Federal Agricultural Mortgage Corporation · NYSE:AGM

Federal Agricultural Mortgage — Farmer Mac Webinar (July 2016)

9 slides from Federal Agricultural Mortgage's conference presentation, Jul 6, 2016

  1. Slide 1: The Good, Bad and Ugly of Agriculture and Agri Lending

    THE GOOD, BAD AND UGLY OF AGRICULTURE AND AGRI LENDING Dr. David M. Kohl Professor Emeritus, Agricultural and Applied Economics Virginia Tech, Blacksburg, VA (540) 961-2094 (Alicia Morris) | (540) 719-0752 (Angela Meadows) | sullylab@vt.edu Macro Clinic Video Blog: http://agstar.com/edge/ Road Warri

  2. Slide 2: Central Bank's Snapshot / Issues of Agricultural Lending Sector

    Central Bank’s Snapshot  U.S. stimulus moderating  Europe’s stimulus  Bank of Japan’s stimulus  China’s devaluation of currency  strong dollar headwinds  duration of headwinds  winners and losers currency war 3 Issues of Agricultural Lending Sector  supervision lite  shell game  peer to pe

  3. Slide 3: Federal Reserve's Interest Rate Barometer / Lending Economic Dashboard

    Federal Reserve’s Interest Rate Barometer Indicator Possible Change Definite Change Current Status Unemployment 7.0% 6.5% 4.7% GDP Growth 2.0% 2.5% 1.1% Core Inflation 2.0% 2.5% 2.2% Headline Inflation 4.0% 5.0% 1.0% Watch List: • Dr. Yellen • Rail traffic • Overland trucking • FOMC voting • Shoe sh

  4. Slide 4: Median Net Farm Income: All Farms vs. High 20% vs. Low 20%

    Eat Up 7 Median Net Farm Income: All Farms vs. High 20% vs. Low 20% 8

  5. Slide 5: Median Net Farm Income: By Enterprise

    Median Net Farm Income: By Enterprise 9 High vs. Low Profit Crop Farms 2015 Minnesota – Gross Income >$1M 1 Low High Gross Sales $1,662,000 $2,312,000 Median Net Farm Income $-150,000 $468,000 Term Debt Coverage (Accrual) -0.38 1.73 Age 53 49 Years Farming 31 28 Debt to Asset % 44 27 Current Ratio 1

  6. Slide 6: Net Farm Income, 2015

    High vs. Low Profit Crop Farms 2015 Minnesota – Gross Income >$1M 2 Low High Asset Turnover 27% 24% Operating Profit Margin -12% 18% Total Crop Acres 2,369 3,361 Percent of Crop Acres Owned 20% 31% Corn Yield 199 195 Soybean Yield 56 49 Wheat Yield 74 75 Corn Price $3.84 $3.82 Soybean Price $8.93 $9

  7. Slide 7: Working Capital as Percent of Gross Income; Why Land Values Have Not Declined

    Working Capital as Percent of Gross Income 13 Why Land Values Have Not Declined  asset bubble vs. credit bubble  profits, cash, equity  outside investors  crop insurance  energy, water, & minerals  liquidity burn vs. equity burn in 2017!!  refinances spigot turnoff 14

  8. Slide 8: Tips & Philosophies to Endure the Cycle

    Collateral Mountains Cash Accounts Working Inventory Peak Receivable Prepaid Capital Pinnacle Ridge Promise Business Hills Non-Farm Capital Net Income Earnings Infusion Spring Spring Canteen Prosperity Valley Lake Family Living/ Earnings Dividends Creek Killer Toy Swamp Income Tax Gulch Principal &

  9. Slide 9: Question Watch List

    Question Watch List  Where and what are our next set of lender/court issues?  Are your government guarantees in jeopardy?  What are five practices proactive producers are executing?  What size and/or type of businesses are experiencing financial difficulties?  What are the hot topics at lending

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