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| Notes were called that were current. My operating note was made in March. I had to put up extra security besides the crop. My note was called in the second week of June. PCA had a lien against my crop. Basically they shut me off after paying for seed and some dry fertilizer, but after I had applied everything.. I owed the coop for chemicals and some fertilizer. I also had an equipment note that was current. That was also called. Since PCA called my note but had my crop and equipment as security it gave them more security for the $$ owed. In other words I made their total book look better.
That was a hard conversation with the Coop manager. I told him I would pay what I could from custom work. I made payments to the Coop and to PCA all summer from my custom work. Coop was paid before harvest and PCA was paid before all the crop was gone.
The reason given for my notes being called was my net worth was going down year over year. I guess it was if you figured 0 value for crop in the field and equipment value dropping 75% in a few months.
No ones balance sheet can use those numbers and show an increase in net worth.
FYI, The machinery was purchased used at auction, except one tractor financed through AC credit. I had used a depreciated value on my financial statement so it was not inflated.
Granted machinery prices were dropping like a rock at the time but my total debt for a line of equipment, putting in the crop on 400 acres row crop a few cows and a hundred head of hogs was $18,xxx.
It was not a case of notes not being renewed. They had been renewed and were only a few months old and not due for another 9 months. I believe they intended to call the notes in June when they were made in March.
Just a few interesting tidbits. The loan officer told me I couldn't make it as he couldn't make it farming. His Granddad gave him a paid for 80, bins full of grain, with a line of paid for machinery and he lost it. Obviously to him I had no chance.
I had to put my straight truck up for additional security to put in my crop. I gave $18,000 cash for it. When they called my note they would only let me sell it for $5,000. I couldn't sell it for more. Some how it just didn't sell!
Also since they called my notes and I couldn't come up with the cash I was now high risk. That raised the interest rate. It also raised my interest rate when they dropped my equipment value to near 0 as it showed I was under secured.
Imagine buying equipment with 25% down and owing more on it in 9 months than you paid for it.
Then imagine paying off what you borrowed plus 29% interest. Then finding out one has to pay back another roughly 13% ( 10% stock charge plus interest)of the loan value to get clear title. Then after all that you have to sue to get the liens released.
Edited by IADAVE 3/23/2023 16:22
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Banks calling in Ag loans ?
