Tag Archives: Money

Agricultural and heavy equipment makers are in for a rough year as the virus pandemic delivers a sting to an industry trying to recover form a trade war.

Jefferies analyst Stephen Volkmann slashed his earnings forecast for Caterpillar and Deere because of a series of abrupt production closures and the broader economic shutdown. Both companies have already yanked their financial forecasts for the year.

Volkmann now expects a profit of $5.75 per share for Caterpillar, down from $9.50 per share. He also cut his forecast for Deere’s profit to $6 per share from $10 per share.

A slump in spending from the mining and construction industries could be particularly painful for Caterpillar. Deere has been especially hurt as farmers spend less on new equipment because of lower crop prices.

Shares of Deere and Caterpillar both managed gain 16% in 2019, despite the uncertainty from the trade war. Deere has already lost 21% and Caterpillar is down 27% in 2020. Both shares are up sharply amid a broad market rally Thursday.

Volkmann said the industries should start to improve in the third and fourth quarters, before growing in 2021.

Two farm-state Senators want the Department of Agriculture to change a rule in the Packers and Stockyards Act. Senate Republican Chuck Grassley of Iowa and Senate Democrat Jon Tester of Montana recently sent a letter to Agriculture Secretary Sonny Perdue requesting USDA “clarify an ambiguous proposed rule regarding the undue and reasonable preferences provision of the Packers and Stockyards Act.”

Grassley and Tester are urging USDA to ensure the new rule protects small livestock and poultry farmers from unreasonable practices of packers and poultry companies. In their letter, they outlined specific changes to address this proposed rule. The Senators say the current rule, “not only fails to address many of these abusive and unreasonable industry practices, but it actively establishes criteria insulating packers and poultry companies from scrutiny.”

The rule also appears to provide legal protection for packers who are able to justify a practice based on the need to save costs and reduce prices, or if their practices are deemed “customary” in the industry because they align with those of their competitors.

McLEAN, Va. — The Farm Credit Administration is encouraging Farm Credit System (System) institutions to work with System borrowers whose operations have been affected by COVID-19 and the measures taken to prevent its spread.

The coronavirus is creating extensive disruptions to the economy and American life, and governments, businesses, and the public are taking actions to minimize and mitigate risks. We recognize the pandemic may also create significant stress for System borrowers because of disruptions to employees, markets, transportation, and other factors important to their operations.

“FCA regulations and the solid financial position of System institutions give the institutions considerable flexibility to provide relief to borrowers affected by COVID-19,” says Glen R. Smith, FCA board chairman and CEO. “We encourage institutions to use this flexibility to work with borrowers to lessen any stress and financial burden related to the disease and efforts to contain it.”

System institutions can help alleviate stress for borrowers affected by COVID-19 in several ways:

  • Extending the terms of loan repayments
  • Restructuring borrowers’ debt obligations
  • Easing some loan documentation or credit-extension terms for new loans to certain borrowers

In addition to affecting System borrowers, the virus may also create challenges for System employees and institutions. These challenges may impair the institutions’ ability to comply in a timely way with regulatory or reporting requirements. FCA may be able to grant temporary relief in some circumstances that would alleviate these challenges without weakening safety and soundness.

FCA encourages any System institution that needs temporary relief from these requirements to contact David Grahn, director of the agency’s Office of Regulatory Policy, at 703-883-4145.

FCA’s board policy statement PS-71, Disaster Relief Efforts by Farm Credit System Institutions, provides additional information that may help System institutions respond to the impacts of the virus on their operations.

To learn more about COVID-19, please consult the website of the Centers for Disease Control and Prevention.

During these challenging times, we wish the best for System staff and borrowers.

LINCOLN, NEB. – March 14, 2020 –The Nebraska Bankers Association (NBA) is working closely with its 171 member banks across the state in proactively addressing the current Coronavirus (COVID-19) pandemic.

 

 

As the COVID-19 situation evolves, Nebraska banks are taking aggressive steps to safeguard the health and safety of their customers, staff and communities while ensuring the delivery of important financial services such as money and credit availability.  With approximately $64 billion in deposits and strong capital levels, Nebraska banks remain financially solid and stand ready to provide important financial services to our fellow Nebraskans. Nebraska banks will look to deliver a larger number of products and services through their enhanced mobile and digital channels.

 

 

Federal and state regulation requires financial institutions to have continuity plans and testing processes in place which address pandemic response scenarios.  While each individual bank’s plan may differ slightly, a growing number of Nebraska banks are implementing the following changes to minimize person-to-person contact and to encourage responsible social distancing:

 

 

  • Banks are highly encouraging customers to utilize drive-thru, digital and ATM channels for transactional services.
    • Numerous Nebraska banks will be closing or limiting lobby access to walk-in traffic beginning on Monday, March 16, 2020.
  • Banks are asking customers who desire personal or specific banker services to set up office appointments in advance of their visit.
  • Banks are enhancing cleaning and sanitary practices to help mitigate the potential spread of the virus.
  • Banks are implementing travel restrictions for their staff members.
  • Many non-essential, non-customer-facing bank employees are being asked to work from home until further notice.
  • Customers facing financial hardships as a result of COVID-19 should contact their bank to discuss their individual situation.
  • The United States maintains a world-class payments system.  As such, customers are encouraged to take advantage of their debit and credit cards when making purchases.
  • Customers are encouraged to check the financial institution’s web site for updates as the situation evolves.

 

In reviewing the changes being implemented by NBA member banks, NBA Board Chairman Alan Emshoff (CEO of Generations Bank, Exeter) commented, “Nebraska banks are the cornerstone of their communities. Providing safe and reliable service is a key priority for every one of our member institutions, especially in challenging times.  I am especially proud of the steps our members are taking to protect the health and safety of our fellow Nebraskans while continuing the professional delivery of banking services.”

 

 

“Nebraska’s banks are open for business,” said Governor Pete Ricketts.  “Like all other employers, banks are taking common sense steps to keep people healthy. Our financial system is strong, and business as usual continues in communities across the state.”

 

 

In addition, the NBA is working closely, and routinely communicating with, state and federal bank regulatory agencies and Nebraska elected officials to ensure the efficient and effective delivery of banking services and access to liquidity.