Federal Agricultural Mortgage Corporation · NYSE:AGM

Federal Agricultural Mortgage — Farmer Mac Webinar (January 2017)

11 slides from Federal Agricultural Mortgage's conference presentation, Jan 23, 2017

  1. Slide 1: Connecting the Dots

    Farmer Mac Webinar 1/23/17 CONNECTING THE DOTS Dr. David M. Kohl Professor Emeritus, Agricultural and Applied Economics Virginia Tech, Blacksburg, VA (540) 961-2094 (Alicia Morris) | (540) 719-0752 (Angela Meadows) | [email protected] Macro Clinic Video Blog: http://agstar.com/edge/ Road Warrior of Ag

  2. Slide 2: Game of Economic Reset

    Farmer Mac Webinar 1/23/17 State of the State of Agricultural Economics Reset: The Mid Innings  emerging nations, BRICS & KIMT, slow growth, one half in recession  ethanol & oil’s impact on commodity prices  Central Banks - U.S. & abroad  duration of the strong dollar  weather: supply & demand

  3. Slide 3: Global Economics: Europe and China

    Farmer Mac Webinar 1/23/17 Global Economics: Europe  Brexit  immigration issues  next year’s elections  break up of euro  other 5 Global Economics: China  TPP: China’s role  water, soil, & air issues  asset bubbles:  stock  real estate  other  military buildup  South China Sea 6 3

  4. Slide 4: Global Economics: Japan, Russia, Brazil & Others

    Farmer Mac Webinar 1/23/17 Global Economics: Japan  leader in support of TPP  aging population  Central Bank’s stimulus  military  shrinking economy 7 Global Economics: Russia, Brazil & Others  Oceania  political disconnect  economic challenges  currency valuation  weather  other 8 4

  5. Slide 5: New Administration; Federal Reserve's Interest Rate Barometer

    Farmer Mac Webinar 1/23/17 New Administration  international trade  banking regulations  health care  immigration  taxation  trillion dollar infrastructure spending 9 Federal Reserve’s Interest Rate Barometer • three increases in 2017! Indicator Current Status Unemployment 4.7% GDP Growth 3.5%

  6. Slide 6: State of the U.S. Economy; Net Farm Income, 2015

    Farmer Mac Webinar 1/23/17 State of the U.S. Economy  90 months of expansion  106/120 months  coastal vs. fly over states  republicans/recession  velocity of money  stock market 11 Net Farm Income, 2015 12 6

  7. Slide 7: Market Buckets in Ag Lending; Crossroads Exit Ramp

    Farmer Mac Webinar 1/23/17 Market Buckets in Ag Lending  refinance select  refinance de-market  opportunities for growth, transition & phase out  young and/or beginning producers  young producer retention 13 Crossroads Exit Ramp Exit Ramp Questions: Yes No 1. Hidden and/or increase in open acco

  8. Slide 8: Sixth C Question Checklist; The Burn Rate – Working Capital

    Farmer Mac Webinar 1/23/17 Sixth C Question Checklist Question Vulnerable Resilience & Growth NO YES Do you know cost of production? Do you know cost of production by enterprise? Do you have modest family living expenses? Have you shed non-productive or non-economical assets? Do you have a written i

  9. Slide 9: Burn Rate – Debt Service and Core Equity

    Farmer Mac Webinar 1/23/17 The Burn Rate – Debt Service Payments Revenue $2,000,000 Current Assets $1,000,000 Expenses 1,800,000 Current Liabilities 500,000 Profit $200,000 Net Working Capital $500,000 Debt Service Payments = $100,000 Net Working Capital $500,000= 5.0 Years Debt Service Payments $10

  10. Slide 10: Burn Rate on Core Equity; Better Borrower/Business

    Farmer Mac Webinar 1/23/17 Burn Rate on Core Equity (Assume $150,000 Earnings Loss & 20% land value decline) Assets- Market Estimated Loan Collateral Remaining Equity Value Value Maximum Position Principal Excess Reserves 1. Long Term $2,000,000 X 70% = $1,400,000 - $700,000 = $700,000 (20% Decline

  11. Slide 11: Five Parting Views From the Road

    Farmer Mac Webinar 1/23/17 Five Parting Views From the Road  variance analysis- projected vs. actual  one page corrective action plan from borrower  focus on personal living budget and credit cards  watch technology & lender liability  know personalities- victims & know it all’s 21 11

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