Preparing for Loan Renewal (Jan. 14, 2021 webinar)
With Dallas Zimbelman, branch manager, Archer Credit Union; Tara Janda, Financial Services Officer, Farm Credit Services of America; Jessica Groskopf, panhandle regional economist, UNL; Austin Duerfeldt, southeast regional economist, UNL.
This is the first in a series of webinars to assist farmers and ranchers to better understand their financial positions. Sessions will be held from noon to 1 p.m. Central on the second Thursday of each month, through May, and offer education on financial statements, ratios, record keeping, understanding cost of production and more.
This month will focus on balance sheets and cash flows, including details on how to value assets and inventory, refinancing, correcting negative working capital, monthly vs. annual cash flow, operating loans and more.
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[00:00:44.790]Jessica Groskopf: Well, good afternoon in the east, and good morning in the West. Thank you for joining our webinar today.
[00:00:51.480]Jessica Groskopf: My name is Jessica gross cop. I'm a Nebraska Extension Educator at the Panhandle Research and Extension Center where I am. The Economist. I'm also the director of the Nebraska women in agriculture program.
[00:01:03.810]Jessica Groskopf: Welcome back to our weekly series of webinars produced by the extension farm and ranch management team in the Department of Agricultural Economics. You can find a complete schedule.
[00:01:15.000]Jessica Groskopf: Of our future events and our past recordings at farm ul.edu
[00:01:21.120]Jessica Groskopf: We'd like to point out that the rule response hotline remains a great resource for agriculture professionals across the state.
[00:01:28.200]Jessica Groskopf: Providing mental health counseling information and information regarding legal legal assistance financial clinics mediation and more
[00:01:37.200]Jessica Groskopf: The hotlines toll free number is 1-800-464-0258. We have also have a wealth of resources related to stress and wellness at rule wellness.eu and l.edu
[00:01:51.600]Jessica Groskopf: This webinar is a panel discussion co sponsored by the Nebraska women in agriculture program to assist farmers and ranchers to better understand their financial positions. Today we will look at strategies.
[00:02:04.830]Jessica Groskopf: And steps to consider as you prepare to renew your operating loan will look at balance sheets cash flows valuing assets and inventory refinancing and more
[00:02:15.900]Jessica Groskopf: We welcome your questions in the chat box or in the Q AMP. A at the bottom of your screen, as we will be answering those questions throughout today's webinar.
[00:02:24.900]Jessica Groskopf: Please help me in welcoming our panelists, starting with Dallas Assemblyman branch manager of Archer credit union Dallas. Thanks for being here.
[00:02:33.930]Jessica Groskopf: Also joining us is Tara Janda a Financial Services Officer with Farm Credit Services of America out of party.
[00:02:41.190]Jessica Groskopf: Tara, we appreciate you joining us today. And finally, I have my colleague with Nebraska extension Austin or felt the regional economist for the southeast portion of the state.
[00:02:52.380]Jessica Groskopf: Well, thank you guys for joining us again, if you have questions, we encourage you to either use the Q AMP. A at the bottom of the screen or the chat box to
[00:03:01.800]Jessica Groskopf: Send us questions. So to get us started, and we're talking about loan renewal. What do producers need to prepare before arriving at their loan renewal meeting. So we'll start with you, Dallas. What do you think that producers need to prepare before they step into your office.
[00:03:23.220]Dallas Zimbelman: Hi. So the more prepared that you can be and the more accurate, but you can make your financial statements, the better look that we can take at your operation.
[00:03:32.730]Dallas Zimbelman: So some tips and things that we like to see our an accurate list of accounts receivable or accounts payable that you may have your updated crop inventory or market livestock numbers.
[00:03:45.780]Dallas Zimbelman: Any contracts that you may have out or at least know your contract price, price and bushels numbers for that any equipment you bought and sold over the previous year.
[00:03:57.210]Dallas Zimbelman: And a crop operating plan is also helpful. So knowing your estimated crop acres. What you're planning on planting any crop insurance programs that you would have for those those acres
[00:04:08.100]Dallas Zimbelman: And then for our alliance livestock producers, it does help to know kind of what your plan is throughout the year for your whole cows and replace my purchase it.
[00:04:18.990]Jessica Groskopf: Thank you, Dallas, Tara. What do you have to add to that list.
[00:04:26.550]Tara Janda: Yeah, really, for your lender to have a clear outlook on your operation. I think share everything. And if if they're going to be some changes in your operation in the upcoming year.
[00:04:37.800]Tara Janda: Maybe you're renting more acres, and that might be a discussion with your lender that you might need more on your operating line to to support your cash flow. And so really just having those numbers prepared.
[00:04:48.330]Tara Janda: Looking at your cash flow and being realistic with it. Not every cash flow given today's environment might be it, it's going to be positive. Now at the markets, but let's be realistic. With those numbers and not just look for one year, but really look for the next five years.
[00:05:06.630]Jessica Groskopf: Austin. What are your recommendations for preparing for your meeting.
[00:05:14.370]Austin Duerfeldt: I think those all pretty well covered the bases. I mean,
[00:05:17.370]Austin Duerfeldt: When, when we start hearing the terms of, you know, having all your assets.
[00:05:21.720]Austin Duerfeldt: Knowing what your green sold out what your inventory is that a lot of that stuff's covered in your balance sheet. And so if you're keeping a financial record and keeping track of stuff throughout the year.
[00:05:30.810]Austin Duerfeldt: And you, you know, whether you're using software handwritten methods. If you've got that balance sheet readily available both that in my opinion cost method and at market method, you'll have a very good standing. When you go in that
[00:05:46.020]Austin Duerfeldt: Instead of the banker trying to help you fill in the blanks, you're kind of leading the conversation as to where you're wanting to go on what you're wanting to accomplish.
[00:05:54.270]Jessica Groskopf: So often, you, you touched on our next topic, which is what is a balance sheet. So let's go through a little bit more in detail.
[00:06:02.400]Jessica Groskopf: How do I create a balance sheet if I've never done that before. And then also I you touched a little bit on valuing assets, specifically, let's look at equipment and livestock. How do I know what price to value those those pieces at
[00:06:15.960]Austin Duerfeldt: Yeah, so
[00:06:18.150]Austin Duerfeldt: Easiest way to look at the balance sheet. It's what do I own, what do I owe other people and how much value do I have in the business versus what I owe to a bank.
[00:06:29.430]Austin Duerfeldt: And so when we start looking at what I own. Those are considered assets and you have both long and short term assets that are recorded on there.
[00:06:38.220]Austin Duerfeldt: That's anything from the cash that you've got sitting at the bank, which is a very liquid asset that's considered current asset to something considered more like, whether it be land or if you've got a new tractor or combine that would be a long term asset.
[00:06:53.280]Austin Duerfeldt: And in terms of liabilities again you've got the long and the short term, you're operating loan. It's going to be a short term liability.
[00:07:00.840]Austin Duerfeldt: And then anything longer if you've got land loner and longer know payable maybe on that combine that you had purchased that's going to be a long term liability and what you got to recognize when you're looking at that is
[00:07:15.030]Austin Duerfeldt: The current year of any of those long term liabilities is going to move up into your short term my ability and so it's something that it's
[00:07:24.930]Austin Duerfeldt: It's a picture in time in terms of a snapshot when you make a balance sheet, but it is something that's changing
[00:07:31.170]Austin Duerfeldt: Each year, and even a monthly in some situations where you need to be able to stay on top because some of these financial ratios that you run into when you're sort of looking at it. They can flip on your pretty quickly. If you're not paying attention, stay up to date on this.
[00:07:49.470]Jessica Groskopf: So, Dallas. What are some challenges that you're seeing on balance sheets coming in right now, and some things that that producers need to be watching for when they walk into your office.
[00:08:01.470]Dallas Zimbelman: So a lot of times we have a conversation with wanting to change land prices on the balance sheet to account for that appreciating asset, meaning it increases in price over time, typically in a typical environment. And so a lot of times as a lender. We like to keep those prices.
[00:08:20.820]Dallas Zimbelman: Consistent and not change them just due to the fact that it helps us identify trends more appropriately. So when we look at a balance sheet. We're not we, it is important to look at that snapshot in time.
[00:08:32.970]Dallas Zimbelman: But we're also looking at a five year trend typically as to what that balance sheet has done over time. So we don't want to inflate those land prices unless there's been a material change in
[00:08:44.760]Dallas Zimbelman: The land, such as maybe a new well or new pivots, we can maybe adjust for some of those things. But typically, we're leaving them at a consistent
[00:08:54.900]Dallas Zimbelman: Price, whether that be at purchase price or if we've had it. A recent of appraisal evaluation. We may adjust that at those certain times. But typically, we are leaving them consistent just to get consistent trends over five years.
[00:09:11.910]Jessica Groskopf: Tara. Is there anything else related to balance sheets that producer should be watching for
[00:09:17.520]Tara Janda: I think producers always need to watch the top side of their balance sheet there they're working capital position and I think
[00:09:25.080]Tara Janda: That's why I mean that's really the that's for the next year. That's the engine that's going to drive the next 12 months.
[00:09:30.450]Tara Janda: I always say that the equity on the bottom side of the balance sheet that Dallas referenced.
[00:09:35.640]Tara Janda: You know, we can make adjustments to that but we like, we like to keep it consistent. And so really
[00:09:41.550]Tara Janda: I, I probably focus more on the top side of the balance sheet because that's okay. Do we have. Do we have enough current assets.
[00:09:49.020]Tara Janda: To cover our liabilities for the next 12 months and does it give us enough working capital or enough access to help us to operate. That's, that's probably the number that I like to focus on the most with customers and and if we see
[00:10:05.490]Tara Janda: In an operation that maybe that working capital or that current ratio starting to have some stress.
[00:10:10.770]Tara Janda: We're gonna, we're gonna say what what caused this stress this year and so
[00:10:15.720]Tara Janda: That's where it goes into a little more in depth conversation because as Austin mentioned a balance sheet is just a snapshot in time.
[00:10:22.830]Tara Janda: There's always a lot of other factors that go into those numbers, but it's really getting a clear understanding of what those numbers are and what they mean to the operation.
[00:10:32.610]Jessica Groskopf: So let's go into how do we calculate that working capital so terrorists and since you mentioned working capital in particular. So if I'm sitting here looking at my balance sheet. How do I calculate that number.
[00:10:46.920]Tara Janda: Yep. So, um, I always say that a balance sheets release split into four quadrants. And so if you draw four quadrants on your on your tablet sitting here beside you.
[00:10:56.580]Tara Janda: The top left is going to be where your current assets are and the top right is going to be where your current liabilities and so that current portion of term debt.
[00:11:03.960]Tara Janda: Or your operating room they're going to sit up top. In the next 12 months and those liabilities.
[00:11:08.970]Tara Janda: Your current assets are going to be your inventories on hand, anything that's going to move in the next 12 months so your cash, your, your grain inventories. Your feeder caps to sell.
[00:11:18.390]Tara Janda: Anything that's going to produce income. And so to get that working capital ratio, it would be your current assets minus your current liabilities.
[00:11:29.340]Jessica Groskopf: Perfect. So we do have a question from the chat box, and I encourage you if you do have a question, please go ahead and type them in the chat. And the question is,
[00:11:38.070]Jessica Groskopf: What if you have a land value that you want to contest. So maybe you haven't adjusted that land value, but you've been looking at it and thinking, boy, we need to make that adjustment. So how do you as wonders handle that. We'll start with Dallas.
[00:11:55.410]Dallas Zimbelman: I think it just involves the conversation as to why you
[00:11:59.190]Dallas Zimbelman: Feel that it needs to be changed. And has there been any material changes to the property, since we last looked at the value, such as those things that I mentioned before, and it could be that
[00:12:11.580]Dallas Zimbelman: We haven't updated the value for 1015 years and it is it is warranted. And so I think it's just a conversation as
[00:12:18.930]Dallas Zimbelman: To why you think that it needs to be changed, where you feel that it needs to be at and and you and the lender can work together to move from there and do what you think the best approaches for your situation.
[00:12:38.490]Tara Janda: Yeah I would echo that it really just comes back to conversations and and really personal preference. There are some operators that
[00:12:46.590]Tara Janda: Like to leave their land value in at the purchase price and you know it may be well under market value. And I think it's up to us as AG lenders to be able to sort through that as well that you know obviously your land is well undervalued.
[00:13:01.980]Tara Janda: As an equity on your balance sheet and it's we like to keep it that way for the trends like Dallas mentioned, because we don't want to artificially
[00:13:10.740]Tara Janda: inflate your balance sheet and land prices go crazy. And likewise, we don't want to have a repeat of land prices decreasing and then being overvalued on a balance sheet. So it's just a really
[00:13:22.290]Tara Janda: It's a conservative approach that most all AG lenders have and if it's something you want to change. I think that's a, that's a simple conversation.
[00:13:30.390]Tara Janda: And maybe it's a will make the adjustments to everything. This year, and we're gonna we're not necessarily going to make those adjustments for another five or 10 years
[00:13:41.220]Jessica Groskopf: So we have another question in the chat box and it says, I have seen dozens of different balance sheets available to us and all seem to use a different layout and or terminology
[00:13:52.560]Jessica Groskopf: Can you give a link to the simplest, most basic starting point to us and honestly the most simple thing to do is to start with a sheet of paper.
[00:14:01.830]Jessica Groskopf: And list all your assets on one side, everything that you own.
[00:14:06.360]Jessica Groskopf: And then on the other side. Everything that you owe and to work with your local lender, then, to put it into the balance sheet that they're going to be using
[00:14:14.760]Jessica Groskopf: And start to work with them to understand the terminology that they're going to use so Austin. Any other comments on that related to what is the simplest way to start.
[00:14:25.260]Austin Duerfeldt: I would say, That's by far the simplest way to start if if you get through that point you're ready to take take another step further.
[00:14:33.120]Austin Duerfeldt: I would highly recommend, it's, it's something that's going to cost money, but the foreign financial Standards Council.
[00:14:40.080]Austin Duerfeldt: Has a website where they have some resourcing guidelines available that's supposed to be a standard across the industry in accordance to how
[00:14:49.110]Austin Duerfeldt: Farm should be recorded and represented on different financial statements. And so if you're wanting to make sure, for instance, later on, we might start talking about
[00:14:57.930]Austin Duerfeldt: Comparing our financial ratios to other farms, if you're following those foreign financial standard Council guidelines should give you a fairly accurate portrayal of what your farm looks like versus somebody else's
[00:15:12.780]Jessica Groskopf: Another opportunity is that Nebraska extension is having monthly financial courses right now called know your numbers. Know your options. We're getting ready to launch our February.
[00:15:23.700]Jessica Groskopf: Session of that which will be an evening class and we can put information related to that in the follow up email after this webinar.
[00:15:32.220]Jessica Groskopf: But that's a place where we walk through each of the financial documents.
[00:15:37.140]Jessica Groskopf: A cash flow about she in an income statement and allow you to work through look at an example farm and then build those statements for yourself and look at those ratios and glean some of the terminology and and calculations from the farm. Financial Standards Council.
[00:15:55.860]Jessica Groskopf: So any other final comments related to balance sheets that that we need to be watching. I know, Dallas. You've you talk a lot about refinancing. Are you seeing refinancing this year.
[00:16:11.490]Dallas Zimbelman: We're just getting started with renewals so it's maybe too soon to tell. Overall, but so far. I think
[00:16:19.890]Dallas Zimbelman: What we're seeing as farmers to have had a pretty optimistic year with the government payments assisting with that we haven't ran into an instance yet where we've had to look at doing that quite yet.
[00:16:31.230]Dallas Zimbelman: Not to say that it's not a tool that might be used in the future and my advice to producers would be not just to be fearful of that word. If you do end up happy and have a refinance.
[00:16:42.930]Dallas Zimbelman: It's something. It's a tool that lenders will use to help get you back on the, on the right track and Tara talks a lot about working capital.
[00:16:51.810]Dallas Zimbelman: And if things get out of line at the top of that balance sheet refining it refinancing is a good way of moving some of that debt down to longer term.
[00:17:01.590]Dallas Zimbelman: And it reduces your interest rate risk on that, that, as well as potentially can help with maybe lowering term payments or just getting that operation back in line.
[00:17:14.370]Dallas Zimbelman: And I think just communicating with your lender is critical as to what led to the refinance, and maybe what things you can monitor or changes that you can make in the future, just to make sure that you are successful after the fact. If you are happy to utilize that refinance option.
[00:17:33.990]Jessica Groskopf: So Austin from your perspective on refinancing. Is there any other comments you would like to make on that.
[00:17:43.050]Austin Duerfeldt: Dallas kind of hinted that towards the towards the end of her comment but
[00:17:48.360]Austin Duerfeldt: I'm, I'm all for refinancing especially when you're looking at what the rates are currently in terms of
[00:17:54.420]Austin Duerfeldt: Making sure you're you're managing your interests and what your payments are to the best of your abilities. But if you're in a if you're starting to struggle a little bit and you think refinancing is the answer and I'll fix everything my comment would be
[00:18:09.030]Austin Duerfeldt: We need to take a hard look at what exactly it is that's driving your operation and where the cash flows coming from because
[00:18:18.060]Austin Duerfeldt: A lot of times what you'll find is an instance of maybe I'm paying too much and seed or the cost of me harvesting doesn't make sense. And so
[00:18:28.260]Austin Duerfeldt: Trying to go through your operation and identify where maybe some of the weak points are so we can share those up.
[00:18:34.350]Austin Duerfeldt: Is going to be what the long term solution is refinancing is, I don't know if I necessarily want to call it a band aid, but it's not going to fix operations that are starting to struggle. There's more to it than that.
[00:18:47.640]Jessica Groskopf: Here, what are your thoughts.
[00:18:50.520]Tara Janda: Yeah, I actually jotted down some notes there during the conversation, you know, and I think Austin just hit on that, you know, the first question is going to be okay. This is an option. It's a tool in the toolbox.
[00:19:01.830]Tara Janda: what changes are you going to make to the operation if we rebalance the balance sheet because as lenders. Yeah, we can we can help fix it on paper.
[00:19:10.860]Tara Janda: But ultimately, it's up to the operators to say, well, you know what I was paying too much for seed or, you know,
[00:19:18.060]Tara Janda: I had this custom harvest last year. And, you know, maybe I just need to harvest this myself. Even if it's two weeks later, maybe I just need to harvest it myself to save on some of those costs.
[00:19:27.180]Tara Janda: And so it's really being aware of your own cash flow how you're going to make the changes and then it's working hand in hand with your lender to find the right, the right term for your cash flow.
[00:19:38.820]Tara Janda: And and the ability to maybe down the road if you if you don't need that move to the bottom side of your balance sheet. Maybe it's the ability to make extra payments on it to
[00:19:49.290]Tara Janda: To get that paid off sooner. So just, again, I always say it always goes back to communication and as long as the lender and yourself first and foremost, as long as you both understand, um, you can do a lot with that.
[00:20:03.510]Austin Duerfeldt: And I'll go ahead and chime in. Again, just because we're I'm the non Baker in the panelists group. I feel like maybe I need to make this comment.
[00:20:10.590]Austin Duerfeldt: When the bank is successful when the farm successful and so anytime that they're asking you to take a look at what changes, you might have in the operation.
[00:20:20.220]Austin Duerfeldt: If they're, they're actually looking out for your best interest. I know I get a lot of farmers and call me and say, well, I was denied my offering loan and I need to go find somebody else because I just can't work with these people anymore.
[00:20:31.470]Austin Duerfeldt: It. I really stress to those individuals. Again, take a step back and take a look at the situation because more than likely, there's something there that
[00:20:40.770]Austin Duerfeldt: It worries them and they want to make sure that you continue to farm. Because again, they're successful when you're successful. And so it's a partnership and communication is 100% where things start out as to how successful we are going to be
[00:20:59.040]Jessica Groskopf: A comment that I would add to that is also it's having a good relationship with your lender and if the communication is not flowing well
[00:21:08.040]Jessica Groskopf: Ask for another lender within your institution. Before you move outside of the bank, because it might just be a communication challenge that's existing so
[00:21:17.430]Jessica Groskopf: Make sure that you can have a relationship with that person and that that trust that you have with them, knowing that they are your business partner essentially
[00:21:27.330]Jessica Groskopf: Hey, any final comments before we start talking about cash flows.
[00:21:32.910]Tara Janda: I was just simply going
[00:21:34.830]Tara Janda: To add
[00:21:35.550]Tara Janda: If there is something that you
[00:21:37.020]Tara Janda: Don't understand that your lender has said, Ask
[00:21:40.860]Tara Janda: Because like any industry.
[00:21:43.320]Tara Janda: We get caught up in a lot of acronyms and a lot of ratios and we're busy. You know, we're doing renewals because we all want to get renewed and, you know, December, January, February.
[00:21:54.810]Tara Janda: Just have us pause and if there's a ratio that we say, you know, we'd like to see this ratio and we keep her or her him through it. I'm asking Linda to stop and say,
[00:22:03.810]Dallas Zimbelman: I don't understand.
[00:22:05.280]Tara Janda: How did you calculate that and and honestly, it makes us take a step back and and and step into a teaching role which all of us know
[00:22:14.910]Tara Janda: Yeah.
[00:22:15.570]Tara Janda: Sometimes we take for granted that folks know what we're saying, and their understanding
[00:22:24.300]Dallas Zimbelman: I would just
[00:22:25.770]Dallas Zimbelman: Like to add that your lender is really your one of your best advocates for your operation. We want you to succeed in every way, shape and form and you don't need to just stop in and see if that renewal time
[00:22:37.500]Dallas Zimbelman: We can use that cash flow that we set up and we you can stop in and check in with us anytime and we have a way of walking you through certain things, or if you're wanting to make a change, or something comes up.
[00:22:52.560]Dallas Zimbelman: The door is always open beyond renewals so again I know Tara and often have said it but just communication is is critical with that and
[00:23:03.840]Dallas Zimbelman: I know lenders out there will do everything that they can to make sure that they're borrower 16
[00:23:11.940]Jessica Groskopf: All right. So you guys have started to touch on cash flows. So I'm going to start with Austin. This time, if I've never put together a cash flow, where do I start and what is a cash flow document.
[00:23:24.570]Austin Duerfeldt: So a cash flow document or what all consider a cash flow budget and is basically just kind of an outline of what you predict
[00:23:33.330]Austin Duerfeldt: A farmer operation is going to look like either on a yearly basis or if you're just starting out, like, one of the questions brought up.
[00:23:40.200]Austin Duerfeldt: I would highly recommend doing it on a monthly basis because what you're going to find if you're new to farming is
[00:23:45.480]Austin Duerfeldt: You're going to have a lot of expenses up front, and then it's going to be a lot of income at the back end. And so you need to be able to map out
[00:23:52.350]Austin Duerfeldt: Exactly when those expenses and incomes are coming in and going out so you can kind of get an idea of what this operating a little that you might have to get going to cost.
[00:24:01.590]Austin Duerfeldt: What some of the trials and tribulations that are going to be in terms of your finances. When you know, do I have to change some of my living habits in order to afford it. But definitely starting out, if you've never done a cash flow before
[00:24:15.240]Austin Duerfeldt: Both you and L and Iowa State University extensions have some great resources in terms of cash flows. If you're needing help getting started.
[00:24:23.400]Austin Duerfeldt: And similar what Jessica brought up with what's the simplest balance sheet, I can make probably the simplest thing I can tell you for a cash flow.
[00:24:32.280]Austin Duerfeldt: Is whether it's a piece of paper and it's an Excel sheet. I would just go in and hydrate the months across the top. I read your expenses down the left hand side.
[00:24:42.060]Austin Duerfeldt: If you're not sure what those expenses are I pull out a Schedule F in that Schedule F will give you a really good detailed list of what you can probably expect to be paying in terms of what your farm operation is
[00:24:52.740]Austin Duerfeldt: And then I just started going through and enlisted amount and some of the information in terms of why don't know when the seed expenses. Want to come in.
[00:25:01.290]Austin Duerfeldt: That would be something that either A, you could talk to a lender and they'd be more than happy to kind of give you an idea when some of these expenses typically happen farms.
[00:25:09.840]Austin Duerfeldt: Or be again go into extension, whether it's University Nebraska or another university, they'll have some example Excel spreadsheets and some example PDFs, they'll show you kind of when they expect some of these expensive come through.
[00:25:26.280]Jessica Groskopf: So Tara looking at cash flows this year. What are some things that you're watching as a lender.
[00:25:33.030]Tara Janda: So I would say the big one that we've been watching for quite some time is family living expense and that is a that is a hard subject to broach but if the operation is truly
[00:25:44.220]Tara Janda: If there is no off farm income, we have to account for family living and we have to be honest about it. Otherwise, I mean as far as this year.
[00:25:52.680]Tara Janda: You know some of the farm inputs have come down a little bit. So that's a that's positive. And obviously we're able to put it a little bit higher for market prices. This year, but
[00:26:03.090]Tara Janda: That's, that's what we've seen, for the most part.
[00:26:07.080]Jessica Groskopf: Dallas, from your perspective, what are you watching on those cash flow documents.
[00:26:12.900]Dallas Zimbelman: I agree. Iterate with her said
[00:26:16.560]Dallas Zimbelman: Family Living as the big variable within the operation and never not one operation is like the other in that circumstance. So it's just finding out works what works best for the borrower.
[00:26:27.210]Dallas Zimbelman: I think with where we're seeing prices go IT'LL NOT inflating that cash flow too much and just trying to take maybe a more realistic approach.
[00:26:40.500]Dallas Zimbelman: With that, and then the second thing would be the government payment as of now, we're not including them in cash flows and so it's just we didn't count on them last year. And we're not going to rely on them this year to cash flow the operation.
[00:26:59.070]Jessica Groskopf: Austin any follow up comments.
[00:27:01.890]Austin Duerfeldt: Yeah, in terms of
[00:27:04.710]Austin Duerfeldt: One of them's kind of just, I don't know if I want to call it a peppy, but when when you're dealing with Catholic cash flows and family living
[00:27:12.180]Austin Duerfeldt: I highly polished individuals to if they want to put family living on there, that's fine. But I would much prefer to have a cash flow that was strictly business.
[00:27:22.770]Austin Duerfeldt: And then instead of having Family Living have a, like a wage account. It doesn't necessarily have to be
[00:27:29.790]Austin Duerfeldt: A wage where you're doing it for tax purposes and keeping track of that stuff, but have a set amount where you know for me to be a
[00:27:38.190]Austin Duerfeldt: Hired worker for this farm operation. I want to take home. Maybe it's $50,000 a year. So I take 50,000 divided by 12 and that would be the monthly amount and so that way you're kind of controlling
[00:27:50.670]Austin Duerfeldt: What that family livings doing and you can start budgeting, because a lot of times
[00:27:55.050]Austin Duerfeldt: Looking back at like the 2012 and 2013 when we have that rent up and green prices Family Living really got out there to the point where
[00:28:02.130]Austin Duerfeldt: You had some farm operations buying the vacations homes and some other things and and the the commodities and the markets didn't substantiate that for long term.
[00:28:12.900]Austin Duerfeldt: And when you're looking at trying to price green. I know grain prices just mentioned $5 corn and $13 soybeans. But if you're wanting a more long term level headed approach as a child, evaluate, I would recommend going to
[00:28:30.660]Austin Duerfeldt: The USDA and pulling up one of their forecasted amounts. And so, for instance, the USDA is forecasting 2021 grain prices corns of 365 and soybeans are at $10
[00:28:42.810]Austin Duerfeldt: I would much rather have a conservative cash flow statement and conservative balance sheet and end up being better off in the year than that.
[00:28:50.580]Austin Duerfeldt: Then I would do have it be the other way around, because I'll get myself dug in some problems. If I go out and start spending money like I've got it and I don't
[00:29:01.230]Jessica Groskopf: Know,
[00:29:02.070]Tara Janda: I think Austin brings up a really great point. Um, you know, that's, I would say the run up and corn. The last time is really what caused family living to get out of control and we have to just be honest with ourselves and our operators that
[00:29:15.810]Tara Janda: You know if if 50,000 is the wage, then that's what we're going to do. And that's how we're going to calculate our break evens because really that cash flow is going to help you to figure out where do I need to market. My grain to cover
[00:29:27.600]Tara Janda: Everything for the year. And if we need to include family living. That's great.
[00:29:31.980]Tara Janda: If we have some non farm income that's already taken care of. Family Living, absolutely. You know, we've we've got that we've got the checks and balances in place and
[00:29:40.950]Tara Janda: And conservative on the cash flow and it's similar to the balance sheet transit Dallas mentioned earlier, if we do a cash flow each year. And we're always conservative with those numbers.
[00:29:51.810]Tara Janda: We're going to be able to see from year to year. And as we go back and compare to the year prior and reconcile. It's going to tell us where where we often so that we have a more accurate picture in the years to come.
[00:30:07.170]Jessica Groskopf: So thinking about the the recent increase in prices, how can we control our costs right when everyone's seeing green
[00:30:16.680]Jessica Groskopf: Up. And then we're also seeing them from the feeder side we're seeing grains going up. So how do we balance that in our mind and and what can we watch for here in the next few weeks, as we plan our operations for the next year.
[00:30:31.470]Jessica Groskopf: Austin will start with you.
[00:30:36.780]Austin Duerfeldt: So, somebody else will start on that one. Um, yeah, it's
[00:30:43.560]Austin Duerfeldt: My biggest recommendation for farmers and ranchers is
[00:30:48.660]Austin Duerfeldt: You got to have a long term plan. What exactly is it that you're trying to accomplish.
[00:30:53.820]Austin Duerfeldt: And for instance, I'll just use our farm operation here in southeast never asked it at some point in time in the future.
[00:31:00.780]Austin Duerfeldt: I would probably imagine the next 10 years we're going to have to buy out the relatives. When the grandparents passed away. So we're going to have to come up with chunk of change and so
[00:31:11.130]Austin Duerfeldt: When we see grain prices increasing like this. We're not making huge changes in terms of where you know we're spending more on seed or something like that. We're trying to squirrel away money so that we've got
[00:31:24.630]Austin Duerfeldt: What we're going to need for the downpayment and the purchase of land and equipment in the future.
[00:31:30.090]Austin Duerfeldt: And so if you've got a, you know, five or 10 year plan and you're using that to dictate what your expenses and stuff are I think that will rain you in when you start seeing these wild swings in terms of prices. That's what you should be doing.
[00:31:46.350]Jessica Groskopf: Any additions Dallas.
[00:31:51.240]Dallas Zimbelman: I would just hit on income tax time i don't i would encourage people not to go out and purchase a lot of different equipment or anything to avoid
[00:32:03.300]Dallas Zimbelman: That income tax obligation to know if there's something that you can do to maybe move you lower tax bracket from paying
[00:32:10.710]Dallas Zimbelman: A higher percentage. I think that's important to work with your accountant to see where you're at, with that.
[00:32:16.650]Dallas Zimbelman: But just don't make sure that you're trying to avoid that income tax obligation by potentially increasing term payments or other things that could be detrimental to the operation in the long term.
[00:32:30.720]Jessica Groskopf: And Tara, any final thoughts.
[00:32:33.240]Tara Janda: Yeah, I think just to re echo stick with your plan don't have a knee jerk reaction these markets have always been moving
[00:32:42.030]Tara Janda: But you're in, you're out those that stick with their plan. I once heard it, it has a baseball analogy that it's a law of averages and averages. Okay. Because that home run is just that it doesn't always come around.
[00:32:58.350]Jessica Groskopf: Alright, I'm going to take a question from the chat box again please go ahead and type your questions either into the chat box or into the Q AMP a
[00:33:07.740]Jessica Groskopf: We will get them answered by our panelists. So this question is we have the opportunity to purchase part of a deceased relatives property. How do we figure out if it will cash flow and where do we go for a lender so Austin. I'm going to start with you on that one.
[00:33:25.350]Austin Duerfeldt: So again, all you know go on to extension to find out some of those example cash flows are helping you work out their cash flow, especially for
[00:33:34.200]Austin Duerfeldt: If you don't have any farm equipment, you're looking at whether it be cash renting or custom operations. There's resources available to help you try and get a grasp on what the local cash rental rates are
[00:33:45.840]Austin Duerfeldt: Or what some of the costs might be if you're going to go out and custom higher operations done in terms of finding a lender.
[00:33:54.180]Austin Duerfeldt: Again, working with your current bank is always something that I stress it because you've got that relationship built if they're not comfortable with doing operating loans or managing foreign ground that that regard.
[00:34:09.270]Austin Duerfeldt: Definitely you can reach out to extension or you can do a search and you'll find, for instance, we've got two very qualified individuals today that would definitely be able to handle things of that nature.
[00:34:23.700]Jessica Groskopf: So, Dallas. How would you recommend they go about finding a lender.
[00:34:30.240]Dallas Zimbelman: I think if they even have a relationship on the personal side with an institution that would be where I would start
[00:34:36.630]Dallas Zimbelman: Because they do not know you as a farmer, but they still do know you and maybe would be able to connect you with the right individual for your situation.
[00:34:46.860]Dallas Zimbelman: The extension is a great resource for all things with getting started. So your county typically has an extension agent through you and all that would be a good resource for you and word of mouth.
[00:35:00.810]Dallas Zimbelman: After round for your area where you're at and seasoned get recommendations from other individuals on going blender to work way in your area.
[00:35:11.850]Jessica Groskopf: Tara, any final thoughts.
[00:35:15.990]Tara Janda: Yeah, I, you know, just as some of your most trusted advisors.
[00:35:20.490]Tara Janda: Where they would send you to. And it also doesn't hurt to
[00:35:25.260]Tara Janda: To be real upfront and honest with folks and say, You know, I'm looking for a new lender.
[00:35:30.000]Tara Janda: Can you show me your products and what you can do. And so, you know, I know a lot of us have done that, over the years, like with home loans.
[00:35:38.430]Tara Janda: You know, at the end of the day it's a real estate purchase is still an ag loan and it's nice to know your options.
[00:35:46.500]Jessica Groskopf: And I think that lender when
[00:35:48.180]Jessica Groskopf: When you can go and interview them. Don't be afraid to walk into multiple institutions, sit down.
[00:35:54.390]Jessica Groskopf: Lenders are kind of like hairstylist. If you don't like them find a different one. And also ask those tough questions.
[00:36:01.800]Jessica Groskopf: You know what, not only what are the terms. But how can you help me. And are you willing to work through this process with me because they will also help you
[00:36:10.260]Jessica Groskopf: Develop that that cash flow and that balance sheet to help you understand what you're getting into. So we have another question from the chat.
[00:36:19.590]Jessica Groskopf: Dallas and Tara, can you speak to the change in long term interest rates for land and building refinancing over the last year, how have those rates in your institutions changed. So we'll start with Tara on this one.
[00:36:36.960]Tara Janda: So I always say my crystal ball is broken.
[00:36:41.550]Tara Janda: Last fall, we saw an interest rate drop. And so for my for my career I call my customers I did rate conversions on their land loans.
[00:36:52.410]Tara Janda: Oh wait, then March rolled around and and rates dropped even further. So, you know, I think it's really just being aware of what's happening in the economy and
[00:37:05.010]Tara Janda: Right now, I mean, I think it's, it's very well known that these long term interest rates are extremely low and and you can and you can lock in on on low term interest rates right now so
[00:37:17.610]Tara Janda: I think it's definitely a a leg up for AG producers to lock in some long term fixed money that may be really a valuable asset down the road to their cash flows.
[00:37:30.570]Tara Janda: If we would see our variable rate interest rates prime and in the 10 year Treasury. If we see those to start really moving
[00:37:38.730]Tara Janda: I always say, Don't put all your eggs in one basket and and you know moderate and and kind of blend that risk across your portfolio appetite for risk is always based off of an individual
[00:37:51.720]Tara Janda: You know, it's no different than you've if you go a variable rate that's going to be your highest risk if you do a 30 year fixed that's going to be the most conservative route and you know there's somewhere in between for everyone.
[00:38:05.970]Jessica Groskopf: Dallas any follow up comments.
[00:38:09.780]Dallas Zimbelman: I would just reiterate with Tara said for the interest rate environment is interesting because we've never seen anything like
[00:38:17.370]Dallas Zimbelman: The pandemic before. And so it's hard to know where things are going to go in the future, but we have seen rates lower and even operating costs as well. So that's been a positive
[00:38:29.010]Dallas Zimbelman: Take advantage if you can. But again, with this environment. It's not one that we really know what the future will hold with everything that we've seen so
[00:38:40.620]Dallas Zimbelman: Again, like Tara, said the crystal ball would be nice. But unfortunately, we just don't have that.
[00:38:47.760]Jessica Groskopf: Awesome. Again, if you have questions, please go ahead and put them in the chat. I have another one from the Q AMP a box as well.
[00:38:54.870]Jessica Groskopf: When looking at purchasing farmland as a young producer, how do you talk with your lender about getting a guaranteed loan.
[00:39:03.090]Jessica Groskopf: Whether that's through the FSA beginning farmer program or a secondary market to secure a lower interest rate on a long term loan. So we're actually going to start with Dallas on that one. If you need me to repeat it. I will
[00:39:17.400]Dallas Zimbelman: And yeah, that would be great. Thank you. Yep.
[00:39:19.920]Jessica Groskopf: So the question is, when looking at purchasing farmland as a young
[00:39:23.880]Dallas Zimbelman: Producer
[00:39:24.810]Jessica Groskopf: How do you talk to your lender about getting a guaranteed loan.
[00:39:28.770]Jessica Groskopf: Whether through FSA beginning farmer program or on a secondary market.
[00:39:36.240]Dallas Zimbelman: I think just that just going into your lender and asking those questions and having a dialogue about it and finding the program that works will work best for your situation as the more research and information you can bring on the front end is always helpful.
[00:39:53.520]Dallas Zimbelman: When you're saying your beginning farmer. What does that mean to you, or you know, are you looking at cattle.
[00:40:00.360]Dallas Zimbelman: crop row crop, how many acres. The more information that you can bring to that meeting is is always helpful and I think just asking those questions is a good way to get started and the lender can work to find the best scenario that work for your situation.
[00:40:19.320]Jessica Groskopf: Tara any follow up.
[00:40:24.150]Tara Janda: Absolutely. What Dallas said, and I would just echo that FSA is is a really great place for our young and and beginning producers to start and
[00:40:33.270]Tara Janda: They have those programs for a reason. And they have Eligibility Guidelines for a reason. It is really to cater to that to that segment wanting to get an agriculture and so
[00:40:43.620]Tara Janda: Don't be afraid to look at FSA. They have a lot of information online on their websites.
[00:40:48.900]Tara Janda: You know their local office offices are also a really great resource and and i mean realistically for for a young person to purchase land.
[00:40:58.680]Tara Janda: It's, it's a really viable option for for that first land purchase and so i i highly recommend for young producer to partner with FSA. And it take advantage of some of those programs as they're getting started.
[00:41:17.790]Jessica Groskopf: Who can I ask, in addition to my lender about improving my cash flow. So we'll start with Austin on that question again. The question is, who can I ask, in addition to my lender about improving my cash flow.
[00:41:32.430]Austin Duerfeldt: Well, I would highly recommend you know
[00:41:35.340]Austin Duerfeldt: Pitching our own organization extensions there to help you kind of glance here and get an idea of where you're at, compared to what we're seeing with other farms and ranches in the area.
[00:41:46.470]Austin Duerfeldt: To a lesser extent, I would tell you tax preparers probably have a fairly good idea of what farm operations are spending in your area for different production sizes and they would probably be able to help
[00:41:58.200]Austin Duerfeldt: Guide and walk you through in terms of creating that cash flow, but definitely I'd reach out to your local Extension definitely just care myself for examples.
[00:42:09.390]Austin Duerfeldt: To get an improved cash flow or try and get a grasp on how to make it, make it better, from what you've got.
[00:42:16.830]Jessica Groskopf: I would also recommend Nebraska farm business, Inc. They produce a report every year that shows the cost, the average cost of production of producers within
[00:42:26.820]Jessica Groskopf: Their system and so that allows you to look at, okay, my seed cost is in this percentage of their report. So what does that mean for me. Do I need to go shop around
[00:42:40.380]Jessica Groskopf: For seed or look at my seeding rate and start to ask yourself those questions of why is this so high.
[00:42:47.280]Jessica Groskopf: I think one of one of the faults. Sometimes a producers, is that they're overly loyal to a specific brand or to a specific company or to have a sub specific salesman and so sometimes maybe they're paying a higher price.
[00:43:01.680]Jessica Groskopf: Then maybe their neighbors and your, your financial
[00:43:06.690]Jessica Groskopf: Position is independent to who you are. And so maybe there's a reason you're paying out and it's a good reason. But sometimes, you know, being able to suck those expenses in
[00:43:16.320]Jessica Groskopf: Requires you to shop around and I know that can be hard for some people, but it is important, especially if you're looking at that cost of production.
[00:43:24.480]Jessica Groskopf: Or your banker has asked you to work on improving your cash flow is to really look at where can I improve without docking my yield or without docking my production. Any additional comments on that. I'll start with Dallas.
[00:43:41.430]Dallas Zimbelman: I think that's all great.
[00:43:43.800]Dallas Zimbelman: And just kudos for wanting to improve your cash flow, first of all, that that's a great start is just having that desire to do that.
[00:43:51.480]Dallas Zimbelman: Another thing that you can do is that field by field analysis, instead of looking at the big picture. Sometimes it comes down to breaking it down by field and in finding out
[00:44:01.560]Dallas Zimbelman: Maybe you're you're dumping more inputs into this field versus another field and sometimes taking that detailed approach. You can find ways of cutting back expenses that way.
[00:44:15.510]Jessica Groskopf: Tara any follow up comments.
[00:44:18.660]Jessica Groskopf: We do have a comment from the chat and they say it could be also be a problem on the marketing side. So making sure that you have a good marketing plan.
[00:44:27.150]Jessica Groskopf: And that you're executing that marketing plan. So for example, I, you know, looking at that price around up today not overextending yourself but looking at if this is the price reality that we live in.
[00:44:38.610]Jessica Groskopf: Should I be marketing some grain. At this point, marketing can also play an important role in your cash flow. So another Oh, go ahead.
[00:44:48.810]Tara Janda: I was gonna say in tying into that too. We've, we've touched on marketing here and it brings up another great point of discussion is
[00:44:58.650]Tara Janda: Making sure that all the players in the game, know what your financial planner and so most every
[00:45:05.130]Tara Janda: AG producer works with their crop insurance agent. They work with their lender and they work with their marketing team.
[00:45:12.210]Tara Janda: Making sure that those players are on the same team because with crop insurance. You've, you've got some some opportunity to potentially market and and that crop insurance is going to offset that risk and so
[00:45:25.680]Tara Janda: I think it's just important to bring all the players to the table and and make sure that you're all following the same plan because
[00:45:32.880]Tara Janda: As a lender. We're going to say here's what we want to focus on your marketing advisors going to say, well, this is what we're going to focus on
[00:45:39.360]Tara Janda: And your crop insurance agents going to protect some of that risk. Right. They're going to say this is what we need to focus on. And so, just making sure to bring everyone together and say this is my business. And these are you're surrounding yourself with those trusted business advisors,
[00:45:54.750]Jessica Groskopf: Often, do you have anything to add to that.
[00:45:58.890]Austin Duerfeldt: Just in terms of if you're if you're building your dream team for for advisors and baseball definitely include your tax accountant in that list just because
[00:46:07.950]Austin Duerfeldt: Again, the objective isn't to pay zero dollars in federal and state taxes, the objective is making sure that you're
[00:46:15.420]Austin Duerfeldt: You know, if you generally fall on the 20% tax bracket and you've got a year like this one coming up where corn prices and soybean prices are up.
[00:46:23.730]Austin Duerfeldt: Maybe we do need to do a little bit of changes around so that you know if it's a matter of spending $10,000 get back in that 20% bracket.
[00:46:32.490]Austin Duerfeldt: We can get that done. But the tax account. Again, their main objective is to handle and optimize your tax. And so making sure they understand what the overall game plan is and what everybody else is doing is important.
[00:46:47.850]Jessica Groskopf: Right, we're going to take another question from the chat box and I really love this question. So thank you to the participant who who typed this in. It says, Is there a difference.
[00:46:56.970]Jessica Groskopf: In having this conversation between arrangers versus farmers, how does the discussion regarding improving cash flow and configuring a balance sheet look different for cattle rancher in Nebraska right now.
[00:47:08.340]Jessica Groskopf: So again, how does this conversation look different regarding improving a cash flow and a balance sheet look different for cattle rancher. So we're actually going to start with Dallas on that.
[00:47:22.560]Dallas Zimbelman: It is different. You can't always cut back expenses to the extreme that you can on a farmer, because let's face it, cows need to eat and their health needs to be taken care of.
[00:47:35.100]Dallas Zimbelman: And so you don't have a lot of the room to play with, with that aspect. And so, yes, it is a different
[00:47:44.460]Dallas Zimbelman: Conversation and improving the cash flow will look very different from from a rancher to to a farmer and balance sheets, the same way. You've got market livestock up top and reading in the middle. And so there there are different conversations that that has to be had.
[00:48:03.840]Dallas Zimbelman: With that, and finding somebody that understands that in and knows your, your long term plan with your breeding heard and that is all more critical for you rather than just a farmer.
[00:48:21.780]Jessica Groskopf: Tara, what comments do you have to add
[00:48:24.570]Tara Janda: Yeah I echo at Dallas said, and you know on the on the cow calf or the feedlot side, we have to be a little more patient, it's going to be a little bit slower transition to make those improvements typically to that balance sheet.
[00:48:37.590]Tara Janda: Because we just have to we have to wait a little longer for calves to be born and for casting it sold and so
[00:48:44.370]Tara Janda: But that same principles come into play. It's, it's really taking an in depth look at analyzing your own operation and and really going through and saying, you know what
[00:48:55.470]Tara Janda: This year, hey was really expensive. What can I do to offset that next year or, you know what, maybe, maybe I'm paying too much for stocks and I can you know
[00:49:05.940]Tara Janda: I could maybe I can pay someone to actually watch my cattle versus paying the rent that I am for stocks right now right across the road. I mean, some of those conversations you really have to look inside and say, is this the right business decision for me.
[00:49:22.470]Jessica Groskopf: Just a reminder. We're coming up to the end of the hour. We have about 10 MINUTES LEFT WITH OUR PANELISTS so if you have a question, you would like to have answered.
[00:49:31.290]Jessica Groskopf: Please make sure you get it into the chat box or into the Q AMP. A, both of which can be found at the bottom of your screen.
[00:49:38.640]Jessica Groskopf: So this is a question we actually talked a little bit about prior to opening the webinar. We're going to start with Austin. Do you have any information.
[00:49:47.520]Jessica Groskopf: wisdom to share about to the second round of the paycheck protection program that is available and how that money might be more accessible to producers at this time versus the last time, or the last covert stimulus package so Austin. What are your comments on that.
[00:50:06.720]Austin Duerfeldt: My first comment is. Today is January 14 2021. And so if you're watching this in the future. Even if you wait a couple of days before you go talk to your lender.
[00:50:16.590]Austin Duerfeldt: There's likely a chance that something's going to change that. Again, this is a program that is constantly thrown in different loops and guidelines and changes and notices and memos, to the point where it, it's almost a full time job just trying to keep up and keep on top of this.
[00:50:35.430]Austin Duerfeldt: The, the changes and authorizations that they did come out with. Yes. They've got a second drawn the PPP loans that you can go out and get borrowed on
[00:50:46.020]Austin Duerfeldt: Those clothes on March 31 2021 the eligibility to my understandings is a bit stricter
[00:50:54.180]Austin Duerfeldt: But it is there, and it is available. The other thing that they've done is for farmers and ranchers. They changed the way the first PPP alone worked
[00:51:02.700]Austin Duerfeldt: To the point where you can go in and have your calculation for alone re evaluated and possibly increase depending on what what's your taxes and guidelines are free her operation financially.
[00:51:19.470]Jessica Groskopf: Yeah, let's do you have any follow up comments on the PPP
[00:51:25.110]Austin Duerfeldt: I would
[00:51:25.770]Dallas Zimbelman: Say, if you have a schedule as in your income tax return. I would recommend reaching out to your lender and and just evaluating if you're eligible and why you're eligible for. I just remember to be patient with your lenders.
[00:51:39.870]Dallas Zimbelman: They may not know it all. Yet they may not
[00:51:44.490]Dallas Zimbelman: Be able to process applications, whatever stage or lenders that could be could vary so just be patient with them and do know that they are going to get to back to you as soon as that they possibly can, but
[00:51:57.870]Dallas Zimbelman: Again, if you have the schedule up in your income tax return. I would encourage you to reach out to your, to your lender.
[00:52:04.530]Dallas Zimbelman: And see if they can assist you with any of this round of funding.
[00:52:09.840]Jessica Groskopf: Tara, any comments.
[00:52:11.670]Tara Janda: I think the other two did a great job of summarizing a program that's consistently changing
[00:52:19.200]Jessica Groskopf: Alright, so I'm not seeing any more questions in the chat. But if you have a question, please make sure that you go ahead and get that in there. Austin, as we look towards 2021. Are there any final thoughts for this this season of planning for producers on the call.
[00:52:40.920]Austin Duerfeldt: The only thing that I could maybe mentioned, you know, Gary up on is, I know I've been receiving a lot of phone calls from landlords asking about capturing all RATES, BECAUSE HE SEE THE LOCAL prices on grains.
[00:52:52.200]Austin Duerfeldt: And that's a conversation of generally what I i've been pitching on my end when they call me and asked me what my thoughts are is again look at what the Nebraska.
[00:53:03.990]Austin Duerfeldt: Farm income has been for 2020 you're looking at almost a third of farm income from last year coming from government payments and we don't necessarily expect to see that again. And so, yes.
[00:53:15.300]Austin Duerfeldt: prices are going up. We haven't returned to those 2011 1213 net farm income levels. We're back down to what I would have said that they average was for maybe 2006
[00:53:28.410]Austin Duerfeldt: Nine. And so things are on the increase, things are on the rise. We went through the low we're working our way back up, but I don't know if I would necessarily say
[00:53:37.470]Austin Duerfeldt: This is a time that we're going to start seeing a whole bunch of drastic increases in rental rates and land values. I think we're just starting to take back to that level where we might start seeing those changes. But I don't think we're quite there yet.
[00:53:51.960]Jessica Groskopf: Tara, any final thoughts.
[00:53:56.040]Tara Janda: Now I think just to summarize, I mean, it always goes back to communication and you know if you have questions asked. And we're really as lenders.
[00:54:08.220]Tara Janda: We really are here to help and and it's it's not always fun to point out flaws and an operation. But typically, if you step back and take a look.
[00:54:18.450]Tara Janda: You're going to probably at some point agree it might not be that same day, but
[00:54:24.270]Tara Janda: But I would say for most AG lenders our hearts. Early in it to keep agriculture going in Nebraska and and we want to see that transition to the next generation. And so as lenders, we're doing everything we can to make sure that your operation is viable and successful for the long run.
[00:54:42.480]Jessica Groskopf: In Dallas, any final thoughts.
[00:54:46.020]Dallas Zimbelman: I don't think I could have said it better than Tara dead as just remember your lender is your advocate, even in those hard conversations
[00:54:55.350]Dallas Zimbelman: The lender has your best interest to truly in mind with those conversations and
[00:55:02.250]Dallas Zimbelman: We want to celebrate with you in the good years and be there to be a tool and an advocate for you. Sometimes when things don't go quite as planned. So just see them as an advocate and communicate and have a good relationship with your lender.
[00:55:22.050]Jessica Groskopf: Awesome. Well, thank you, Dallas and Tara, for joining us today and thank you everyone who participated in this webinar a recording of this webinar will be posted at farm that url.edu
[00:55:34.260]Jessica Groskopf: Where you can also register for other upcoming webinars, which usually happen every Thursday at noon Central time
[00:55:41.550]Jessica Groskopf: Remember to visit farm.us now.edu for a schedule of upcoming farm and ranch management webinars and
[00:55:48.630]Jessica Groskopf: As well as view the recordings of past webinars, you will be receiving a short survey in your email, we would really appreciate your feedback on today's webinar and your input on future sessions. Thanks again for joining us.
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