white shadow - 2/8/2025 14:03

This will be hard and there a lot of guys on here smarter than I am, but here I go. I am not a banker, but I do love that business, regardless my views are from being a somewhat old dirt farmer not a financial expert by a long shot.

1. I think the balance sheet is a terrible indicator of revenue producing capabilities of a farm on a yearly basis. The balance sheet is collateral for people to borrow money not a measure of profitability. Erosion of balance sheet assets really only matter if they are needed for collateral, however--

2. If you have a bank that continues to allow you to lose balance sheet strength without out giving you guidance and help to correct the decline you need a new banker. You don't want to ride your assets to zero value. If you cannot take steps to stop the erosion of value maybe an exit from the business platform is prudent when you still have some equity.

3. We are not the Government. We cannot keep borrowing past our ability to service the debt. Outside of giving you power to borrow I am not a big balance sheet guy as an economic indicator of financial prosperity. Earned net worth is where the rubber meets the road for me as an indicator.

4. The grocery store in Vergas, Minnesota is the only one I know that will let you charge. :) LOL

Good luck to you. In the next 3-4 years it might be important to have a banker that will be tough and honest with you. Prophecy is only understood when it has happened, and it is too late to change it.

I will say, if it looks like I can't make it in the next few years, I would quit while I was ahead instead of going into debt this late in the game. The fact I don't have to make payments on anything (no car payment, no house payment, no credit card payments, no combine payment, no nothing) I think give me a lot more "wiggle room" in an economic downturn, the only monthly bills I have is utilities and groceries.

I do appreciate the answer.