What is in this article?:
- Agriculture's good times: Will they continue in 2014?
- Land price outlook hard to discern
- Farm bill implementation still murky
“It’s no secret farming expenses are going up, and if the USDA analysts are right, we could be facing a little squeeze," Mississippi Land Bank Chairman of the Board Abbott Myers said at the organization's annual meeting. "On the other hand, the USDA and prognosticators aren’t always right."
ABBOTT MYERS, from left, his wife, Sheryl, Dundee, Miss.; and Mikki and Jim Cassidy, Marks, Miss., were among those attending the annual meeting of the Mississippi Land Bank.
Farm bill implementation still murky
On the legislative front, he says, “The good news is, we have a farm bill. The bad news is, we don’t really know what’s in it, or how some of the provisions will be implemented.
“Anybody who farms needs to be very careful in the decisions they make with this new legislation. In some cases, it’s going to be a challenge to try and outguess the government and outguess the markets at the same time.
“And the farm bill fight isn’t over yet — it’s ongoing. Right now, some in Congress are trying put a limit on the crop insurance provisions.”
Political conflicts can be a major influence on markets, particularly exports, Myers says. “Ukraine is a really important agricultural region — they’re just beginning to adopt modern machinery, seed, and advanced technologies. They grew a tremendous corn crop last year. But their political situation is anything but stable, and we don’t know how it’s going to play out in terms of the role as a competitor.
“Probably the greatest impact on our markets is the biggest unknown — weather. Weather gave us great yields last year, but with the cold, rainy weather we’ve had, many of us are already behind in planting this year’s crops, and who knows what harvest will bring?”
Farm bill support tools and calculators can be found here: http://bit.ly/P3x0FR
In their report on Mississippi Land Bank performance for the past year, Myers and the organization’s president, Gary Gaines, said growth continued “at an impressive rate,” topping the $500 million mark.
“After a record-breaking year in 2012, we bettered that in 2013,” Gaines says. “Our net volume was $131.7 million, which increased our loan volume to almost $530 million outstanding at year end — a 5.5 percent net increase for the year, quite an accomplishment.
“We had three branches with over $100 million in loan volume outstanding. Three years ago, we didn’t have any branches at $100 million. This reflects a tremendous effort from our staff. And credit quality, at 99 percent, continues to be top-notch. I’d stack that up against any financial institution today.”
Net interest income remained strong in 2013, with strong patronage dividends,” Gaines says. “Our assets continued to grow, as did our loan volume and member equity. Our permanent capital ratio was strong at 15.34 percent. This will allow us to weather potential difficult times in agriculture and continue to provide credit in good times as well as bad.”
Last year, Myers says, patronage dividends returned to stockholders totaled $1.8 million. “Over the last four years, Mississippi Land Bank has given back $6.7 million to stockholders. No one else in agricultural lending does this except Farm Credit institutions, and MLB is pleased to be a part of that system.
“We had a great year in 2013 — we grew at 5.5 percent. While that may not sound like a lot, last year was unusual. It was a great crop year, many farmers did quite well, and a lot of our borrowers paid off loans or paid down loans.
“That’s great — lenders always like to have loans paid off. They like for farmers to prosper. But that means we have to go out and make more loans to keep our volume up. So, a 5.5 percent growth rate in a really good farming year like 2013 is outstanding.”