Thursday, August 16, 2007
‘Things changing’ for cattlemen
By SUE WATSON
Joe Hill and Matthew Raff with the Land Bank of North Mississippi were guests of the Marshall County Cattleman’s Association at its August meeting.
Hill said land values are being pushed up in North Mississippi by development, with companies like Toyota and General Electric moving in. Non-farm land buyers are also pushing up the price of cattleland in the area.
When land values rise, rent values go up and cattlemen have to be ready for these economic changes, Hill said.
“Things are changing in North Mississippi,” he said. “People need jobs and everybody cannot have row crops and cattle. The land bank is for the end-user, people who enjoy the land and have the will to improve it.”
With rising costs of operating, cattlemen need cash flow to service debt and make timely payments so their interest rates don’t get out of control, Hill said.
“Producers have to manage risks to facilitate buying, improving and adding property to their operations,” Hill said.
The Federal Land Bank was put into operation by an Act of Congress in 1913 to help farmers stay in business with long-term loans at low interest, Hill said.
“In that day farmers’ loans would come due every three years,” Hill said.
Interest rates are now 7.9-8.5 percent as compared to 5.25-6 percent in the 1980s and 1990s, Hill said.
DeSoto, Tate, Panola, Yalobusha, Lafayette, Marshall and Benton counties are served by the Land Bank office in Senatobia.
Raff said the land, not the cattle or equipment, is used as collateral for the Land Bank loans.
“But producers can borrow on the equity in their land to buy cattle, build a barn or build fences,” he said.
Hill added that the Land Bank borrows on farm credit bonds now available in the billions of dollars to the Land Banks.
“The bonds are second only to U.S. Treasury bonds as far as rate,” he said. “We are able to borrow money fairly cheaply.”
The Federal Land Bank of North Mississippi is an association and to participate members have to purchase stock.
“We have a good bond rating and show good earnings and we return a portion of the margin back to the stockholders as dividends,” Hill said. “We actually work for our borrowers.”
The field day tour for the Marshall County Forestry and Cattleman’s associations is set for October 13. The field day will be held again this year at Foxden, with Governor Haley Barbour scheduled as keynote speaker.
For more information on the field day, contact the Extension office at 252-3541.
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