So much about agriculture depends upon timing. And if you’re looking to get an operating loan, getting hung up for weeks, or even months, waiting for an answer can mean losing a lot of opportunities.
“Farmers need loans for a lot of reasons,” says Chad Hunter, area manager with Ag Resource Management. “For example, to fund rent, purchase seed or chemicals, fund labor, pay annual obligations such as taxes, you name it. The faster a farmer can get their operating loan in place, the faster they can go ahead and have the peace of mind of knowing they have the funds available to take care of those obligations.”
Having your operating loan quickly in place means opportunity for a grower. That might mean the chance to get an early order deal on inputs like fertilizer or crop protection chemicals, or seed. It might mean the opportunity to rent more land. It can also mean having the money ready when the planting conditions are right, instead of being hamstrung, waiting for loan approval.
“We talk about it in terms of opportunity cost,” explains Hunter. “Let’s say a grower wanted to plant corn, but his lender told him no, after a certain point in May. After a certain point in May, you lose your ability to protect that crop with crop insurance. So, this farmer is forced to plant soybeans instead. In this instance, the opportunity in corn was $150 potential profitability an acre, where in soybeans, that opportunity was only $50 per acre. So, his opportunity cost was $100 per acre. When you multiply that across 1,000 acres, that’s a lot of missed opportunity because he couldn’t get the financing he needed in time.”
Delays at planting time can result in genuine economic loss. According to data released by Pioneer during the 2021 Commodity Classic, growers can lose between .25 and .40 bushels per day in corn yield if planting is delayed after mid-to-late April. A 10-day delay from April 20th to May 1 could result in $24 to $40 of lost yield per acre.1
“Every day you lose after your optimum planting date, depending upon the maturity of your hybrid, you’re losing yield,” says Hunter. “With so many other pressures on a grower running up to planting time, being delayed in getting an operating loan shouldn’t be one of them. I had a grower who wanted to plant 1,000 acres who came to me, saying the lender was taking too long, and could I take a look at his situation. Three days later, I had an approval for him, and two days later, we funded that loan. So, he had the ability to go out and get his seed, his crop protection chemicals, make his planting plan and get that corn in the ground.”
That’s a prime example of one of the key benefits of working with Ag Resource Management (ARM)—speed.
“We’ve figured out how to leverage the crop and crop insurance, to maximize cash flow and risk management to provide a more streamlined underwriting and closing process, as well as a more efficient plan for the grower to use throughout the year,” says Hunter. “Our speed, our strategies and our solutions that come from our underwriting platform are bar none, the best in the industry. A farmer is never waiting on ARM to get it done.”
So why wait? To find out more about Ag Resource Management and locate an ARM representative near you, visit www.armlend.com.
1 “Busting Two Myths Can Make Corn Farmers $120 Per Acre,” Gil Gullickson, Successful Farming, (March 2, 2021)