Beef producers know all about the best-laid plans. Because it seems if it’s not Mother Nature wreaking havoc, market volatility steps in. This spring, COVID-19 has been the culprit. With uncertainty in the markets, many have elected to delay selling. But what happens if their loan payment is due soon?
Ken Leiber, a Texas and Southwestern Cattle Raisers Association director and president of National Finance Credit Corporation of Texas, said communication is key — and the last thing lenders want is to be surprised.
“You can lay out your plan, but in the cattle business, you still have to react and adjust along the way,” Leiber said. “It’s your business to manage as the producer, but when you change your mind and your plans, it’s time to talk to your lender. Tell him what you’re thinking and why you’re thinking that.”
Plan of action
He said whether a rancher is considering a new marketing plan or has decided to retain ownership at the feedyard, the lender wants to know.
“Let’s say you’ve got cattle on wheat pasture right now and you know it will run out next month and you don’t want those cattle to go backward,” Leiber said. “The clock is ticking so you want to communicate, ‘Here are my options and here’s what I think I’m going to do.’”
Talk to your lender
He also encourages producers to bounce ideas off their lender.
“You might want to approach it like, ‘This is what I'm thinking. Shoot holes in it,’” Leiber said.
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