Squirming in a mesh basket as they're scooped from a murky pond, hundreds of catfish are about to be trucked off to a local processor.
Watching some of the 60,000 live catfish being hauled from the ponds at the Roberts Brothers' 250-water-acre Sunflower County catfish farm, Tim Mood, vice president of $129 million-asset Community Bank, Indianola, has a rare opportunity to see the product he's financed.
But Mr. Mood and other Mississippi Delta aquacultural lenders don't have to see a catfish to believe in it.
"This is a part of the portfolio that we are aggressively trying to grow," Mr. Mood said from the white Chevy truck he has steered down a thin strip of land between two of the Roberts' ponds.
Many agricultural lenders don't know the specifics of financing the whiskered fish, but many of the catfish lenders' concerns - like price fluctuations - will be familiar to any farm lender.
Mississippi produces about 70% of the nation's catfish, according to John E. Waldrop, a professor emeritus of agricultural economics at Mississippi State University.
Catfish swim in about 100,000 acres of ponds in farmers' fields in the state, compared with about 17,000 acres in late 1970s, he said. Farmers average about 4,000 pounds of catfish per acre, he said.
Farm-raised catfish have proliferated here for several reasons, including abundant clay soil that holds water, an extensive underground aquifer system, and a long growing season, said Walter Harrison, marketing manager of Delta Pride, an Indianola catfish plant that is said to be the nation's largest freshwater fish processor.
Several years ago, oversupply of the unsubsidized fish led to price declines, down to 40 or 50 cents per pound, scaring away producers and lenders alike, Mr. Mood said. He said the break-even price is about 61 cents.
For those producers and lenders who stuck with it, the crop today is profitable, paying about 80 cents per pound.
Mr. Waldrop said the young industry's price fluctuations have stabilized.
Moreover, growing national demand for the low-calorie, high-vitamin fish bodes well for producers and their financiers, he said.
That's not to say there won't be unprofitable periods. "But if you look at it over the long run, I don't think there's another industry that shows as much potential," Mr. Waldrop said.
Community Bank has no complaints. "We have no catfish customer right now that we are concerned about," said Joe Ricotta, another vice president at the bank. The bank says it wants to achieve an equal ratio of catfish to crop loans - the split is currently about $4 million in catfish to $6 million in crops - while expanding the entire agricultural portfolio, Mr. Mood said.
To do so, the bank has been advertising in catfish industry publications and working local catfish trade shows, the lenders said.
The bank also has more opportunities from existing customers.
"I would have to say every catfish farmer we finance has added acreage in the past 12 months," Mr. Mood said. "A lot of farmers take their marginal land that they have not been able to produce good row crop yields with and put it in catfish farms."
Farmers create the ponds, which are worth about $1,800 an acre, by bulldozing about four feet deep into fields and filling the holes with well water.
Farmers' main production costs are for the feed pellets that are shot into the water from trucks, as well as the fish themselves, equipment to maintain oxygen levels, and crews to take the fish to plants.
The fish aren't visible except during feedings and when they're being harvested.
"A catfish lender is probably one of the most trusting people you'll ever meet," Mr. Mood said. "I walk out to see my collateral and I can't see it."
Subsequently, lenders examine feed records to monitor production and look at the product when they can.
"We'll just watch them feed," Mr. Ricotta said. "If you look at catfish loans long enough, you know what to look for."
In addition, catfish lenders have learned to seek other collateral, such as real estate and equipment, Mr. Mood said.
Farmers stagger the growing cycles of fish so they can earn money on them at intervals throughout the year.
Although the typical growing cycle is about 18 months, farmers might not be able to sell the fish - or make a loan payment - if the fish have "off- flavor" problems. Algae can affect the fish's taste.
Fish also can suffer from lack of oxygen, predators such as pelicans, and extreme air temperatures.
Looking ahead, lender Jerry Gillespie said his biggest concern is how a 30% increase in feed prices will affect farmers' income this year. Mr. Gillespie is president of Guaranty Agricultural Credit Corp., a subsidiary of $100 million-asset Guaranty Bank and Trust in Belzoni, Miss., the nation's catfish capital.
About half of Guaranty Agriculture's loans are for catfish, a percentage that Mr. Gillespie said he thinks is about right.
"As long as the fish price stays up, it's still a good, profitable business," Mr. Gillespie said. "Just realize that this is a cyclical business just like any other agricultural commodity. We may be enjoying real high prices right now, but there'll be a time when the train goes the other way."