Smart Financial Planning Key In This Farm Economy

Smart financial planning has never been more important for growers trying to navigate today’s shifting markets.  Commodity prices are down, liquidity is getting tighter, and with shifting bank practices, growers are weighing their borrowing options and profitability more carefully than ever.  Shane Prim, senior commercial lending manager with WE Ag Finance from Wilbur-Ellis, expects to see challenges for crop growers in 2026.

“One of the challenging things that they're facing right now is interest rates," Prim pointed out.  "Interest rates are being eased slightly by the Fed, but as long as commodity prices, if they stay low in 2026, the credit market is likely to remain tight. So, it's even more important for growers to strategically look at their scenario and evaluate their financing needs. It's important to keep three fundamentals in mind when considering loan options. The factors are competitive pricing, flexibility, and simplicity. These are things that really differentiate financing options and help growers to put themselves in the best position to further their business and maximize their return. It's really going to take pulling different levers on financing capabilities to make it work. For some, that may mean blending bank loans with input financing to cover their operational needs.”

Improve Your Situation By Comparing

The pillars of competitive pricing, repayment flexibility, and simplicity include starting with pricing. So, where should a grower begin?

”The best way to shore up the bottom line really is to look at their expenses," Prim said.  "Interest is one of those expenses that they can have somewhat of a control over, based on the different financing options that they take advantage of to finance their crop for that year. So, comparing rates between banks and supplier financing programs could really open up new avenues for growers. Every grower’s operation is different. Every person's financials are different, so they really have to take a look at their own situation and decide what's best for them. It's as simple as doing the math to decide on which lender or financing programs are going to help them minimize their interest costs and maximize their bottom line.”

Make Sure You Match Your Needs To Your Crops

He said flexibility in repayment timing is very important, given the seasonality of agriculture.

“It's important that a grower aligns the repayment schedule with their expected cash flow," Prim pointed out.  "What do I mean by that? Like I said, every operation is a little different. Their cropping mix may be different. The way they get their money may be different. Sometimes a grower will decide to hold their crops for better income, and if it's one of those crops that they can shelf for a while, they may do that to try to maximize their return. So, when growers are looking at financing, they really need to look at how the maturity dates line up with how they receive their money. Let's take WE Ag Finance. For example, we have multiple maturity dates starting with December of 2026 all the way through March of 2027. These options help a grower match their income stream with the maturity dates to give them the best potential situation to be able to pay their loan back with how they receive their money.”

Compare Your Options And Do Some Math

Prim said simplicity is also important and offered advice for growers who are considering financing for 2026.

“At the end of the day, growers want to be out there growing their crops and maximizing their value," he said.  "The last thing they want to deal with is a complicated loan setup.  For WE Ag Finance, simplicity means lending programs designed around one single loan and one single maturity date.  Compare your options and do the math.  Look at your input costs, look at your interest costs, and understand what it's really going to take to run your business and maximize your bottom line. When you do that, and you weigh all those options, then you make the best decision for you, and you run with it and get ready for the next season.”

Find The Financing That's Right For You, Your Operation

Prim added producers can learn more about the competitive, flexible, and simple financing options by contacting their local Wilbur-Ellis representative or visiting WE Ag Finance's Website.

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com