Cotton in the 50s; corn for $3 a bushel; soybeans at $8. Costs still rising. Mid-South farmers haven’t faced profit margins like these since the 1980s. But this isn’t the 1980s — yet, according to Greg Cole, president and CEO of AgHeritage Farm Credit Services.

“Even with this situation we’ve been fighting the last six years with net farm income down and now the COVID-19 pandemic, I still don’t see us in the same situation as the 1980s,” said Cole. “But I haven’t seen the stress like this since the 1980s.

“I don’t think land values are going to correct by 50 percent or interest rates go to 20 percent, but we are in a very stressful situation there,” said Cole, who was the lead-off speaker for the Mid-South Agricultural and Environmental Law Conference. The event is normally held in Memphis, Tenn., but was held online June 4-5.

The trump card, he said, is the farm program, “and a safety net that is working in the Mid-South so far,” he noted. “That’s been the life saver for us, but if we continue to have stress, it won’t save all producers. If we continue to have that and some bad luck, there will be some exits at some point.”

The current market fundamentals continue to be bearish. “There are no positive game-changers in supply and demand in the near term. We need positive game-changing events. The only positive has been government intervention to be able to offset the negative in terms of profitability.”

Cole said he is often asked who are the producers and ag lenders that will make it through the current recession and come out whole on the other side?

“The answers is the same for both,” he said. “Both a lender and a producer in any business make money by taking a risk. The key is to identify the risk, to quantify the risk and to manage the risk.

“The other key factor is those who are willing to change versus those who are not willing to change. We're having to change in ag lending, just like our producers. We have to have a real drive for continuous improvements and to make adjustments. Those that change will play the game; those that don’t will not play the game.

For more information on the conference, visit the National Agricultural Law Center at https://nationalaglawcenter.org/midsouthcle2020/.