It’s no secret: farms have gotten bigger over the last several decades. According to USDA, there were 7,000 farms over 2,000 acres in 1980. Today, that number tops 30,000.
As farms have gotten bigger, the ownership structure has changed, causing a shift from owner-operator to operator. Often, owning land is not in the trajectory for growth as farmers look at efficiency of scale. In fact, as farms get bigger the percentage of rented land grows with them.
For some, that can cause an issue when it comes to financing their operations and ultimately limit profit potential.
Traditional ag lending was designed with an older farm structure in mind. Meaning: your owned land and equipment is used as collateral. This is true of most lenders, regardless of industry. You must have hard, balance sheet assets to obtain a large sum. While this works for farmers who own their land and equipment, it leaves a gap for those who – while successful at farming – don’t fit in the box defined by the lending parameters.
Having worked in the Farm Credit system for a large portion of my career, I saw this impact growers first-hand. Scrambling to get 100% of your working capital financed can cause unnecessary delays and losses in profitability.
At FarmOp, we work to eliminate those challenges so your operating loan fits within your operation as it continues to grow. Here are some of the things we’re focused on as a partner in your efficiency:
Right-Sized Financing – Knowing you have your whole operating line financed in one place can save you time looking to make yourself “whole” and let you focus on what’s truly important: your operation’s productivity and profit potential.
Earlier Financing – Early, cash discounts are a real thing. Our loan is structured to get your operating line of credit in your hands when your decision-making starts in a crop year, not when the calendar changes.
Marketing Freedom- With our financing designed to get more money to you earlier, you don’t have to sell at harvest-level prices to fund next year’s crop. This allows you to market when you need and sell when the price falls within your marketing plan.
Interested in learning more? We’d love to hear from you. Please fill out this form and we will connect with you quickly.
Bill York
CEO, FarmOp Capital