Lending to farmers has always been a difficult proposition. After all, banking and finance are all about managing risk, and agriculture is uniquely resistant to that effort. Today, our current ag finance tools are being tested in new ways, but even as new strategies and technologies emerge, the old question remains: how much risk can farm business — and their lenders — afford?
To answer that question, hosts Sarah Mock and Trey Malone dig into the past and future of agricultural lending with experts Mike Boehlje and Mike Gunderson. Along the way, they unpack a practical framework, the partial budget, that farmers can use to weigh the opportunity cost of a financial decision.
You’ll walk away with a better understanding of:
- Why farm lenders have to contend with systemic risk than almost any other industry, and how that risk shaped the creation of institutions like the Farm Credit System.
- How to use a partial budget to evaluate opportunity cost — turning a big financial decision, like whether to repair or replace a piece of equipment, into a clear comparison of added costs and returns.
- What a “K-shaped recovery” in the farm economy reveals about who’s positioned to weather the next (or current?) downturn.
Agribusiness Blueprint is brought to you by Purdue Center for Food and Agricultural Business: agribusiness.purdue.edu. To learn more, follow The Center for Food and Agribusiness on LinkedIn.
Agribusiness Blueprint is supported in part by the USDA National Institute of Food and Agriculture (NIFA), Award No. 2022-68006-36433.pported in part by the USDA National Institute of Food and Agriculture (NIFA), Award No. 2022-68006-36433.
