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Lenders see young farmers learning more and taking hard-fought lessons with them.

Holly Spangler, Senior Editor, Prairie Farmer

December 3, 2021

3 Min Read
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BETTER POSITION: The goal for lenders, says Aaron Johnson at Farm Credit Illinois, is to help young farmers be prepared for the next opportunity that comes their way. Holly Spangler

How well do young farmers understand their finances? Aaron Johnson, president and CEO of Farm Credit Illinois, says they may be more prepared for the next agricultural cycle than any he’s ever seen — and that’s saying something, given his lengthy career in ag lending.

“This new group of young farmers that have been through the 2014-to-2019 time period — where land values came down 15% and margins tightened — they are doing a better job managing finances and family living,” Johnson says. “They are as astute and prepared for the next cycle as any generation that I’ve seen.”

In the agricultural cycle, those farmers who hit the 2014-19 time period came off a 10-year cycle that saw really good prices. Johnson saw a lot of confidence in young farmers who were ready to take the world on and wanted older farmers to get out of the way. Then they hit that tight five-year period.

“I think there were a lot of lessons learned,” Johnson says. They saw how hard it was to produce income to replace machinery and bring other people back to the farm. And they saw how hard it was to hire consistent and reliable farm help.

“It seems to have made them more astute, and they’re watching their financial positions more, doing more cash rent analysis and financial analysis as they make their decisions,” he says. “I’ve been very impressed with young and beginning farmers the past couple years and how they’re operating their businesses.”

Financial learning curve

Johnson was specifically referring to a group of young and beginning farmers who participate in Farm Credit Illinois’ FreshRoots program, which partners financial education with lending incentives.

FCI started that program in 2018, with two goals in mind: Help improve young and beginning farmers’ financial knowledge base and offer them better loan rates. According to FCI’s Aimee Shasteen, the program is two-pronged.

On the lending side, farmers can get discounted interest rates and pricing. On the learning side, FCI offers up to $2,000 to complete several courses in farm financial analysis, balance sheets and crop insurance. Shasteen says many young farmers apply it back to their loan, but they can use it any way they’d like.

To be eligible, farmers need to be Farm Credit members who are 40 years old or younger, or in their first 10 years of farming. Some are both. Shasteen says they increased the age range to 40, above the 35 years that the national Farm Credit system recognizes, with purpose.

“We got feedback that some older farmers aren’t giving up the farm until their children are in their 40s and 50s even,” Shasteen says. “We bumped it up to 40 so we could catch more people who still need help.”

Those who aren’t members can still attend courses and reap the educational benefits, and their incentive dollars are held in the system until they’re ready to use them.

To Johnson’s point, the program has been successful. Young farmers in their 60-county region of Illinois know more than they used to.

“We’ve paid out nearly $1.5 million since 2018 and have 1,300 members,” he says. FCI has made $214 million in real estate loans to young and beginning farmers and has extended $183 million in operating loans.

“It’s not only reduced interest rates and reduced credit standards, but it’s a development opportunity for the young operation,” he says. “It’s been a very good program for Farm Credit Illinois.”

It’s been good for young farmers, too. “They’re studying and learning more and developing their operations,” Johnson says. And ultimately, he wants young farmers positioned to take advantage of the next opportunity.

Read more about:

Young Farmer

About the Author(s)

Holly Spangler

Senior Editor, Prairie Farmer, Farm Progress

Holly Spangler has covered Illinois agriculture for more than two decades, bringing meaningful production agriculture experience to the magazine’s coverage. She currently serves as editor of Prairie Farmer magazine and Executive Editor for Farm Progress, managing editorial staff at six magazines throughout the eastern Corn Belt. She began her career with Prairie Farmer just before graduating from the University of Illinois in agricultural communications.

An award-winning writer and photographer, Holly is past president of the American Agricultural Editors Association. In 2015, she became only the 10th U.S. agricultural journalist to earn the Writer of Merit designation and is a five-time winner of the top writing award for editorial opinion in U.S. agriculture. She was named an AAEA Master Writer in 2005. In 2011, Holly was one of 10 recipients worldwide to receive the IFAJ-Alltech Young Leaders in Ag Journalism award. She currently serves on the Illinois Fairgrounds Foundation, the U of I Agricultural Communications Advisory committee, and is an advisory board member for the U of I College of ACES Research Station at Monmouth. Her work in agricultural media has been recognized by the Illinois Soybean Association, Illinois Corn, Illinois Council on Agricultural Education and MidAmerica Croplife Association.

Holly and her husband, John, farm in western Illinois where they raise corn, soybeans and beef cattle on 2,500 acres. Their operation includes 125 head of commercial cows in a cow/calf operation. The family farm includes John’s parents and their three children.

Holly frequently speaks to a variety of groups and organizations, sharing the heart, soul and science of agriculture. She and her husband are active in state and local farm organizations. They serve with their local 4-H and FFA programs, their school district, and are active in their church's youth and music ministries.

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