As growers consider their production plans for 2018, credit and financing options will play a big role in those operating plans. Doug Cox, with Farm Credit Mid-America, says there are steps that growers can take to optimize their credit and make a plan for 2018 that fits the needs of their operations. One thing Cox recommends is paying down your line or credit as quickly as possible, “An operating line is intended to be short term. Paying down or paying off those operating lines as soon as possible will not only lesson the amount of interest they have to pay, but will improve their credit picture by getting debt off their books.”
Cox recommends that operating credit plans need to be customized to fit a producer’s operations, “For example, if you don’t sell your product until November, then your note should not be due in October.” He added that these loans are not one size fits all but can and should be set up to best fit a particular operation.
Cox also urged growers to not be afraid of operating lines of credit, “In more profitable times, some farmers prided themselves on not needing these tools. But in these more challenging economic times, they may need to consider doing things differently.” He added always talk with your lender to identify credit options that are the best fit for your operation.
Farm Credit Mid-America has on-line resources to help in this area. You can find them at e-farmcredit.com.