After a week of classes at the Graduate School of Banking at Colorado, a participant approached me and remarked that much of the content of my presentations was pessimistic and even gloomy. He wondered if there was any good news in agriculture today. Well, there absolutely is a bright side for both producers and lenders, which as the young lender points out is important to explore.

To begin, many lenders are experiencing an economic downturn for the first time. Several new lenders entered the industry during the recent decade-long commodity super cycle. Today, some of those lenders have exited the industry while others continue to adjust business strategies to accommodate less profitable times. It is important to remember that for many producers and lenders, these new and difficult times will require collaboration and counsel.

While perhaps not rapidly enough, fixed and variable costs are declining. Fertilizer and transportation costs are down as much is 40 percent in many areas. For livestock operations, feed costs are entering a range that should increase profit potential.

As a result of the economic reset, land and asset turnover continues to increase. In good economic times, available land at a reasonable rate can be extremely hard to acquire. Today, however, land turnover may create additional opportunity to purchase or rent land, and in some areas, at a discount. Especially for crop and grassland farms, cash rents are declining. This decline may be an expansion opportunity for some.

For agricultural lending, the current economic environment highlights the importance of the producer-lender working relationship, not just interest rates. In the 1980s, lenders built their best and most loyal customer base and portfolio in the downturn. Progressive producers look for educated views and innovative ways to improve management, production and profit. This elevates the importance of continued education for both lenders and producers.

Another positive factor today is interest rates. Previous economic downturns included at least an 18 percent interest rate. Today’s low interest rates improve a producer’s ability to service debt and also support land values.

For most, change is hard. In the past, if you put the seeds in the ground and fed the livestock, you made at least some money. In today’s environment, a business must proactively seek the positives and map a strategy to take advantage of them. A well-managed business with modest growth expectations has much opportunity right now. As the young lender in Colorado reminds us, sometimes a perspective change or even an attitude adjustment is the most useful tool for producers and lenders alike. Remember not to get caught up in the the negative noise of mainstream and social media. Even when some professors may paint a gloomy picture, there are always positives and opportunities for those that seek them.