– Our guest is Tim Cook, who is the chief credit officer for Frontier Farm Credit as well as Farm Credit Services of America. And, Tim, we’ve kind of set the stage on kind of where we got to where we are now. So, let’s talk about credit availability opportunities. So, maybe farmers have paid off some of those loans or banked some of that, how are we looking into 2021?
– As we come off of 2020, we’ve talked about, we think overall profitability is gonna be pretty strong. Some of the ad hoc program payments that we think will help restore some of the working capital that’s been lost the last couple of years. So, as we look at 2021, we think producers have an opportunity to lay off some of the risk on the commodity price side and maybe even focus on, whether it’s rolling some equipment that has been deferred the last several years. We also think there’s gonna be a pretty robust real estate market this year. Prices have been pretty stable, and we think those will continue to be supported by the low interest rate environment that we’ve enjoyed these last six or seven months. As well as the reasonable level of real estate that’ll be on the market and available for sale.
– Tim, and that’s what I think 2020, it’s been kind of a start stop when it came to real estate. There may have been months or weeks that we saw a lot of sales, very strong sales, and then there was times when people held back, and every day there’s still more things that we’re not sure about moving forward with the COVID situation. But there’s probably a lot of land that is ready that generations have inherited it or whatever, that maybe wanted to exchange that into cash.
– Yeah, I think there’s a couple things that’ll drive. As we talk to realtors and real estate brokers, they’re anticipating a very busy year for real estate activity. As you mentioned, when COVID hit, a lot of things stopped. And auctions that were scheduled either had to go to online or they were canceled all together. So, I think that rolled forward. We’ve got a change or at least what looks like a change in the administration coming in D.C., some uncertainty about what does that all mean from a tax standpoint. And as you said, every year, there’s just a normal amount of the state activity that happens. So, I think the confluence of those three components is also what will contribute to possibly higher real estate activity this year.
– All right, Tim, we appreciate your insights on kind of where we have been and where we’re heading, and interesting comments. So, we appreciate it. Thanks.
– Yeah. Glad to do it.
– Tim Cook, who is the chief credit officer for Frontier Farm Credit and Farm Credit Services of America has joined us. Stay with us, we have more coming up.