What’s next for ag in 2020?

Editor's note: We reached out to Midwestern bankers to give us a more detailed review of 2019, predictions for 2020 and specifics on how the weather and trade war affected their ag banking customers. This is the fourth of four posts. See our previous installments on 2019 trends, weather impacts, and thoughts on the ongoing trade war..Where is the ag industry headed in 2020?.Grant Whaley, Farmers & Merchants Bank, Boswell, Ind.: "Many of my customers are holding off on making purchases for 2020 inputs for now. They are keeping their options open for cropping decisions. I see our industry getting older on average. There just aren't that many young people with the resources to be able to start farming without significant assistance. Additionally, the number of young ag lenders seems to be less than when I got into this business over 30 years ago … It's such a wonderful but very, very challenging field. You get to work closely with some of the finest people you will ever know, but you also have to maintain an objective balance to sometimes be able to say 'no' for the long-term good of your client. Hard to walk that fine line.".Jeff Gruetzmacher, Royal Bank, Lancaster, Wis.: "There are certainly headwinds for agriculture going into 2020. Coming into an election year, it generally follows that the overall economy slows a bit coming up to November. The U.S. dollar has been slowly strengthening over the past two years, which doesn't help agricultural exports. A seemingly abundant crop and carryover, further dairy industry consolidation and processor issues are also headwinds. Soft dairy building and machinery prices are weakening balance sheets for those who rely on those asset prices. On the bright side, interest rates are at very low levels and producers can lock in long-term rates around that 4 percent level. Investor and city-people interest in land has also buoyed land prices, providing a stable balance sheet to those who have land. A strong job market and increases in wages help non-farm income for those who have family members that work. I would mark 2020 as a year of uncertainty and perhaps status quo.".Peter Scheffert, Community Resource Bank, Northfield, Minn.: "There is not a lot of optimism that there is a big turnaround on the horizon. Many are seeing agriculture bumping along the bottom of the trough for another year just hoping it doesn't get worse. Farmers are hoping that the trade issues will get fixed, but not sure that a 'trade deal' will fix anything very fast or will even fix everything in the long run. They are starting to realize that the trade issues are going to have some long-term impacts.".Peg Scott, Union State Bank, Greenfield, Iowa: "Our customers have been farming for a long time, so they have quite a bit of equity; they're not in as fragile a situation as many of them were in the 1980s.".Brett Hanson, First Interstate Bank, New Underwood, S.D.: "There is concern with our producers that we are in a low-price scenario for the long haul. In addition, we are moving into the winter in a wet pattern. So, no doubt there are many who are worrying that we will again see higher-than-average calf death loss and sickness. Crop producers are concerned with getting 2019 crop out before spring and, of course, the potential of delayed planting again. Economic issues seem to point to stable low interest rates, which may be the most positive thing out in ag country right now."