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n. Illinois | This is how it happens. Yes the farmer made his land payment and maybe even the equipment payments on time. But he forgot to payback the operating loan which is cross collateralized with the land and farm equipment and every other asset the banker could think of. The banker dude finally wakes up and realizes he is owed $1 million and the farmer only has $100,000 worth of grain left to sell and hasn't even started paying for next years inputs yet, and they also find out that the farmer also owes his input supplies another $400,000 from last years inputs and he had been misleading the banker for the last several years about how much was owed to the suppliers. The farming operator is illiquid and has been robbing Peter to pay Paul for several years to get this upside down.
This story is repeat over and over again every year in every county this is nothing new. If the banker had been doing his job he would had realized it 3 years ago but now its too late and the greater fool theory will not bail him out.
This is also why you should never give one lending institution all of your business. You need to split your credit needs up amongst lenders, let the operating lender take the equipment and crops, livestock etc. but never the real estate. Let the real estate lender take the dirt but never any operating assets (crops, livestock equipment)
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Future of grain prices
