and third greatest concerns this year, respectively. Lenders remain comparatively more concerned about the weather and less concerned about total leverage than in prior survey years, according to the report. Recession risk, a new category this year, was lenders’ fifth highest-ranked concern for producers. By comparison, lenders ranked “a slowing economic recovery” near the bottom of their list of concerns for producers in 2021.

“Many of America’s farmers and ranchers experienced a strong recovery in 2021 and 2022, driven by higher commodity prices and robust sales,” said Jackson Takach, Chief Economist at Farmer Mac. “Looking ahead, ag lenders are keeping a close eye on expenses, as feed, fertilizer, fuel, and other input costs remain elevated.”

Respondents’ level of concern for all categories of commodities fell this year. Lenders reported the highest levels of concern for the dairy, fruits and nuts, and beef cattle sectors, but concern for each sector showed improvement over 2021 levels. Lenders’ concerns notably declined for grains over the year.

For the second consecutive year, most ag lenders (66.3%) reported that overall farm profitability increased in the last year. About one in ten lenders (10.3%) reported that overall profitability declined. Lenders expect conditions to deteriorate next year, with 52.6% projecting a decline in farm profitability in the next 12 months. However, this remains well below the 2016-2020 survey average of 82.3%.

Approximately four out of five ag lenders reported rising land values in 2022, consistent with results from the 2021 survey. However, a growing percentage of lenders expected land values to slow down (59.4%) or decline (12.7%). Cash rents were also reported higher in 2022, with 72.2% of lenders reporting higher rents in their market areas and 43.2% of respondents expecting cash rents to continue to rise in the next 12 months, potentially adding to inflationary pressures for producers.

“Farmland, a significant store of wealth for millions of farm families, continued to appreciate in 2022,” said Takach. “Most ag lenders anticipate the growth of land values slowing in the coming year, likely in response to higher interest rates and potentially higher farm expenses. ”

Lending Conditions
Lenders’ top concerns after interest rate volatility are lender competition and weak ag loan demand, according to the report. Approximately one in three respondents ranked competition among their top two concerns, down 17 percentage points from last year. More than three-quarters of respondents (77.5%) ranked the Farm Credit System as their number one competitor for agricultural loans. Concern about credit quality and ag loan deterioration, the number one concern in 2020, remained the fourth highest concern facing lenders in 2022.

According to the report, demand for loans secured by farmland increased in 2022 at about the same pace as in 2021. Demand for agricultural production loans also grew in 2022, reversing the downward trend reported last year. However, demand for ag production loans remains below the 2016-2018 survey average. Respondents anticipate that loan demand for both categories will continue to increase over the next 12 months.

Lenders reported broad interest from borrowers in alternative ag financing, particularly for livestock grazing practices. The financing of reduced-till farming, precision technology, and cover cropping practices were also areas of interest for ag borrowers.

Lenders also reported an average agricultural loan application approval rate for new loans of 86.0% in the 12 months leading up to August 2022, and, on average, they expect the approval rate for renewal requests to be 92.2% in the following 12 months, likely due to strong conditions in the agricultural economy and a decline in lending activity due to higher rates.

Survey respondents across all regions reported lower ag loan delinquencies and charge-off rates in 2022. Lenders in the South and West states anticipate credit quality will deteriorate next year. In contrast, lenders in the Corn Belt and Plains regions expect the quality to remain fairly stable over the next 12 months.

“Credit quality was excellent in 2021 and 2022, so it is to be expected that lenders would anticipate some deterioration in the coming year as the potential for a downturn grows,” said Srinivasan. “Ag lenders have deep familiarity with the ag sector and its cycles and will continue to work with their borrowers and support farmers and ranchers as credit quality normalizes to historical levels.”

The annual ABA and Farmer Mac Agricultural Lender Survey report is a joint effort to look at the agricultural economy and market forces from the unique perspective of ag lenders. More than 300 agricultural lenders completed the survey in August 2022. The responses came from diverse institutions, ranging from under $50 million in assets to more than $1 billion. Regionally, the responses were somewhat concentrated in the Cornbelt and Plains.

To view the full Agricultural Lender Survey Report, please visit aba.com/agsurvey.

For over a decade, the alliance between Farmer Mac and ABA has enabled ABA-member banks to receive Farmer Mac preferred rates for their farm and ranch mortgage loans and use educational tools and other important benefits to better serve their agricultural customers.