Ag lenders and their farmer customers have been working to navigate the impact of the new coronavirus as the situation unfolds.

“The impact has been broad and far-reaching,” Lance Albin, president of UMB Bank’s agribusiness division, says. “Nearly all commodities have been down, as you would expect. The cattle market has been really volatile.”

Jeff Houts, the executive vice president and COO for FCS Financial, says the outbreak brings a lot of uncertainty, and “uncertainty always complicates things.”

Albin says there are a few silver linings for farmers based on the timing.

“A decent amount of the ’19 crop has been sold, and it’s a while before they need to sell their ’20 crop,” he says. “There’s some time before they need to market their crops.”

The Federal Reserve twice lowered interest rates in an effort to cushion the impact of the virus on the economy.

Houts says the moves aimed at supporting market presence and increasing liquidity. Lowering short-term interest rates should provide that increased liquidity in the market. However, longer-term interest rates are more market-driven, and Houts says farmers should always think about their individual situation.

“The good news is rates remain historically low,” he says. “You can still lock in very attractive long-term interest rates.”

Albin says the Fed lowering rates will have immediate benefits for farmers with a revolving line of credit.

“Those folks are going to see a reduced interest rate, if not immediately, then within a month,” he says.

Albin also says that with most farmers making payments on an annual or semiannual basis, they have time to make adjustments. Heading into 2020, he says farmers are entering a sixth year of leaner profit margins, so they were already in the mindset of making adjustments to be profitable.

Houts says he doesn’t have a “crystal ball,” but the virus will likely continue to have impacts in the near future, including price adjustments and possible disruptions in the supply chain.

“We’re focused on supporting agriculture and rural communities through all these situations,” he says.

Albin says the virus situation is another reminder of the importance of always being nimble, flexible and responsive. Communication with farmers has been key for ag lenders.

“We want to try to come up with solutions that fit them best,” Albin says. “We’ve been in very frequent conversations with our customers since this really began. … The best surprise is no surprise.”

He says it is good to get prepared before major events and downturns hit, even if this is a largely unique situation.

“This is a significant event,” he says. “It is a historic sell-off in some regard.”

Houts says there could still be opportunities this year.

“We want to make sure we can assist them and they know what their options are,” he says. “There have been challenges to cash flow based on the margins available. We continue to work to keep open communication with farmers and agribusiness owners so they can manage their businesses with as many facts as they can have.”

Ben Herrold is Missouri field editor, writing for Missouri Farmer Today, Iowa Farmer Today and Illinois Farmer Today.