Others would rather be outside working with cattle or at conferences learning the latest disease management techniques. 

If you’re not in the first category, your banker might know more about your farm financial indicators than you do. 

There are such long lists of financial indicators available it can be hard to know where to start. And once you calculate a financial ratio, how do you know if yours is “good”? 

If you don’t calculate these three financial ratios, your banker will. So, why not start by doing the math at home and taking them along to your next meeting?

Why financial indicators matter

Rising land prices have pulled up many farmers’ net worth statements. 

“There is not an equity issue out in farm country. Most operators are holding land that has appreciated well,” says Craig Macfie, founder of consulting firm Spring CFO (link to www.springcfo.com). Macfie has seen all kinds of farm financial statements through his consulting work, as an accountant, as a past CFO for Monette Farms and through his experience as a farmer in Crystal Springs, Sask.

But lenders care about more than net worth. Lenders want to know if your assets are generating profits, and if you’re able to repay loans. 

In some banks, Macfie says, “the bank credit department is God, and your bank relationship manager is the Pope.” That is, the banker you meet with doesn’t typically have authority to make lending decisions without support from someone in the credit department. 

When you need a loan, Macfie says, “You need the Pope on your side, advocating for you.” Your bank manager can tell the credit department what a strategic farmer you are, but the credit department is still going to want to see the numbers. 

Your financial indicators will have to carry the day. 

The lenders’ perspective

Macfie suggests three key financial indicators can show your farm’s ability to repay loans. 

Roxane Lieverse is an executive vice president and the head of agricultural banking with Rabobank in Canada. When asked which financial indicators are important for lenders, she lists the same three indicators. 

The financial indicators these two professionals see as highly relevant to bankers are:

1. Working capital to expense ratio
2. Debt service coverage ratio
3. Debt to equity ratio

Together, these three indicators show lenders your farm’s recent financial performance and your farm’s ability to repay loans. 

1. Working capital to expense ratio 

What it measures: The working capital to expense ratio measures your farm’s ability to stay in business through the next production season. 

“It shows the actual working capital available for a producer to put in their crop, whatever it is they’re growing or producing,” Lieverse says.

How to calculate it:

First, calculate your working capital:

Working Capital = Current Assets – Current Liabilities

Where current assets equal assets that can be converted to cash within one year (e.g., bank accounts, inventory, prepaid expenses) and current liabilities that must be paid within a year (e.g., accounts payable, operating loans, rent payments, credit card debt, taxes).

Working Capital to Expense Ratio = Working Capital / Annual Operating Expenses

Some financial analysts use these same measures to calculate the Current Ratio, which compares current assets to current liabilities. 

Current Ratio = Current Assets / Current Liabilities

The current ratio can be used to measure short-term viability, but Lieverse and Macfie both find comparing working capital to annual expenses more intuitive. 

A “good” ratio for you depends on your strategy. 

If working capital is equal to annual farm expenses, your ratio is 1:1. “Your farm can finance next year’s crop,” Macfie says.

Many farms’ ratio is less than one. 

“Some farms put all of their working capital into more land and machinery, and that’s how they grow.” These farmers are using cash-on-hand to finance expansion, whether it’s land, machinery or equipment. “That works,” Macfie says, “until it doesn’t.”

If the working capital to expense ratio is too low, the farm will be short on cash, perhaps to the point of financing short-term inputs with expensive retail credit. 

“Once you maximize retail credit, there’s really no options besides refinancing or selling land,” Macfie says.

The safest approach is to keep your working capital to expense ratio well above 1:1. But this plan may not keep your money working hard enough. Maybe some capital could replace depreciated assets or repay high interest loans.

Macfie visualizes this ratio as a teeter-totter, with managers balancing cash on hand against re-investments. “The hard part is that balance.”

What does Macfie advise? “The easy advice is 50 percent,” Macfie says, noting that the ideal situation will always vary from farm to farm according to your strategy and your industry.

2. Debt service coverage ratio (DSCR)

What it measures: “Bankers are concerned that you can repay your debts,” Macfie says. “Why would you loan more money to someone who hasn’t shown recently that they can service debt? If your three- or five-year history doesn’t show you can service more debt, why would I give you more debt?”

The debt service coverage ratio compares your recent annual income to the size of your debt. 

How to calculate it:

DSCR = Income / Debt Service

Where income equals farm revenues (after taxes) minus operating expenses (excluding interest), plus off-farm income. Debt service equals payments on short-term and long-term loans, including principal and interest.

What is a good ratio? If your debt service coverage ratio is 1:1 or higher, you have enough income to pay your debt. A higher DSCR indicates higher profitability relative to debt.

Lieverse would like to see a ratio a little higher than 1:1. “Ideally above 1.25, but it’s very heavily dependent on the industry.” 

Rising interest rates will increase your debt costs, decreasing your DSCR. You could raise your DSCR by restructuring or paying down debt. 

A manager focused strictly on DSCR might turn down growth opportunities that require debt. The ideal ratio is the number that fits your strategy.

3. Debt to equity ratio (DER)

What it measures: The first two indicators on this list are more important to banks, says Lieverse, as they’re more relevant to day-to-day operations. The DER shows your long-term viability. “If there was a profitability concern, long-term, how could the producer sustain themselves?”  

How to calculate it:

DER = Total Liabilities / Total Shareholders Equity

Where total liabilities equals all short- and long-term debt and total shareholders equity equals total assets minus total liabilities.

Corporate balance sheets usually show long-term assets such as land and buildings at purchase price (book value). Updating asset values to current fair market prices makes the results more realistic (and probably more comforting). 

What is a good ratio? A low DER indicates a farm with flexibility to borrow money if opportunities arise. A farm with a high DER may have taken on debt to buy more land or may be in a financially vulnerable position.

While long-term customers may have some leeway, Macfie says, “Banks don’t care if you’re sitting on a bunch of land equity if the farm hasn’t been profitable in a few years.” 

You could raise your DER by selling land or equipment to repay loans. But unless downsizing is part of a long-term strategy, it may not be the ideal solution for you or your lender.

Take action to control financial indicators

Many aspects of farm financials are outside your control. If you find yourself with less-then-perfect ratios, here are four steps to take:

1. Develop good working relationships: “You can’t control the weather, but you can control having a good relationship with your banker and your accountant,” Macfie says. 
2. Timely financial statements: Your financial indicators may not be great, but they can still be timely. “You can control getting your bookkeeping to the accountant on time, so they can get it to the banker on time,” Macfie says.
3. Check your corporate year end: Ratios change depending on where you are in your annual production cycle. For example, if you’re a grain farmer with a July 31 year end, “the bank is testing your balance sheet at the worst time of year.” Your Working Capital to Expense ratio will be low, since your current assets are still out in the field. Re-calculate that ratio on October 31, when your barley is in the bin. 
4. Cut costs: If most of your financial indicators are grim, it’s time to look at your operation. “There are efficiencies to be found across the board on land, machinery, labour, agronomy and other operating expenses,” Macfie says. “Keep looking.”

Looking to the future

Lieverse describes herself as a “disruptive agricultural banking leader.” But even innovative bankers still calculate ratios. 

“Banking has a bit of tradition to it,” she says.

Most of Lieverse’s clients are operational experts. “I very seldom stop at an operation where a producer doesn’t know their costs of inputs down to the acre and cannot articulate soil health with a degree of expertise.”

But some farmers have become experts in these areas at the expense of “soft side” business aspects. “Many farms have struggled in operational items related to finance and HR.”

When rising land prices create strong balance sheets, Lieverse says, “you can make mistakes and not really be forced to learn from them.” This probably won’t always be the case. “We’re going into a commodity cycle where margins are tightening. What are you doing to future-proof the farm?”

“Financial ratios are great because they tell us how the farm has done,” Lieverse says. “But what I’m equally interested in is hearing from producers about what they’re going to do. Financial ratios are about looking in the rearview mirror. But I know that operators are driving looking out the window ahead.”

The post A guide to farm financial ratios appeared first on Country Guide.

Well, the tide is going out in primary producer agriculture. Who will be left with clothes on?

Is the shifting tide due to the highest cost of production ever? The changing policy discussions? The geopolitical factors that come with trade wars? Or just the fact that weather events are becoming more common?

Whatever it is, there’s definitely a shift.

Growing up I never realized how much agriculture was trailing other industries in terms of financial acumen. We could once obtain loans with looseleaf net worth statements and personal tax returns. The words “accrual,” “debt service” or “working capital” were not words frequently thrown around, much less understood by most famers. 

In my early years agriculture was not profitable, and land was traded for property taxes. 

How things have changed.

As 2025 progresses, indicators of change have appeared. Banks are tightening up on reporting and covenants. Farms are starting to see cracks in their financial foundations. Even agricultural educational institutions are taking notice. 

A colleague of mine once commented that he had to be careful when discussing financial acumen with farmers during his presentations as it was a “touchy” subject. Well, guess what? Touchy doesn’t pay the bills.

As farmers move into a new reality of financial requirements, let’s break down the non-negotiables when it comes to running your business.

Accrual financial statements

For the first time, this spring I had a conversation with a lender who refused a restructure due to lack of historical accrual reporting. 

It was almost a breath of fresh air. 

For years the industry has been trying to push producers towards understanding and using accrual reporting over cash. Accrual allows the farm to identify if it’s profitable, not just if there’s money in the bank to pay the next bill. This is not to say that cash doesn’t have a place in key performance indicators, it just cannot be the only conversation.

Our partners to the south have been trying to push this standard for 30 years. Ever since the 1980s agriculture crisis, U.S. regulators and standards boards made it a key objective. But they have made little headway. 

I would like to think that Canada is closer but let’s say its efforts are the “best of the worst.” Over half of the primary producer industry has still not adopted accrual reporting and does not know if they are profitable year over year.

Call it the Holy Grail, but a true business requires accrual information throughout the year. Many of the farms we consult for now have internal controllers, monthly accrual reporting and know exactly where they stand in terms of profitability. 

This is how you can make decisions with no emotion, just data.

Budgets and projections

Budgeting is more of a spectrum than a destination. 

There are many factors that need to be considered when preparing a true projection that most fail to execute. The key areas of focus should be the following:

• Cost of production: The need to identify a farm’s true cost of production has never been greater. To move a step further you need to identify both an accrual and a cash number to appropriately market your product. One requires amortization (yes, this is a true cost as you are losing equity in your machines at a rapid pace per hour); the other needs debt payments as they are a cash drain and, depending on your leverage model, may be material. Overall, you need to identify a marketing plan that shows a sustainable return per bushel and per acre.
• Monthly burn rate: Without a monthly cash flow (preferably planned over an eighteen-month period) your ability to market falls only on price. For most farms, cash flow, logistics and many other factors go into when and how you market your products — even more so on livestock operations where you don’t have steady cash flow throughout the year. Knowing your monthly cash out-flows will help you make longer-term decisions.
• Capital planning: The time to decide on equipment and infrastructure is not when the salesperson sits down for a coffee. Most progressive farms create capital plans years in advance and stick to them. In the past, operations bought equipment in good years and then held tight when times got tough. This doesn’t allow for any future strategy or plan; it is purely emotional buying. Know what you can afford, when machinery requires replacement and how this affects your profitability and banking.

Key performance indicators

It still amazes me how many producers have never read a commitment letter from their lenders. 

On many farms, financial institutions are the only thing between them affording to put a crop in and calling the auctioneers. Agriculture is an equity rich-cash poor business and, as such, the ability to understand your key banking and internal ratios is more important than ever.

Following are the three indicators every operator should know at any point in their day:

• Working capital: How much cash you have available to cover future costs. This could be working capital cash in a bank account or grain in the bin that can be easily converted to cash. Working capital is calculated by your current short-term assets less your obligations due over the next year. This ratio determines how easily you can make sales and procurement decisions and whether you can take the family out for dinner on a Sunday night.
• Debt service: The indicator of whether you can make enough cash to pay your debt. For non-farm individuals this would be your employment income compared to your mortgage and car loans. For farms, this is whether over a three-to-five-year period the farm creates enough cash to cover the current debt obligations. This determines whether your banker will give you more money or shut the tap off.
• Debt to tangible net worth: Are your assets larger than the debt you maintain? This is the least important indicator with your lenders, but often a covenant, nonetheless. This indicates whether you have left enough of your personal wealth in the business in comparison to the bank’s risk. This often only becomes a broader conversation if land values decline or if you are slowly taking large amounts of cash out to buy personal assets.

Every time agriculture enters a down cycle the industry pushes primary producers into positive change.

It is an interesting trend as it follows the concept that good times create soft people, and hard times create hard people. 

Whether 2025 continues to be the year where we see the industry force change, only time will tell. But as an individual who speaks with a significant number of farms every year, I sometimes hope for short-term pain to force a long-term change.

The post Shifting tides bring change to agriculture  appeared first on Country Guide.

Merit Functional Foods, which entered receivership March 1 after just two years’ operation, has sold all its remaining finished and raw inventory and directed much of the proceeds toward “full repayment” of its debt to its operating lender, CIBC.

That’s according to the latest report from Merit’s court-appointed receiver, PricewaterhouseCoopers (PwC), which said in its Nov. 14 filing that the sale process it launched March 13 “has not yet led to an executed purchase agreement.”

PwC’s Nov. 14 report included a supplemental document laying out the details of that sale process so far — but that supplement was ordered sealed in a Nov. 23 ruling by Court of King’s Bench Judge Chris Martin in Winnipeg.

Information in that supplement is “commercially sensitive” and “would cause serious and irreparable harm and prejudice to Merit’s creditors and stakeholders in respect of the disposition of the (Merit) assets,” PwC said in its Nov. 14 filing.

PwC said it doesn’t intend to keep the supplemental document sealed indefinitely, but at least until “such time as a sale transaction for the assets has successfully closed.”

Meanwhile, PwC said Nov. 14, its separate process to sell Merit’s remaining product inventory has yielded about $3.3 million, down from a valuation of $3.8 million estimated back in March.

The receiver said it has also collected about $571,000 of outstanding accounts receivable — about 93 per cent, with the other seven per cent now seen as “likely being uncollectable.”

In its previous report in late March, PwC had said CIBC was owed about $5 million plus interest, fees and other costs. That amount included a cash-collateralized $1.025 million letter of credit the bank had placed with the Canadian Grain Commission (CGC).

PwC had said in March that Merit’s records showed no farmers were still owed money for any crops the processor had in its possession. In its Nov. 14 report, PwC noted the CGC had released its CIBC-issued letter of credit later in March.

As of Nov. 17, PwC said, Merit was estimated to owe CIBC about $4.157 million — including the cash collateral CIBC still held from the CGC letter of credit along with interest and other costs accrued since the receivership took effect March 1.

CIBC, as Merit’s operating lender, had been deemed “first-ranking creditor in respect of accounts receivable and inventory” and was seeking a payment out of those net proceeds, PwC said in its latest report.

Merit’s other secured creditors have approved the use of those proceeds to pay CIBC in full, “in order to reduce the amount of interest and costs continuing to accrue with respect to the CIBC indebtedness.”

Merit had opened for business in early 2021, with major shareholders including Vancouver plant protein firm Burcon NutraScience, U.S. agrifood firm Bunge, and former executives of Hemp Oil Canada.

Burcon had said in April this year it planned to submit a bid for the Merit assets in co-operation with another plant protein company it didn’t name.

Merit’s two remaining secured creditors include Export Development Canada (EDC), which was owed about $58.6 million, and Farm Credit Canada (FCC), owed about $36.4 million — neither total counting interest or other costs that have accrued since March 1.

EDC and FCC were in a consortium of lenders, also including CIBC and Agriculture and Agri-Food Canada (AAFC), that had provided Merit with $95 million in debt financing starting in 2020.

AAFC’s contribution was a 10-year, interest-free $10 million loan from the department’s AgriInnovate program.

— Glacier FarmMedia Network

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The federal ag lender on Tuesday said it will offer an unsecured credit line of up to $500,000 with loan processing fees waived, “to help producers, agribusinesses and agri-food operations with their immediate cash flow needs.”

FCC said it’s making the offer to both new and existing customers who are “experiencing financial difficulties, including cash flow challenges, due to higher-than-average input costs and elevated interest rates.”

While the Bank of Canada has maintained its policy rate since January, FCC warned in a March outlook that “additional intervention” could still be required to get inflation to two per cent.

Elevated inflation and interest rates are expected to slow consumer spending and business investments, FCC said in March, adding that if the U.S. Federal Reserve continues raising its policy rate, that could lead to a lower Canadian dollar if the Bank of Canada extends its pause.

A global economic slowdown has also resulted in lower growth in Canadian ag and food export volume, FCC said at the time.

Cost pressures in the “current economic environment” are difficult to pass on, FCC said Tuesday, and that’s led to “tough financial circumstances for some operations.”

“While the current experiences of individual operations within the different agriculture and food sectors are varied, we hope those who identify with these challenges will use this credit line as an opportunity to work through their current position and build back stronger than before,” FCC chief operating officer Sophie Perreault said in a release.

FCC reiterated it can offer flexibility to customers who are going through “challenging business cycles and unpredictable circumstances” on a case-by-case basis, such as through flexible payment options, payment deferrals or credit lines.

For example, the lender said last Thursday it would consider additional short-term credit options, deferral of principal payments and/or other loan payment schedule amendments for customers in B.C.’s wine sector up against financial hardship following “prolonged cold temperatures” last winter that caused significant damage to wine grapevines.

FCC said May 16 it would also consider similar supports for maple syrup producers in Eastern Canada following an “unfavourable change in temperature this spring” that shortened the maple syrup harvest in most parts of the region.

“This limited harvest can cause financial challenges for farm operations – not to mention personal hardship and stress,” Manon Duguay, FCC’s vice-president of operations for Quebec and Atlantic Canada, said in a separate release at the time.

“We stand by our customers over the long term, helping them pursue opportunities and overcome challenges, and this year’s unfavourable temperature has certainly been challenging for many maple syrup business owners.” — Glacier FarmMedia Network

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Finance Minister Chrystia Freeland on Jan. 25 launched pre-budget consultations and since then, her schedule has involved several meetings with stakeholders.

“We want to hear ideas from Canadians, from all walks of life, on how to restore strong growth, forge a more resilient middle class, and build back better. This is your budget; tell us what matters most to you,” she said at the time.

A hard date hasn’t yet been set for the next budget, but Freeland’s consultation period is scheduled to close on Feb. 19. An online questionnaire for the public is available until that date.

In August, the Canadian Federation of Agriculture released its wish list for the 2021 budget. In these budget consultations, the organization plans to continue to refer back to that document, which offers three broad recommendations, each highlighted by specific measures that can be taken.

To kickstart the economic recovery, the CFA recommends the government restore the AgriStability program’s payment trigger to 85 per cent and eliminate the cap to reference margins.

Ottawa is prepared to remove the reference margin limit and boost the program’s compensation rate, but releasing extra dollars to farmers qualifying for payments is being held up by Prairie provinces reluctant to sign onto the deal. The provinces are responsible for covering 40 per cent of the government tab on AgriStability payouts.

CFA is also putting a particular focus is put on the processing sector. Citing a $77 million investment from the federal government to help food processors combat COVID-19, the organization says additional support is needed.

“To secure these critical food infrastructure links in advance of a second wave and the peak harvest season for many Canadian commodities, CFA recommends the next federal budget increase financial support to the food processing sector,” the document says.

“In addition to this support for existing food processors, CFA also recommends that the next federal budget invest in programming to support the development of more food processing facilities across Canada.”

CFA is also asking Agriculture and Agri-Food Canada (AAFC) “to reallocate underutilized AgriMarketing program dollars to implement a Buy Canadian campaign for Canadian retail channels, and engage exporters to identify and address key export opportunities.”

The 2020-21 spending estimates from the federal government show $20.3 million was transferred to partners through AgriMarketing programs, while talk of an Ottawa-led “Buy Canadian” campaign has floated around since at least 2019.

That year, the Liberals committed $25 million over five years to “develop a national approach to better connect Canadians with and instill pride in Canada’s food system and its agriculture, food and seafood products.”

In January 2020, AAFC put out a tender seeking a marketing firm to launch a “social marketing campaign to better connect Canadians with, and instil pride in, Canada’s food system and its agriculture, food and seafood products.”

The tender said an annual media buy budget between an estimated $1.5 million and $4 million would be available.

By June, Bibeau was saying the promotional campaign would “have to wait a bit longer” before being launched. At the time, concerns were being raised within her department over the timing of that program, and on which commodities it would focus.

On Jan. 15, the federal government awarded a $113,000 contract to Markham, Ont.-based digital ad agency Feast Interactive for the Buy Canadian campaign, but a timeline for its launch remains unclear.

CFA’s budget wish list also includes a call for better leveraging of agriculture’s environmental contributions. It asks the government to create programs allowing “producers to generate credits for agricultural activities under both the federal Greenhouse Gas Offset System and Clean Fuel Standard.”

Building resilience into Canada’s food system through a $3 million investment is another ask of CFA. They propose the dollars be used to reduce job vacancies “through career promotion, improve skills training opportunities for workers, support human resource management training/certification, and support commercialization of labour-saving technologies.”

The CFA is also requesting the federal government reinforce a $50 million fund targeted at reducing food waste.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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U.S. President Donald Trump’s Environmental Protection Agency (EPA) is requesting comment on the potential general waiver for the 2019 and 2020 compliance years and also is proposing a new rule that would remove or alter the labeling for retail gasoline that contains higher ethanol blends, according to notices to be published to the Federal Register on Tuesday.

The proposal for a general waiver could open the door to a contentious debate between the oil and biofuel industries just as Trump leaves the White House.

It is unclear whether the next EPA under President-elect Joe Biden, who takes the oath of office next Wednesday, similarly would consider the requests for a general waiver, as the comment period on the requests ends after Trump will have already left office. Both the EPA and Biden’s transition team did not respond to requests for comment by the time of publication.

While the waiver would save the refining industry money at a time of low fuel demand, biofuels advocates harshly oppose the idea, arguing it risks hurting farmers by undermining demand for products such as corn-based ethanol.

In its notice, the EPA said that it had received requests for a general waiver from both refineries and from the governors of several states hosting them.

“These petitions argue that recent events warrant EPA exercising its general waiver authority on the basis of severe economic harm,” it said.

Biofuel groups criticized EPA’s decision to consider the petitions.

“It cannot succeed because EPA has no authority to waive RFS (Renewable Fuel Standard) volumes unless the petitioners show that the RFS itself is the cause of the ‘severe economic harm’ to a state, region, or the nation,” said Renewable Fuels Association president Geoff Cooper.

The biofuel industry, however, supports a labeling change for high ethanol blends of gasoline because it believes current labels that warn of potential engine complications from ethanol can discourage consumption.

Oil industry groups vowed to challenge that proposal.

“We are deeply concerned about the administration’s reckless proposal to deprive consumers of basic information concerning their engine’s compatibility with fuels they purchase,” said a statement from groups including the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers.

Under U.S. law, refiners have to blend billions of gallons of biofuels into their fuel mix or buy tradable credits from those that do. Those credits traded on Friday at 84 U.S. cents each, down from 90 the previous session, traders said.

Earlier this week, the EPA signaled it would not act on a slew of pending individual waiver requests submitted by refining facilities because of pending litigation.

In the same document, the agency said it was also proposing to further extend the deadlines for oil refiners to prove compliance with the RFS for both the 2019 and 2020 years.

The EPA’s moves this week follow a year of suppressed demand and weak margins for oil refiners and ethanol producers because of the COVID-19 pandemic.

— Stephanie Kelly reports on the U.S. energy and biofuel sectors for Reuters from New York.

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Under federal law, the EPA must finalize its decision on the annual biofuel blending volume requirements it imposes on the refining industry for the next year by Nov. 30. The agency did not respond to requests for comment.

“At this point, it likely makes more sense to let the new administration handle the 2021 RVO (renewable volume obligations) rulemaking process entirely,” said Geoff Cooper, the president of the Renewable Fuels Association, one of the nation’s biggest biofuel industry groups.

Growth Energy, another U.S. biofuel industry association, said it intends to file a lawsuit to force the Trump administration’s EPA to act “immediately.”

The American Fuel and Petrochemical Manufacturers, a top refinery industry association, said it hoped the EPA will “soon provide certainty” to its members.

Under the U.S. Renewable Fuel Standard, refiners must blend billions of gallons of ethanol and other biofuels into their fuel pool, or buy credits from those that do — a policy that has created a huge market for corn-based ethanol but which the oil industry loathes.

While the Trump administration has mainly hit its deadlines for setting specific biofuel volumes mandates under the RFS, the process this year has been complicated by the economic fallout of the coronavirus pandemic.

Slumping fuel consumption has led refiners to argue for lower volume mandates to match demand, and biofuels producers to argue that doing so would only hurt them more.

The EPA has also left unaddressed a number of other questions that will likely need to be dealt with by the incoming Biden administration, including requests from oil industry advocates for the EPA to ease 2020 compliance because of the impact of the pandemic, and requests from the biofuel industry for the agency to ditch a waiver program it argued has illegally eroded demand for ethanol.

The oil industry says that the waivers hurt ethanol demand.

— Stephanie Kelly reports on the U.S. energy and biofuel sectors for Reuters from New York.

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BMO announced the new team approach Oct. 14, describing it as “a national team of agriculture banking specialists — team members with backgrounds in agriculture combined with technical finance expertise — with a deep understanding of local market challenges and opportunities.”

The ag-specialized team, BMO said, will “provide end-to-end support for agriculture and agribusiness clients across the country” and is “well positioned to provide comprehensive solutions for all types and scale of operation, including the bank’s digital and treasury payment capabilities.”

These offerings, BMO said, “have been built specifically for the agriculture sector to help clients obtain the banking they need, quickly and conveniently.”

BMO hears “time and again that our agriculture customers want to work with professionals and experts in their field who know their business,” Lynda Taylor, senior vice-president and national head, agriculture and agribusiness for BMO, said via email last week.

“The difference now is that their banker is solely focused on agriculture and agriculture clients,” she said, adding the team will also have its own analysts and credit managers so as to “align knowledge, experience and passion for the agriculture industry.”

The team’s leadership includes Taylor along with Ashley Salazar as national director of credit structuring, the latter being responsible for “managing the strategic direction and risk of the overall agricultural banking group.”

The national team approach, Taylor said, “is about us coming together to work as one team and sharing knowledge and experience.” That said, she added that BMO “has always been local and we will continue to be; no one knows agriculture better than the people living in the community who understand the sectors.”

Canada’s agriculture industry, BMO said in its release, is “evolving, with continual advancements in efficiency and sustainability influenced by changing market dynamics and the ongoing effects of COVID-19.”

Looking at the ag industry, Taylor said, “we find ourselves at somewhat of an inflection point. We are seeing a lot of advancements in the industry and now, with COVID, it’s worked to accelerate some of these changes.”

“Over the past two decades, productivity in the agriculture sector has increased five times faster than in the Canadian economy as a whole – and that trend shows little sign of letting up,” Aaron Goertzen, senior economist for BMO Capital Markets, said in the bank’s release.

Given the importance of the agrifood industry in Canada’s economy, accounting for over four per cent of last year’s gross domestic product, Taylor said BMO “recognize(s) an opportunity to invest more in agriculture experts and bring teams within the bank together to support this industry more effectively.”

The new ag group will also work with BMO’s retail, wealth, and capital markets operations “to support businesses in this segment with a full range of wealth and banking products and services,” the bank said. — Glacier FarmMedia Network

The post BMO regroups ag banking business appeared first on Country Guide.

The company seeks to enroll about 1,200 row crop growers in its Bayer Carbon Initiative in the first season, scale up in upcoming seasons, and ultimately expand to other countries, company executives said.

In Brazil, Bayer expects to invest five million euros (C$7.76 million) via the program over three years, the company said in a separate statement in Portuguese. Executives declined to disclose the overall program cost in both countries.

A Bayer representative said via email the pilot “will help inform us on how we can take this program forward in other parts of the world — including Canada.”

The program is the latest in a string of recent environmentally focused initiatives by agriculture companies, which have been criticized for using harmful chemicals and not doing enough to stop deforestation in Brazil.

Global commodities trader Cargill kicked off a project this spring targeting greenhouse gas emissions and fertilizer runoff in Iowa, while agricultural co-operative Land O’Lakes last week announced a multi-year partnership with Microsoft to tackle sustainability and technology goals in the food system.

The announcements came after the U.S. Treasury Department in May clarified a federal tax credit designed to spur investment in carbon capture and sequestration projects.

Bayer’s program requires that farmers enroll in its Climate FieldView digital farming platform, where growers would log data about their eco-friendly farming practices such as no-till farming or planting cover crops. Those claims could then be verified by satellite imagery.

Bayer would compensate growers for sequestering carbon and pay them in cash or credits to buy products on its Bayer Plus rewards platform.

“If farmers are sequestering carbon to the benefit of society and the planet, they should to be rewarded for it,” Brett Begemann, chief operating officer of Bayer’s Crop Science division, told Reuters.

In Brazil, the company selected roughly 500 farmers in 14 states to participate, starting in the 2020-21 crop season with about 60,000 hectares of mainly soy and corn farms.

Begemann said the value of the carbon sequestered would be dictated by the market.

“At the end of the day, we have to have a clear line of sight that this has to contribute to Bayer’s bottom line and benefit our share owners as well.”

— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gabriel Araujo in Sao Paulo. Includes files from Glacier FarmMedia Network staff.

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Demand for the four-tranche bond sale, whose proceeds will include the litigation payments, exceeded 17.5 billion euros, nearly three times the six billion euros (C$9.15 billion) Bayer will raise, according to a lead manager update seen by Reuters.

After more than a year of talks, Bayer agreed to pay as much as US$10.9 billion last week to settle nearly 100,000 U.S. lawsuits to end legal disputes it inherited with its US$63 billion takeover of Monsanto in 2018.

“Strong appetite (for the bond) seems driven by the fact that uncertainty surrounding the Roundup litigation has now been removed,” said ABN AMRO strategist Shanawaz Bhimji.

The settlement has propped up Bayer’s credit outlook, with Fitch Ratings and Moody’s revising their negative outlooks from three-notches above junk territory to stable on Monday.

Bayer will raise the total amount via four-year, 6.5, 9.5 and 12-year bonds, each set to raise 1.5 billion euros when the deal prices later on Wednesday, according to the lead manager.

— Reporting for Reuters by Yoruk Bahceli.

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