BLOOMINGTON – Agriculture is going through a phase of tremendous transition when it comes to yields, marketing and gross dollars involved in an operation.
Brian Davis, with the Bloomington branch of 1st Farmers State Bank, encourages producers to be more deliberate and intentional in their farm planning while communicating those plans with all involved stakeholders.
“I think that gives the producer a lot more control,” Davis told The Central Illinois Farm Network recently.
Between 2006 and 2012, many farmers could get by with a plan they didn’t stick to while still being successful due to high commodity prices and good yields, but times have changed.
“We are looking at the budgets and plans and trying to understand what the contingencies are,” Davis added.
We have seen a tight ag economy, lower grain prices and decent yields the past few years but these are factors you can’t always count on, according to Davis.
Interest rates have been a big topic over the past year as the Fed moved short-term interest rates quite a bit over the past 12-18 months. This movement was more than ag borrowers were used to during the past decade.
“The economy is hot right now but also a bit fragile,” admits Davis. “You’re seeing that the Fed is moderating their tone.”
Interest rates are likely to moderate on short-term operating money but term rates for equipment and land are still holding steady with not as much movement.
1st Farmers State Bank serves both agriculture and commercial customers and is located at the corner of Towanda-Barnes and GE Road in Bloomington. The phone number is 309-663-6200.