As economic pressure weighs on agriculture, Sam Miller, Principal for Fox Street Advisors, says the key is preparation.
“Every downturn brings uncertainty,” Miller shared, “and right now, that’s the biggest similarity to past ag challenges.”
Miller has seen recessions before—during the 1980s, the 2008 financial crisis, and COVID-19. However, he says today’s situation is unique. “What’s different this time is that prices are down, but input costs haven’t followed,” he explained. “That makes margins especially tight.”
Another factor making this cycle different: tariffs. “They’re broader now. It’s not just one country or sector,” Miller said. “And the goal is less clear.”
Despite these pressures, he says the fundamentals remain the same. “Know your cash flow. Understand your liquidity. Build a strong balance sheet,” Miller emphasized. “Risk management should always be part of your plan.”
He stressed that conversations with lenders should start early. “Have them as soon as possible,” he advised. “Lay out the facts and work together to find solutions.”
Miller doesn’t believe the U.S. is in a recession, but he says parts of agriculture—especially the grain sector—are struggling. “Grain prices have dropped, but expenses haven’t. That’s a major shift from previous downturns,” he noted.
Operating loans are also becoming harder to secure. “Some tough conversations started last year,” he said. “That’s why liquidity is so important right now.”
When asked about smart financial practices, Miller urged farmers to track both expenses and returns. “It’s not what you get paid,” he said. “It’s what you end up with that matters.”
Currency rates are another trend he’s watching. “A weaker dollar can help exports, but tariffs can wipe that out,” Miller explained. He’s also keeping an eye on 10-year treasury rates. “They’ve swung a lot lately. That tells me the market’s unsure about the future.”
While lending standards feel tighter, Miller says they haven’t changed. “It’s the financial health of the borrower that changes,” he clarified. “If you’re not meeting the standard, it can feel like it moved.”
His bottom-line advice: be ready. “Have options. Build financial flexibility,” Miller said. “Uncertainty is part of the business—but preparation can make all the difference.”
