In a Trying Time, Reasons for Optimism

4/22/2020

I’ve been guilty of rolling my eyes at the older generation’s extreme stories that seemed from another time and irrelevant to our experience. Now I get it. Each year, I see things I didn’t think could happen. I don’t need to elaborate much on 2020. We’re all riding the same wave. I live in Kentucky, which has been aggressive in closures. It didn’t seem possible the government could shut down a private business, including chiropractors, hair salons and clothing stores. I’m not sure why liquor stores are deemed more essential, unless from a tax revenue standpoint. Long story short, I’ve decided anything can happen.

As much as I’d love to rant about politics and social injustice, it’s not productive and we’re all tired. The past several weeks have been a lot to take in. The good news is it’s not all doom and gloom. The following are my points for optimism:

SBA Loan. Some ag businesses are eligible for loans from the Small Business Administration’s Paycheck Protection Program (PPP), whereas many farmers are not eligible for that program. I applied for it this week through my lender. I am no expert, but will share how I think it will work. I will have a forgivable loan for 2.5 months of payroll if I keep up my average payroll from the previous year. It’s not limited to payroll expenses, but the purpose of the loan is primarily for maintaining steady employment. Worst case scenario, a portion, or all, of the loan is repaid at a low interest rate. Ethically, I feel like if someone comes down with the corona or is exposed, I should pay him to stay home. In reality, I wonder if others would simply replace the help to keep a steady payroll tab. As of late this week, the program has run out of money, but chances are good it will get another round of funding.

USDA farm aid coming. The details are vague at this time, but appears the aid will first support businesses supplying food directly to consumers. For example, milk demand has taken a hit from school closings. My local grocery struggles to keep milk in stock, but I assume it’s hard to totally change logistics overnight. Typically, a business would have years to adjust to consumer trends, but the coronavirus event changed demand instantaneously.

I don’t think grain producers, for example, will know of any aid until summer. Why? Because announcing programs before crop certification could skew planting intentions. It scares me to see the government throwing money around, but I don’t want to be left out either.

Investment Opportunities. I touch on this lightly because anyone in the stock market before the coronavirus has taken a large hit. But, those that weren’t are looking at a chance to buy the dip. An older man came by the other day and said “Katie, this is the chance of a lifetime for you. Buy as much as you can because you’re young enough to watch it come back. It may not be fast, but the odds are in your favor.”

Lower Interest Rates. I didn’t realize how big of an impact interest made to my bottom line. Sure, I’ve heard it for years, but it’s easier to absorb a lesson when it directly impacts your life. For example, the difference in interest from last year’s operating line to this year will save enough money to cover our family living! That’s huge. And no, I don’t want to compare it to the 80s.

Lower Inputs. Low fuel prices tend to weigh on corn prices, but lower fuel is still a decent savings. At least it’s an input that hasn’t gone higher like seed and chemicals. I’m showing my price for fuel will be a third less than last year. I’m figuring my fertilizer prices will be 25% lower.

More optimistic growing season than last year at this time. I hate to jinx it, but 2020 is likely to be better for those worst- case farm situations in 2019. Sure, it would be nice to have a higher pricing outlook now too, but at the end of the day, the price is irrelevant if you have no production.

Great time for Rural living. If you live in a rural town, you know how many young adults are staying around—very few. Large cities have better opportunities for work, entertainment and housing. It took me forever to learn of Top Golf and Uber. And my love for Walmart made me the super-hillbilly with my Whole Foods friends. Today, I feel pretty darn good about it. Urbanization isn’t as cool during a pandemic.

Knowing you’re essential. I’d say farmers are a pretty confident group, but isn’t it nice to hear the general population admit it?

There’s a high and low point in every year.This one has started off a little rough, but there will be plenty of opportunities to come. It’s a weird time, but we’ll make it through.

Article by Katie Hancock, Brock Associates

 

Tags: Hope