The 1980s farm crisis was on the minds of speakers and attendees at the National Agricultural Bankers Conference in Omaha this week. The consensus, if there was one, appeared to be: This is not that era, but expect some tough times ahead.
“You’re in for a rollercoaster ride,” Purdue University economist Jason Henderson told ag bankers Tuesday. “It’s going to be a tough winter,” Henderson added, citing lower loan repayment rates and increased rates of loan denials in the Midwest.
Discussing the effects of tariffs, Henderson, a former vice president and Omaha branch executive at the Federal Reserve Bank of Kansas City, said “the people formulating trade policy in this nation don’t understand agriculture.” China’s theft of intellectual property is a big problem, “but the side effects in ag are real,” and China is unlikely to blink first in this trade war, said Henderson, who is associate dean in Purdue’s College of Agriculture and director of Purdue Extension.
Randy Dickhut, senior vice president of real estate operations at Farmers National Co. in Omaha, said the tariffs would have long-term negative effects on agriculture, but that the economic conditions now are vastly different than the 1980s, when farmers were highly leveraged and interest rates were much higher.
Another difference he sees with the 1980s: There are plenty of accomplished, large-scale farmers these days who are positioned to pick up land from farmers who have to go out of business.