One of the wonderful things about our Rotary meetings is the information we receive from our speakers.  Let me give another shout out to the Lloyd’s for continuing awesome presentations.  This week we heard from Jim Farrell, President and CEO of Farmers National Company.  Jim is a member of the Greater Omaha Chamber of Commerce Agriculture Committee and a member of the National Agri-Marketing Association and the Gamma Sigma Delta Honor Society of Agriculture.  Farmers National Company is a 90 year old employee owned company headquartered in Omaha with over $9.2 billion dollars of assets under management.

 

The goal of FNC is to make non-resident ownership of farmland worry free and profitable.  Jim described the current conditions in Agriculture.  From 2006-2013 there was rapid increase in income in the industry, which was referred to as a “super cycle.”  However, from 2013-2017 there has been a 54% decline in income.  The big change has been in working capital, which has depleted at a rapid rate. It went from $160 billion dollars on farmers operations down to $38 million as of last July.  Agriculture is at a record low. 

 

There are three tiers of operators currently.  Profitable operators own more land than they rent and this gives them higher income and a stronger balance sheet. The Swimmers are the farmers that own less land than they rent, may not have been aggressive in the market and ended up selling in a depressed market.  The lower tier, which is about 10-15% of borrowers from the bank, have lost money last year and are set to lose money this year.  The tariffs from 2018 on soybeans to China impacted what looked like a pretty good market.  The farmers that sold all of their 2017 crop and some of the 2018 crop did well.  Those farmers that held on to their crops hoping the tariff situation would resolve didn’t fare as well.  This points out how government policy has a direct impact on Agriculture.

 

Rough spots in the road for Agriculture include the new NAFTA, which will more likely drag on for a while.  He anticipates they will lose a portion of the market with the trade war.  Lack of storage facilities of grain that is not being sold adds more issues. The Asian Swine Fever is also creating a major problem and has wiped out 30% of their hog produce in China.  This interrupts the shipping of soybeans normally needed by China.  The farm bill was signed and there are tariff relief payments to buoy operations. NATFA agreement delay and flooding are contributing to financial issues that Jim thinks will escalate.  We appreciate this look inside the current conditions of agriculture. Code: Agronomy

 

 

We look forward to his involvement in the club!
 

 

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