Q: How is agricultural loan demand at your bank this year? HARLAN K. YATES President and chief executive, Cisne (Ill.) State Bank
So far it's been good. Of course, the farming season's just starting here and we're wet right now, so nothing's been planted. You just have to wait it out and hope that they can get it planted in time to get a crop before frost in the winter or the fall.
In our bank, we're going to run about the same as we did last year. I don't see much increase. We have our customers here, and they're just going to borrow about so much.
They've done pretty good the last couple of years in yield. But you've got to remember, prices are down. Dollar-wise, they haven't done as good as they have in past years. I don't see anything that's going to change pricing from last year at this point, unless you have some areas that stay wet. B.A. DONELSON President and chief executive First State Bank, Stratford, Tex.
It's a mixed bag, actually. Cattle demand has been down because of dry weather and loss of equity. Farm demand's been up because of lack of performance. They're borrowing more earlier and have less equity to start with.
Our crops are wheat, corn, and milo - dry land and irrigated. Then, we do a lot of stocker cattle operations - that's when the calf is weaned off the cow and we put them on pasture until they get ready to go to the feed yard. (Ag lending) used to be 80(% of the loan portfolio) until we bought an S&L. It's about 50% now.
It's going to be a very difficult year here. Our wheat crop was frozen and we're not sure yet, but there's been estimates from 20% to 90% loss on wheat. So, it's going to be a tough year. JIM TRIBBETT President and chief executive Bank of Whitman, Colfax, Wash.
Our ag loan demand has been increasing moderately. There are a number of factors involved. One is a steady growth of new customers coming to us from other financial institutions. That is primarily a result of our ability to customize and relate to farmers. We're primarily wheat, peas, lentils, (livestock) - and we have some irrigation out in the Central Columbia Basin.
The positive is we have good crop conditions. The majority of our wheat is exported to the Pacific Rim. We deal in soft white winter wheat, which is primarily used for noodles. That's a good market.
The government payments are going to be reduced, according to everybody's best estimate. So that's the negative. We're guardedly optimistic in spite of the reductions in the government program. Farmers are resourceful people. They'll find a way to overcome adversity. WILLIAM LOGAN President and chief executive State Central Bank, Keokuk, Iowa
Ag loan demand has been steady compared to other years. They're looking for a delayed planting time because of the rain that we've had. That's just one more risk the farmer takes when he gets to the field, is the weather.
We had a flood in '93 and (farm customers) didn't do very well. Sometimes when you have a flood or disaster ... we do have some carryover. But since the middle '80s, we're trying to watch it as close as we can with cash flows and things like that.
We have corn and soybeans, all row crops, (and) some cattle and hog operations.
We're all watching what the farm program will be. We think that some farmers would like to be out of the farm program and be competitive and there's some people that might want to stay in the program and be subsidized.