AG Pulse 2003: Ag Lenders Assess Year Where Good Was Bad, and Bad Was Worse. (Community Banking)

We've lost every one of our young said Gary Canada, president of Bank of England, Ark., historically home to numerous cotton, rice, and soybean producers. when Canada gave his grim report, it was with a difference. England lost these farmers, he said, not to disaster or mismanagement, to a wholly new factor. It's not that they went broke, said Canada. just got tired of it. Canada explained that the modern farmer's paradox--have a bad crop year, make less money, have a great crop year, make even less money because prices become depressed--proved more than these young farmers were willing to cope with anymore. They were young enough to back out and to try to reconfigure their lives. Other farmers in the area, with more years and more resources at stake, hang on and hope. We don't have a money crop right now, said Canada. farmers are just trying to find one that costs them the least to produce. the departure of the young farmers and the unsuccessful search for a profitable crop has brought about something Canada never expected to see--viable farmland simply sitting idle. Not because of a government set-aside or a conservation effort, solely because no one wanted to farm it because it wasn't worth the time and effort. This is the first time we've had land that wasn't farmed, said Canada. Even with the recent farm bill's continued emphasis on federal farm support, Canada said, his producers need still more money out of Washington. Canada, whose bank is $78.6 million in assets, was one of a group of veteran farm bankers who gathered during the recent ABA National Agricultural Bankers Conference. While not all bankers reported the same degree of gloom that Canada did, few had much good news to share. Here's a state-by-state sampling: big story this year has been report Pohlmann, president of $55 million-assets Ravenna Bank in the south central part of Nebraska. While 75% of his market is irrigated and produced well enough, Pohlmann explains, upland crops, not irrigated, were a loss. And cattle has been iffy, to use his words, because producers had to do a lot of early weaning and supplemental feeding due to the lack of readily available forage. In Oshkosh, in the western part of the state, the report was a bit cheerier still worrisome. Mike Jorgensen, president and CEO of $28.7 million-assets Nebraska State Bank, said the local source of irrigation water, a lake, fell 29 feet below normal levels, such were the demands of the area's rain-starved farmers. Dennis Everson delivered his report with a bit of vaudevillian timing--if only the punchline were cause for laughs. We averaged 500 bushels production, deadpanned Everson. A pause, and then he continued. But that wasn't per acre--that was per farm. The drought hit South Dakota too, he explained. It's nothing government money -- and water -- can't cure, said Everson, the existing backstops leave a hole. Crop insurance, for instance, brought stricken farmers a helpful payment for their lost crops, he said, but the payment doesn't quite pay off the bills. Idaho was also affected by the drought, deep wells have provided a critical reserve for producers, according to Terry Hales, loan manager, Wells Fargo Bank, Boise. However, Hales continued, surface reservoirs are nearly empty. There's enough water to carry local crops through to about mid-2003, and after that, there could be trouble. William Wright, whose Banner Bank serves farmers in Washington, Oregon, and Idaho, said the lack of rain throughout the region had left the cattlemen hurting. …

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