Stay in Touch with Your Lender

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Stay in Touch with Your Lender

With multiple challenges in the tree-nut sector this year, it’s important to know where you stand financially. And that means communicating with your lender.

“I encourage any grower to reach out to their banker as soon as possible to go over what we call the crop margin, or working capital, position,” said William “Bill” Ray, senior relationship manager with Yosemite Farm Credit in Merced, Calif.

That includes determining how much cash you have in the bank, your crop inventory or receivables, bills you owe and loan payments you will need to make. “Knowing those will allow you and your lender to figure out your options,” Ray added.

Most growers have variable-rate operating loans, Ray said, and some “are going to be in for a rude awakening if they haven’t been paying attention to what their loan balances are. Their payments are going to be quite a bit higher than they were last year.”

If you’re not financially sound, you will likely have to make some changes, he noted. You may have to take out some orchards or get out of leased acreage that’s not yielding good returns. You may have to sell property or excess equipment to improve your cash position. Some growers generate additional revenue by doing custom work for neighbors or absentee owners.

“The worst thing you can do is procrastinate,” said Ray. “If you’re in trouble, waiting takes away a lot of your options for next season. Get started sooner rather than later.”