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Discover the latest ag industry news and learn more about our AgAmerican adventures.
Senate Approves Farm Bill

The agricultural industry has received promising news via the Senate. The Farm Bill has passed with flying colors and with it brings several amazing reforms and programs to enhance crop research and pest and disease research, improve market promotion, boost nutrition, and support funding for specialty crops (fruits and vegetables), and more. This support has really restored confidence for those in the industry.

Reform features, as cited by Growing Produce, include:

  • Specialty Crop Block Grants funded at $70 million per year
  • Specialty Crop Research Initiative funded at $25 million (fiscal year 2014); $30 million (fiscal year 2015-16); $65 million (fiscal year 2017); $50 million (fiscal year 2018)
  • Coordinated Plant Management Program funded at $60 million (fiscal year 2014-17) and $65 million (fiscal year 2018)
  • Market Access Program and Technical Assistance for Specialty Crops fully funded at 2008 Farm Bill levels
  • Fresh Fruit and Vegetable Program fully funded at 2008 Farm Bill levels
  • Section 32 specialty crop purchases funded at 2008 Farm Bill levels
  • Department of Defense Fresh program fully funded at $50 million per year consistent with 2008 levels

 

Now, comes the process of waiting on the full House to also approve these acts and reforms.

Farmers have been working relentlessly to get the Farm Bill heard loud and clear, going so far as to compose a letter signed by approximately 200 supporters, including ag lending and banking groups and processing and production groups.

An excerpt of this letter briefly highlights the significance of this agricultural reform for the industry:

“The farm bill promotes an economically healthy U.S. agriculture sector. Its policies serve a variety of purposes including meeting the food, fuel and fiber needs of consumers worldwide; providing a farm and natural resource safety net; improving our balance of trade through trade promotion programs; promoting rural development; and creating needed jobs here at home.”

It all sounds solid, yet there does exist strong opposition to the Farm Bill. Hopefully, this opposition will only fuel a sound debate that intelligently explores the potential of this bill. Fortunately, it seems as though the majority is in favor. Due to a strong majority, the bill is expected to pass quickly and effortlessly. Legislation starts next week, so stay tuned! Fingers crossed for more promising news for the agricultural community!

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Farmers Less Expected to Sell Land

A major agricultural shift has recently surfaced; this shift, being that farmers have become less likely to sell their land than they were even a few years ago. This is a surprising shift given that farmers are being offered record prices for their land.

Over the last few decades, farmland has been escaping the hands of farmers and landing into the hands of developers. As farmers have retired, a younger generation of farmers has not stepped in to fulfill farming production leaving a large amount of farmland at the disposal of developers.

Because the value of land has increased astronomically, farmland has become a developer-dominated market. Record land prices and low commodity prices enticed farmers to sell. In many cases there was an urgency to cash in while they could.

This shift resulted in many states enacting farmland protection laws, allowing the state agricultural departments to entice farmers and ranchers with a large chunk of change in exchange for securing their land into agricultural easements, thus warding off urban and suburban development on treasured farmland.

Recently farmers have become less tempted to hand their land over to developers. Many have turned down major lucrative offers. Why? Perhaps it’s the major surge in profits earned by growing commodities (corn, for example), the high profits available to farmers by renting or leasing their farmland to new farmers, and/or the emotional connections to the land.

It’s possible that this shift is only transient (perhaps resulting from the recent spike in commodity prices). Even so, it represents a temporary and positive shift in the agricultural market.

If you are in need of funding as an alternative to selling off your land to developers, AgAmerica Lending can help with an agricultural loan or a short term Ag bridge loan so that you can take advantage of growing commodity prices.

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Bridge Loans Help a Hot Real Estate Market

The mining company Ur-Energy announced recently that it had secured a $5 million bridge loan to help it begin a new project. The concept might seem complicated to the novice, but the company will use the bridge loan to pay for the initial work on a $34 million project. Once the facility is nearing completion, the company can take out a longer-term loan and pay off the initial bridge loan.

The story serves to underline the fact that the real estate market is hot again. More and more, people and companies are using bridge loans to make quick purchases or to start work on projects with the intention of getting longer-term funding later.

Basically bridge loans are short-term loans that last anywhere from two weeks to a couple years. Interest rates may be higher than traditional lending, but documentation is low and turnaround time for AgAmerica Lending bridge loans is lightening fast.

In the Sunshine State, contractors and builders have been using Florida bridge loans for years. Once the plan is fully entitled, the developer can use a longer-term loan to pay off the bridge loan.

Businesses with multiple partners also use bridge loans when one of the equity partners wants to leave. The rest of the partners can take out a bridge loan to buy out the partner who’s leaving. Then the firm can pay off the bridge loan when a new partner buys in.

If you’re interested in learning more about bridge lending, call us here at AgAmerica Lending, where we can work together to see if it’s right for your needs.

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AgAmerica Lending Founders Predicted Real Estate Changes

Last year, Florida Trend magazine did a great profile of AgAmerica Lending founders Brian Philpot and Rob Harper. It was fun seeing coworkers highlighted so nicely in print, but more than that, it gave them credit where credit is due for predicting trends in the market.

The article, by Amy Keller, explained how Brian and Rob bought up 350,000 acres across the Southeast, mostly of timberland. In 2004, they noticed that acreage prices had skyrocketed, and they figured the market was in a bubble.

By the time the market crashed in 2007, Brian and Rob had sold off all but 13,000 acres of the land, protecting themselves against big losses.

The crisis that followed made it difficult to acquire agriculture loans, so Brian and Rob turned their attention to ag loans. They used their own experiences in land purchases to build AAmerica Lending into a company that understands its clients.

Now, the market has turned around, and investors have returned, creating a run on ag lending and timberland loans. It has been a decade since farmland has been selling as fast as it is today, and that’s increasing the need for commercial farm loans.

For those worried about stepping back into the market for ag land, AgAmerica Lending offers personalized service for each of our customers. We’ll walk you through every aspect of a hard-money loan, farm credit, or an AgAmerica low-interest loan.

Brian and Rob instilled their company with the knowledge they gained riding the real estate wave. Now let us help you stay ahead of the curve.

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Land Values Rise as Investors and Traditional Buyers Return to the Market

The newspaper in Kalamazoo had a story the other day that offered some good news. Land values in Michigan’s Allegan County had not only found the floor of the market but had seen an increase last year for the first time since 2009. The reason? An across-the-board increase in agricultural land values.

It’s a story repeated in most spots across the country, and especially here in Florida. Values on timberland, development land, or just opportunistic deals are on the rise.

Consider that the Rural Main Street Index, one the best indicators of the health of land values, has seen a positive farmland price index for 41 consecutive months. That’s an indicator tracking values in a 10-state region. Those positive numbers reflect good buying conditions in most markets.

Farmers make up a portion of the buyers, but investors are more and more seeing a value in development parcels, timberland, and farmland. The return of investors is a good sign that it’s time to buy before prices continue to rise.

At AgAmerica Lending, we have more than 80 years combined experience with everything from citrus loans to ranch financing to hard-money farm loans. We have worked on projects from $100,000 to $100 million. We have specialists on staff that can help farmers and investors find lands. We know the ins and outs because we’ve invested in hundreds of thousands of acres ourselves.

AgAmerica Lending is institutionally funded and will consider loans from $100,000 to $100 million. The specific parameters depend upon whether the type of loan sought is secured by real estate, title, or some other type of collateral.

So if you’re looking for anything from a traditional collateral-based loan to a consumer loan, we will work with you to make sure you have a structured plan that fits your goals.

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Record Prices and Low Debt Ratios Spur Increase in Farm Loans

The news in farm lending these days has been nothing but rosy. Reuters reported recently that Ag loans are up 14 percent to almost $82 billion last year. That’s remarkable considering the historic drought that struck much of the country and speaks volumes to the good times we’re seeing in agriculture.

Last year, farmers saw cash income of $133 billion, according to the Department of Agriculture. Those projections were at near-record levels thanks to high commodity prices at market and an increase in a demand for food globally – all good things for those in agriculture.

Even with all that lending last year, balance sheets remain strong. Farm debt-to-asset ratios are expected to fall 40 points this year to just 10.2 percent. This would be a record for farm credit and supports the idea that these high profit margins will continue.

For anyone who might have gotten lost with all those statistics, here’s the boiled-down version: High agriculture profits without a lot of debt mean good times for farmers.

This also means it’s a good time for farm operations to grow. Times of high profits and low debt mean farms can take on new agriculture loans to add acreage or buy equipment. At AgAmerica Lending, we employ experts at helping farmers plan for expansion. We’ll help you develop a strategy and come up with Ag loan options to succeed at your goals.

For many farms, the best option is with AgAmerica loans, a program that competes with and often beats all other farm loan rates. For others, it’s a hard-money loan based on collateral. And some may choose an equity line where you can take out money as your operation grows.

Whichever you choose, you can take comfort in knowing now is the time to grow. With record profits and low debt ratios, there has never been a better time to be in agriculture.

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Weddings, Tours, and a Winery Turn Farm Into Tourist Draw

It’s always good to see farmers who discover new ways to make an operation profitable. Oscar and Melinda Vizcarra of Becker Farms have one of those stories. According to this article, they also have a great slogan: “Get big or get out.”

How that translates for the Buffalo farmers was turning a farm that had nothing but a few cherry trees into an operation that draws millions of people a year. They did it by holding weddings on their property. They opened a winery and a brewery. And they added a you-pick-it apple vineyard.

Such additions to a farm would have been unheard of 40 years ago, and maybe even just two decades ago. Luckily people seem to have a new-found respect for farming, and that means farms have the new-found ability to be something of a tourist draw. Suddenly that unused piece of the back 40 could become a pick-your-own strawberry patch, or that old apple grove could become the path for hay rides.

If you’re wondering how a farmer could afford all those additions, that’s where AgAmerica Lending comes in to help with your ag lending needs. We specialize in all kinds of agricultural lending, from ranch financing, to timberland loans, to citrus loans.

For many farmers, our AgAmerica program is the way to go. Rates are comparable or lower than any other farm loan rates, and there’s often far less paperwork than similar commercial farm loans.

There’s also the option to refinance an existing ag loan in order to take equity out of a piece of property. This allows many farmers to fund needed repairs or to expand operations.

We also offer traditional lending options, or hard money loans, that often allow farmers to add new equipment or property. You can imagine a farmer, like that couple from Buffalo, using this type of loan to build an on-site brewery or a gazebo to hold weddings.

In that article, Oscar Vizcarra said his secret is listening to customers, sometimes walking among them without saying he owns the place. He said: “Nobody knows who the owner is. I wear my jeans. I do my homework. I’m sensitive to what people want.”

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Farmers Affected by Drought Have Finance Options

If your farm has been affected by the historic drought, you’re not alone. In fact, the USDA says 80 percent of farmland was impacted by the worst drought since the 1950s.

Luckily, the government is offering help to some farmers. The USDA Disaster and Drought Assistance program is available to farmers on the hardest-hit farms, and you can click here to see if you are in the areas where financial assistance is available.

Unfortunately, some farmers affected by the drought are outside the assistance program borders. Other farmers say the government agricultural loans are too slow or require too much paperwork. That’s where AgAmerica Lending would like to step in and offer assistance. If you’re considering a hard money loan, a farm credit loan, or a farm loan refinance, we would be happy to speak about your options.

For farmers affected by the drought who aren’t covered by the USDA assistance, the first thing to consider is a loan from our AgAmerica Lending program. These are loans with flexible payment options and rates as low or lower as any in ag lending.

For commercial farm loans, you might also consider a traditional, or “hard money,” loan. Based on collateral, these loans at AgAmerica Lending typically require far less paperwork and red tape than government farm loans or other agricultural loan programs.

At AgAmerica Lending, we don’t look at loans as a one-time deal – we want to make a client for life. And if your farm has been affected by the drought, that means helping you out of this tough time and back to prosperity.

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Here’s What Female Farmers Need to Know About Lending

There was a story in the USA Today recently that might come as a surprise to some in the world of farming. It said that the number of women farmers has increased dramatically in the past decade. This isn’t just wives or daughters of farmers but women who have decided to take on farm operations of their own.

In fact, women farmers have increased 19 percent since 2002, while the number of farmers overall grew by just 7 percent, according to the USDA. In places like Iowa, women now make up 20 percent of all farmers.

Some of these farmers took over the operation after they outlived their fathers or husbands, but more and more, women are choosing to enter farming on their own.

No matter how they enter the industry, women farmers should know what’s available to them in the form of agricultural loans that could help their operations grow.

First and foremost is the AgAmerica Conventional Real Estate Loans, which offer extremely low financing and are as competitive as anything in ag lending, including government farm loans. AgAmerica loans come with several options, including a 25-year fully amortized loan and a 10-year AgEquity Revolving Line of Credit.

Women farmers who are new to ag lending may also want to consider the Transitional Lending program from AgAmerica Lending. These loans are often called “hard money” loans and are based on collateral. These are ideal for, say, new ranch financing to buy grazing land, or as a citrus loan to buy new groves. They can also be used as a hobby farm loan for someone looking to buy a new four-wheeler for the grandkids or a new boat for the weekends.

It may also be important to women farmers who are new to ag lending to look for a banker who strives to make a personal connection with clients. Here at AgAmerica Lending, we approach every farm loan refinancing or new hard money loan or any other type of loan as a chance to develop a relationship with a client we hope to keep for life. Whether you’re a female or a male farmer, here at AgAmerica Lending, we’re going to give you that personal approach we hope will become a long-lasting relationship.

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Is Converting a Farm to Organic Worth the Costs?

There was a time not long ago when organic farming seemed like a new experiment for American farmers. Back in 1990, organic food and beverages grossed just $1 billion in sales. Twenty years later, that number has grown to nearly $27 billion. A whopping 4.8 million acres in the United States have now been dedicated to organic farming.

Farmers who have switched to organic production have seen big increases in the value of goods at market. A head-to-head comparison by the USDA found a wide difference in the cost of organic produce, from a 39 percent increase for carrots to a 200 percent markup on eggs.

Converting a farm to organic has several associated costs, including a yearly certification and increased labor expenses for weeding. Farms also must spend three years operating without chemicals before they can be certified. That can be costly considering crops sold during the switch can’t be labeled as certified organic.

Luckily, there are several agricultural loans that can help farms with an organic conversion. Low-interest AgAmerica loans fromAgAmerica Lending can provide a 25-year amortized program to help farmers pay back their conversion costs slowly, without a big hit to the wallet all at once. Or there’s the 10-year AgEquity Revolving Line of Credit, with rates as low as 2.69 percent.

Others may want to cover the costs of an organic conversion by refinancing an existing ag loan or USDA loan. By taking out equity during refinancing, a farm can cover the operational costs of an organic conversion and then benefit later from the increased profits.

What does a farmer stand to gain from organics? Carmen Fernholz, an organic research coordinator for the University of Minnesota, recently gave a presentation at the 24th annual Organic Farming Conference in Wisconsin. Fernholz is a longtime organic farmer himself. Among the costs of conversion, Fernholz said, are an initial investment of $5,000 to $10,000 for weed management that will be repaid simply in the money farmers save on fertilizer.

“It’s easier to achieve a profitable bottom line, if you do it correctly,” Fernholz said, according to an article from the LaCrosse Tribune. “You can get comparable yields, generally at more of a premium, and generally with less of a capital investment.”

If you’re thinking about converting your farm to organic, please call our loan specialists at AgAmerica Lending to talk about ways we can help you get there. You can reach us toll free at 844-516-8176.

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