Community bankers know the challenges presented by struggling farming operations. Look to Ag Resource Management (ARM) as a partner for creating strategies that manage risk for you and your farmer customers.

A troubled loan puts a bank in a precarious position: It must either refuse a request for additional funding or extend more capital into a loan that’s already troubled. Neither scenario holds much appeal.

ARM can help banks address efficiency and performance by managing some of the risk in their ag-loan portfolio. ARM can offer alternative financing that allows farmers to plant their crops, move forward with the season and continue generating income — and the bank won’t have to advance further capital.

Banks have historically made operating loans based on real estate assets, but many farmers now own only a small piece of land and lease most of their acres. Because ARM relies on this season’s crop for collateral, ARM can take on the operating loan while banks continue to manage equipment and real estate term debt.

“Sometimes bankers need somebody to stand with them in order to provide the farmer an operating loan to farm that year — that’s where ARM comes in.” -Gerald Kruger, Area Manager for Sioux Falls, SD


Partnering with ARM offers community banks many benefits:

    • Improve the balance sheet and financial performance.
    • Maintain relationships using a sustainable plan and without increasing commitment in a regulatory environment that may advise exiting the relationship.
    • Continue existing relationships in a tough landscape for finding new customers.
    • Reduce reputational risk. Offering a path forward shows that a bank wants to offer value to and help its farmers, thereby avoiding the appearance of marginalizing its farming client base.

ARM assistance creates a path forward for a troubled farming operation. Often, these clients just need to get through a rough spot. ARM can bridge the gap and give the farmer time, while helping the bank preserve the long-term relationship with that customer.

If the path forward for a farming operation is bleak, then ARM’s involvement for a year can offer everyone time to plan an orderly liquidation. The farmer and the bank usually come out better given the extra time. 

ARM’s Equity Solution

Ag Resource Management (ARM) offers a solution to farmers with limited equity. ARM doesn’t look at equity like a traditional bank does, because ARM uses this season’s growing crop, crop insurance and program payments as collateral.

If a bank determines they can’t renew a farmer’s loan, the farmer can work with ARM to finance the entire loan or just a portion. Usually the bank will handle traditional term lending, and ARM will create a plan for the farm’s operating loan. ARM can step in when there isn’t enough equity for a traditional banker to approve a loan and provide the needed liquidity for a farmer, based on the projected crop. This partnership allows the farmer to continue farming.

ARM also consults with the farmer to help identify where issues may exist on the farm. The process of sitting down together and outlining a budget helps determine exactly where the money is going and where the farm can tighten its budget to get the most ROI out of the loan. For example, family living expenses may still be on the high end compared to where commodity prices currently sit. When expenses are detailed, it’s often easy to find areas to trim back.

Rent is another example of a line item that can often be reduced. It’s not an easy discussion, but once an analysis is complete on a field-by-field basis and the expenses are broken down, it’s fairly easy to see where rent is too high to create a profitable scenario. A farm’s highest producing fields aren’t necessarily the most profitable. Often, the highest producing fields are also the ones with the highest rent. When farming a particular field is not profitable, a farmer must decide to either renegotiate the rent or give up the land. Giving up hard-won land contracts can be very difficult for a farmer, but sometimes it’s the best choice for the long term.

ARM also creates a cashflow analysis, which includes the crop budget. Looking at input costs and actual production history (APH), ARM works with the farmer to determine where to spend the loan dollars for the best possible return — sometimes optimizing profit means accepting a smaller yield and benefitting from reduced seed and input costs.

Lastly, ARM takes a holistic approach, looking beyond just that season’s crop to help address issues that affect the entire operation. This perspective helps farmers focus their resources throughout the year, allowing them to operate much more efficiently and reach their long-term goals.

Contact your nearest ARM location to get started.


Every farm situation is different, and many financial challenges arise through no fault of the farmer. Listening to a farmer’s pressure points allows ARM to adapt and fit that farmer’s situation. Next, attention shifts to the farm’s balance sheet and cashflow. ARM needs to understand the leverage position on the balance sheet to attract alternative financing solutions. Then it becomes possible to secure a line of credit for the season.

After identifying a financing solution, ARM sets up a systematic process to help manage risk. For example, ARM helps the farmer acquire the proper amount of crop insurance, spend capital on the inputs required to realize the highest potential yield and pay the loan when the crop is harvested. This in-depth involvement in the operation increases the chance of success.

ARM also serves as an advisor to help farmers right-size their balance sheets. This might include recommending the sale of a parcel of land or a piece of equipment. These changes can put the farmer in a better position to secure financing through the bank in the following year.

“We’re not trying to compete with community banks. We can partner with the bank to help them continue working with a farm client when the financial situation or regulatory pressures might make that difficult.” -Jason Brown, ARM market leader

Partnering with Farmers

ARM wants to partner with the farmer, the bank, distributors and other input suppliers because the best approach gets everyone working together in the best interest of the farmer. Along with the loan, ARM offers farmers budget and risk-management advice. Having a deep understanding of crop insurance, they can guide a farmer through those discussions and decisions, as well.

The farmer receives a monthly loan statement, and at the end of the loan, ARM collects harvest information and conducts a reconciliation, showing the end results of the season. This can sometimes lead to finding a revenue insurance claim because of a shortfall. Or it might result in finding another area of budget leakage that can be corrected for the next year. Reconciliation helps the farmer develop a strong understanding of and confidence about where the dollars were spent and how that affected total production and return on investment.

ARM provides the support you need to get the most out of your farm. Struggling operations as well as those simply looking to tighten up their business practices can benefit from the ARM crop-as-collateral lending model and the guidance its experienced staff can provide. ARM does ag finance differently. Is it time your farm did, too?


After seeing years of tightening margins, declining commodity prices and eroding equity,  Ag Resource Management (ARM) developed the Ag Input Loan to help bring equity back to farmers who need it through a partnership with ag retailers and ag input distributors. Retailers have long-standing relationships with their customers, but they may be concerned about the credit quality or their cashflow and aren’t able to carry the farmer’s unsecured trade credit for the season. ARM can partner with the distributor, then take the distributor’s input sales and convert that to a secured loan transaction. This makes it part of an overall budget that ARM manages and monitors throughout the growing season.

 “Ag Resource Management pioneered the concept of monetizing crop revenue streams. By combining the math and science of determining both yield and price market values and their relative insurance values, ARM can reliably predict a farm’s potential revenue stream.” -Leroy Startz, Director of Market Channel Development at Ag Resource Management

The retailer can then secure the sale of inputs to the long-term farmer-client and wait until the crop is sold for payment. They benefit from not having to carry accounts receivable on an unsecured trade credit status. They’ve now become part of a secured loan transaction because of their partnership with ARM.

As a forward-looking capital provider, ARM does not rely on land or equipment equity to make a loan decision. Rather, the loan decision is based on the farm’s capacity to generate an income stream from a growing crop. To do that, ARM uses a proprietary financial model to apply appropriate discounts, which generates a risk-adjusted crop loan that syncs with the farm’s budget. In the event of a crop failure, the revenue stream is protected with a well-structured crop insurance policy that maximizes farm revenue.

Once established, ARM sets up a systematic process to help manage risk on the loan by maintaining a close working relationship with the farmer. For example, ARM helps the farmer acquire the proper amount of insurance, spend capital on the inputs required to realize the highest potential yield and pay the loan when the crop is harvested. This in-depth involvement in the operation increases the chance of success.

Offering the Ag Input Loan benefits the retailer in two ways: He maintains his long-term relationship with that farmer, and he can offer a credit product that allows him to compete with other ag retailers who are trying to sell to the same farmer. However, the retailer has the advantage of shared risk with ARM, working under a well-documented credit structure.

ARM may also be able to help farmers who have filed bankruptcy.  ARM does this under special provisions and protection provided by the bankruptcy court.

To learn more, contact your nearest Area Manager or visit us at


A persistent credit crunch has entangled the American agricultural community, despite the opening of more markets than ever before. That probably isn’t front-page news. For participants in agriculture, the real news lies in practical paths for navigating the economic challenges faced by growers and the businesses that supply them.


A little more than 15 years ago, news of world population growth and a rapidly growing Chinese middle class wanting to increase the quality of their diet put a focus on U.S. agriculture’s responsibility and opportunity to help feed the world. An invigorated industry push began to improve genetics to increase yields. Additionally, the Renewable Fuels Act started consuming corn which increased demand, and commodity prices and margins soared.

But the upturn didn’t last long. Commodity prices and margins began to tighten. Then, consolidation of farms, manufacturers and suppliers began to shrink the number of players in the agriculture industry. This sequence of industry events caused available credit to drain out of the market.


As the ag retail industry began to consolidate, larger companies purchased many of the smaller family-owned businesses. Many of these smaller retailers had established stable customer bases in their communities where they felt comfortable extending credit. Once those businesses became extensions of major national distributors, that capital began disappearing. They had to follow new policies that determined credit limits, and credit was pulled away from the market.

Over the past five to seven years, there’s been no improvement in commodity prices. Some financial institutions still extend credit to farmers and rely on equipment and land equity as collateral. However, much of that equity has been used up. Thus, a real credit crunch exists in the marketplace for farmers who must make arrangements for seasonal capital to cover their annual crop production costs. It’s given rise to alternative financing and paved a new way to bring capital to production agriculture. 


ARM is developing a Partner Portal that will allow retailers and distributors to monitor ARM accounts in real-time through an online dashboard. Retailers will be able to view every farmer loan they participate in and create monthly loan reports. ARM also offers a Master Program Agreement to its retail and distributor partners. The agreement serves as a roadmap on how ARM and its partners do business together throughout the season, detailing the responsibilities and obligations of both parties. If the season requires additional sales and seasonal credit to the producer, it provides a process to communicate with one another about those needs.  This communication ensures that changes sync up with a revised and jointly approved crop budget.


Another loan tool available from ARM is the All-In loan, which it sells directly to the producer. ARM can provide the working capital a producer needs to produce a crop, make land and equipment payments and cover day-to-day operation and living expenses. ARM provides an option so distributors and retailers can take care of their customers, whether they purchase their inputs from them that year or not.

To learn more, contact your nearest Area Manager or check us out at ARMLEND.COM

Even in 2020, there are many farming operations that simply don’t have the bandwidth to have dedicated individuals in place to manage tasks such as marketing, accounting, or risk management. What’s more, razor thin margins due to softened commodity prices and depleted equity have placed even greater emphasis on these categories.

Enter, COVID19. The economic destruction this pandemic has caused has rippled across multiple key industries, the crash of crude oil demand being the most notable. For agriculture, if fuel demand is low, then so is the demand for blends of ethanol and biodiesel. The sector of our food chain to be most mortifyingly hard hit is for our livestock producers, which has forced the mass euthanizing of animals ready for harvest with no processing plants to take them to. Aside from the fact that between the collapse of biofuel and meat demand, there’s also considerably less demand for the grains needed to produce them. So where will this put us in the coming months? If you’re concerned with your financial and risk projections for the current growing season and beyond, keep these tips in mind:

  • Make sure that your crop insurance policy levels, APH, and acres are accurate
  • Make sure that you are correctly signed up with the FSA
  • Understand where your floor of insurance coverage is and the resulting cash flow
  • Stress test cash flow with $2.75 – $2.30 corn and $8.60 – $7.60 soybeans given the above
  • Understand that FSA payments will likely be a necessary part of cash flow
  • Prepare to take marketing risk off the table should a summer volatility opportunity arise
  • Make sure you are applying for all possible government assistance payments. Seek help if you are not sure.

The 2020 planting season has gotten off to an exceptional start for most of the United States, but with erratic economic behaviors in play, that could lead projections to be really good or really bad. At ARM, we’re always looking forward. Although the COVID19 pandemic has thrown a wrench in food supply chains, current production is charging forward with full speed ahead. It’s safe to say that in other regards, this year has shaped up to be just as interesting as its predecessor, which underscores the need for farmers to focus on the coming months just as much as the present. Here are seven factors to keep in mind during and after planting season wraps up.

  1. Prevented Planting: If prevented planting exists or potentially exists, stay in frequent contact with your crop insurance agent. Specific discussions as planting progresses can help you maximize benefits. Items such as but not limited to the following are relevant:
    • Eligible Acres by crop and county, total eligible acres by county
    • Guarantees per acre
    • First and second crop planting opportunities
    • Plant dates, late planting periods and restrictions about following first crop with a potential second crop
    • Yield impacts for the following year
    • Farm program impacts
  1. Planting Progress and Record Keeping: Having a well-defined and written plan of your field operations is important as well as contingency plans to keep your team aligned as the season progresses. Keeping up with hybrids, plant dates, acres planted by day. Recording these so they can be shared with multiple parties as planting progresses and is completed (FSA, Crop Insurance Agent, Consultant, etc.) Has your agent provided you with a tool to do this?
  2. Safety: As the old saying goes, “Safety is no accident.” It’s something that always seems so second nature to most, however being aware of your surroundings can be the difference between a smooth day in the field and a trip to the emergency room.
  3. Maintenance: What’s the schedule? Who is performing daily checks? What’s the getting started and shutting down process?
  4. Field to Field: What is the process? Who is helping? What precautions can be taken to ensure safe movement of equipment?
  5. Taking Care of The Team: Who is providing field support and making sure that people get adequate rest, nourishment and employees are cared for during the busy time?  Is there someone there to hold the boss accountable to say, ”Enough is enough, time for a break?”
  6. Next Steps: Are you thinking about the next step as soon as the planter is parked?  Does post-season maintenance wait until the risk of replant has passed? What is the next field operation and are we prepared for it?
Brad Terral, Executive Chairman & Founder


The data movement in agriculture continues to gain momentum. As enthusiasm grows, tech companies churn out more and more data with greater relevance to producers. The question becomes: Are you prepared to interpret this flood of information and put it to use in day-to-day decisions about production and risk-management?

In order to adopt field-level information, it must be served up in a way that an average farmer trying to manage day-to-day operations can digest and use to make decisions. Essentially, farmers can benefit from a partner who sorts through this information and puts it into context, and that’s exactly what Ag Resource Management (ARM) does. ARM uses it to measure and manage income and risk. We provide alternative capital to farmers while staying close to the collateral — which is this season’s crop — and providing real-time measurement.

Capital markets need a company to use technology to measure the crop in a predictable way. ARM’s technology fills that gap. By synthesizing something out of the vast quantities of field data that capital markets can digest and fund, ARM’s clients reap the benefit of capital support they could not otherwise access. ARM has become the translator of field-level information which not only keeps farmers farming but allows them to grow their businesses.

An ag loan is just like the crop it represents — it’s alive. Every single day it changes, so managing that capital as part of a portfolio of changing loans is not a simple proposition. ARM relies strictly on the value of the crop, crop insurance and programs around it, so we must be razor-sharp on the valuation of the crop, tracking the minutest change as the crop matures. It’s not hard; it simply takes a methodology and system to track that level of detail.

Synthesis is ARM’s proprietary data software that integrates a farmer’s contextualized data with financial capital and information. It speeds up the loan process by monetizing not only the insured value but also the value of the growing crop measured above crop insurance. Simply put, it quickly calculates what something is worth in the future. For a growing crop, however, it’s not only about the math. It also involves the progress of the crop.

Synthesis calculates pricing and yield information, budget changes and insurance changes, to name a few factors in the complex data analysis. It calculates in real-time and expresses results as income and risk so decisions can be made quickly.

The groundbreaking nature of Synthesis lies in its control architecture as well as its ability to serve the farmer with income and risk information in a financial context. This information can help producers identify weak spots in their operation, improve efficiency and ultimately solve problems.

Doing what you’ve done before — particularly if it has worked — can become a tempting trap. It’s vital to your business, however, to constantly explore ways to reduce risk and improve profitability. Taking a fresh look at crop-insurance coverage offers one way to do both.

The key steps to purchasing crop insurance start with updating each field’s actual production history (APH) to determine how much insurance coverage is needed. Next, it’s time to sit down with the lender and have a frank discussion about your current coverage and risk exposure. Then field-by-field, outline planting intentions and establish how that pairs with your capital needs for the next year.


Step 1: Update APH

A grower should begin each year by updating their APH. This includes gathering harvest records from the prior year and meeting with the insurance agent to add the farmer’s production data and 2019 yields to the continuous record for each unit. This determines what the APH is on each section and per commodity grown. The agent processes that information and provides a calculated yield, accounting for any prevented planting acres and ensuring those are updated properly.

“This process tells us the updated and computed APH yields for the next year, and it all starts with good on-farm record keeping, which is critical to calculating and supporting your APH in the event there is ever a review,” says Billy Moore, chief operations officer at Ag Resource Management (ARM).

Examples of records needed:

  • Bin measurements
  • Sales tickets on sold production
  • Amount of stored grain fed to livestock


Step 2: Talk with Agent about Insurance Options

Now, it’s time to look at the various crop-insurance coverage options available. Many options merit your consideration. Take the time required to find the right overall plan for your operation.

“To start, look at projected prices by reaching out to commodity futures contracts to see current year rates and then begin to look at coverage policies offered in the area,” says Moore. “Revenue protection is standard coverage for most row crop producers, and then step outside of that and consider if any additional coverage is needed to cover expenses and capital needs.”

Private insurance products offer additional protection against specific perils that may affect a particular field or to cover a gap between what federal crop insurance protects and actual cost of production or capital needs.  There are many private products on the market that offer an “over the top band of coverage” that can help the grower feel comfortable that they are covering the full exposure and leaving zero gaps.  Growers should also consider other risks that lie outside of the production of the crop, transportation are two that come to mind and those can easily be protected by a crop hail policy.  It is important to think about all exposures that exist, have open and detailed conversations with your agent and ask a lot of questions.  Don’t just assume that if it right for your neighbor it is right for your operation.

For example, if a farmer has a 200-bushels-per-acre APH and chose to take out coverage at an 80-percent level, that provides a 160-bushels-per-acre coverage guarantee. At $4 per bushel, the farmer would have $640 of coverage per acre. If, given expenses, the farmer’s capital need is $700 per acre, it may be appropriate to consider coverage options from the private market to cover the gap.

“Farmers need to determine how much risk they want to take on. And it might be worth it to pay a little more to ensure all their production costs are covered,” he notes. “Every farmer takes on risk when they put a crop in the ground. However, they still have a return on investment to try to achieve and protect.”

Proper insurance coverage provides farmers with maximum flexibility for managing their revenue potential throughout the crop year.

“It really allows farmers to market their crop with confidence,” says Moore. “If a pricing opportunity comes along in late spring and you want to price some crop at that time, it would allow you to do so knowing that you’re covered. Benefiting from opportunities that present themselves helps farmers manage risk and improve profitability.”

After more than five years of a stagnant ag economy, the industry is ready for the cycle to turn upward again. The recent signing of the USMCA trade agreement and phase one re-engagement of trade with China could give the agricultural market the boost it’s been looking for. “Both trade deals provide an opportunity for commodities to see prices begin to move higher,” says Leroy Startz, director of market channel development at Ag Resource Management (ARM).

A rebound in commodity prices is good news for all ag interests, but the potential effects of these deals become magnified for farmers partnered with ARM for crop financing. ARM’s model is based on a forward-looking revenue stream. “If prices go up, it means a higher projected revenue,” says Startz, “which translates into more loan dollars to produce the crop.” For a farmer who had to cut back on fertilizer or pass on soil improvements because of a tight budget, this flexibility can become significant. Rising prices allow ARM to review its revenue projection for the crop and extend more operating credit to the farmer, which can finance the additional crop support needed to maximize yield potential.


Ag Rebounds: What is it and what does it look like…

Some say a rising tide lifts all boats.  That is particularly true in agriculture.  During down cycles, farmers will delay purchases of equipment & machinery and postpone applications of soil nutrients in an effort to preserve cash to keep farming until the next up cycle.  Likewise, during the up cycle periods, the farmer will replace old equipment and make new purchases along with crop input purchases to replinish soil nutrients.  These purchases represent pent up demand and are made by farmers when cash flow permits.

A look at several companies returns finds the same period of boom and retrenchment. Let’s define the boom to bust years’ and lay this over financial data for several leading Ag companies. In this study we looked at John Deere, ADM, and Nutrien. For the farmer who has mined equity, depreciation, nutrients, and investment in the intervening down cycle, a boom creates a new cash infusion with a tax liability, which often encourages reinvestment into the farm operation. The result is intense returns to Ag companies coming out of a down cycle, especially when compared to the S&P during the same rebound time period.


Has Equity Left the Room?

Given the last five to seven years of flat-to-declining commodity prices, farmers have faced a break-even living at best. “They’ve had to chew up their liquidity to remain farming,” says Startz. The results show up in their balance sheets as declining equity. After depleting cash reserves, farmers often tap the equity in land and equipment to bridge the gap between harvest revenue and paying off their operating line from the prior year. That loss carries forward into the new year, along with the hope that prices will rebound and get them to break-even.

“Farmers now go to their banks with deteriorated balance sheets and cash flows that make the banker uneasy,” he explains. “Increasingly, farmers are no longer eligible to borrow at that bank, and they’re looking for alternative financing solutions. That’s where ARM can help.”

ARM doesn’t look at balance-sheet equity and doesn’t need to take mortgages on land or liens on equipment. Using the forward-value of the crop being planted puts ARM in a unique position to provide farmers with a crop-financing solution that isn’t available from traditional lenders.

“ARM makes it easy and simple for the producer: Bring us your APH, and we’ll find the right crop insurance policy and build a budget that maximizes the revenue stream from the acres you want to plant,” says Startz.


Pushing Out of the Ag Recession?

There’s strong sentiment that the recent trade deals could start to push agriculture out of its recession, but a one-year price rebound is not going to fix years of balance-sheet deterioration. Agriculture is going to be in a healing process for an extended period.

“It’s going to be a slow slog to get back to where we want to be,” he says. “As prices improve, we can get more operating dollars in the farmers’ pockets, which can help accelerate recovery.”

Work is also underway to bring better trade opportunities to the US with the UK and Europe. But the current breakthroughs will offer market confidence, and we should begin seeing pricing improvement, notes Startz.

“Over time, that will help farmers rebuild their balance sheets. While healing takes place, ARM is a solid partner that can help maximize farmer’s operating capital,” he says. “Let’s put a budget together that works for you, and let’s start farming together.”