A prominent agricultural banker says 2009 might be a year for prudence and fortifying the balance sheet.
“Coming off a very good crop, good prices, good yield and a good cash flow position, maybe it is time to take a look at the balance sheet,” said Brian Little, head of agriculture and agribusiness with RBC Royal Bank.
Farmers might want to consider paying down old term loans, prepaying mortgages for 2009 and prepurchasing inputs for the next crop.
“I would call this fortifying the balance sheet … putting you in a stronger working capital position so that you have the opportunity to buy that land next door or you need that equipment or whatever, you’ll have cash or access to immediate credit to make that move. Cash is king.”
