Dale Minyo talked with Joe Costa, Evan Hahn and Mary Fannin at the new FCMA location in Alliance.

Managing risks and opportunities in 2022

By Matt Reese and Dale Minyo

Ohio agriculture is facing a time of great risk and great opportunity.

“This year has certainly presented a lot of different challenges. We started off with a lot of wet weather then hit a dry spell, but yields will be decent. There are rising interest rates, inputs are increasing if you can even find them. Equipment is hard to find and if you can find it can you get it bought? Risk management has taken on a whole new light,” said Evan Hahn, vice president of agricultural lending for Farm Credit Mid-America (FCMA). “We need to be thinking longer term with that. Risk management goes beyond crop insurance and making sure inputs get bought right. I think there were many opportunities for producers to lock in profitability this year too.”

A risk management topic of significant current interest is, well, interest.

“With the ag customers we have, everyone is affected by interest rates. Everyone got spoiled in 2020 and 2021 with how low interest rates have been. Then they kind of jumped up to what more natural levels are. Whether it was our Rural 1st division, which is consumer home loans, or on the ag side, refinances were pretty much eliminated to nothing,” said Joe Costa, FCMA financial officer. “For new purchases like property or equipment, the prices stayed about the same but interest rates have jumped up dramatically. The purchases stayed about the same but their monthly payments went up based on the interest rates that have risen.”

To find the right tools and strategies to best manage the risks and opportunities of today’s agriculture, farms need to have a team of trusted advisors in place.  

“You need to put together a team to help manage the risk and capitalize on opportunities and we’d encourage you to have a lender on your risk management team to sit down and look at 3 scenarios: the best case, the worst case and what is in the middle. One of those will be right and understanding those scenarios will help you better manage whatever the outcome is that year,” Hahn said. “We want to be a resource for the agricultural community.”

To better serve as a resource in the northeastern part of Ohio, FCMA is opening up a new office in Alliance to serve Jefferson, Carroll, Mahoning, Columbiana, Stark, and Portage counties.

“FCMA supports rural communities and agriculture and this new stand-alone office we’ve built in Alliance helps us to do that. We’ve been here in Alliance for a long time but now we finally have our own location. It is a much easier place to get into. It is part of our ongoing commitment to rural communities and ag by building a new facility here. It helps us better serve our customers,” Hahn said. “We prefer to meet with our customers right on the farm, but some people want to come into the office. We were able to put the new technology in here with all the bells and whistles that come with a new office. We were at our other location for 20 years and this gives us a fresh start.”

The new facility will be holding a grand opening event on Sept. 9.

“We’re inviting customers, farmers and the whole community to stop by for locally grown food, a chance to win prizes, and tours of the new office,” said Mary Fannin, FCMA financial officer in Alliance.

The grand opening event will be held from 11 a.m. to 2 p.m. where the community is encouraged to visit the new location at 1980 West Main Street in Alliance. Also be sure to visit FCMA at the 2022 Farm Science Review.

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