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n. Illinois | have seen 21 operations to date and the score right now is 5-16. 5 made money and 16 have lost. All 16 that lost money have destroyed a lot of working capital. of the 5 that made money only 1 increased working capital. The working capital burn in 2024 is going to be significant as well as the cash flows are all very tight with $4.5 corn and $11.50 beans and many have bigger payments in 2024 than in 2022 due to capital spending.
Bankers are not helping any either. Just saw a request to purchase a farm and finance 100% with the use of FSA guarantees and direct financing. But it has debt payment of $670/ac on 175bu/ac ground Gross would be $800 at best. Equity after purchase of 16%. Negative working capital that is about 33% of the operations gross income. Only redeeming value is strong off farm income in excess of $200,000 but being set up without a monthly payment to tap that income source. I can't tell you how many deals I have fixed like this over the years, Being set up to fail at the top of the real estate market ignorance of the past is what we are seeing today. | |
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So Met With The Banker Again
