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October 2, 2015
Know your business, have a plan
By LACEY JARRELL
For the Capital Press
PENDLETON GRAIN GROWERS, INC.
85 Years of Service and Still Offering Competitive Prices
to Washington and Oregon Residents.
Lacey Jarrell/For the Capital Press
Mitch Stokes, manager of Northwest Farm Credit Services in
Klamath Falls, Ore., says the best time to secure an operating
loan is at the end of the production cycle, when farmers have a
good picture of their year.
that’s on it is yours and that
you’re making any debt pay-
ments that you have currently on
time, every time,” he said.
Stokes also advises prospec-
tive buyers to have a reserve
fund, whether it’s savings for
a down payment or for a rainy
day. He said real estate pay-
ments can be as low as 5 percent
of the selling price, but having
as much cash on hand as possi-
ble can make the buying experi-
Prospective home or land
buyers should also do their best
to limit other debt, he added.
Boyle said farmers who bor-
row money for seasonal lines
of credit have also enjoyed re-
cord-low interest rates, but that
is also expected to change in the
next year or so.
“Everything I’m picking
up suggests the Fed will begin
to bump those short-term rates
sometime before the end of this
year,” Boyle said.
The best time to secure oper-
ating loans is in fall, at the end
of the production cycle, because
farmers typically know what
goods they have and what they
are worth, according to Stokes.
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Long-term interest rates
are still at historic lows but
experts anticipate they’ll be-
gin creeping up in the coming
According to Mitch Stokes,
manager of Northwest Farm
Credit Services in Klamath
Falls, Ore., the agriculture econ-
omy generally moves count-
er-cyclical to the overall econo-
my: When the economy is doing
well, agriculture suffers a bit. He
said if the economy continues
gaining momentum, it could
have a counter-cyclical effect on
agriculture and lower commod-
Stokes said if the value of
what is produced is less than
previous years, the ability to se-
cure financing could be impact-
ed, because commodities are a
component of working capital.
He explained that long-term low
commodity prices could affect
purchasers’ repayment capacity
because there isn’t as much val-
ue in goods.
It’s not all bad news, though.
“We’re looking at rates today
that we might not see again. It’s
a great time to get a loan,” said
Bob Boyle, regional vice presi-
dent for Northwest Farm Credit
Services in Salem, Ore.
Stokes said before attempt-
ing to secure financing, farmers
and ranchers should have a fun-
damental understanding of their
business and a solid business
plan that positions them to be
“When we’re working with
farmers and ranchers seeking
credit, our hope is that they’ve
taken the time to really look at
their finances — with a vision
looking ahead over the next
three to five years,” Boyle said.
According to Stokes, a pri-
mary concern for loan officers
working with prospective buy-
ers is that they haven’t handled
what credit they do have respon-
“The advice I give first-time
buyers is to make sure your per-
sonal consumer credit report is
clean and tidy. That everything
THE TRACTOR STORE
5450 W. 11 th , Eugene, OR
PENDLETON GRAIN GROWERS, INC.