“Adversity creates opportunity.” That is Terry Engelken’s motto. These days, he sees plenty of adversity surrounding his Midwest community and across the nation. His experience as a longtime lender makes him optimistic that today’s challenges will be tomorrow’s opportunities. It just might take a while longer than “tomorrow” for that opportunity to arrive.
Engelken is Vice President of Washington State Bank in Washington. His community of about 7,500 people is dependent on agriculture. Hogs outnumber people.
“Oh, yeah,” Engelken laughs.
By a lot.
Engelken feels like the people relying on hogs for their livelihoods are having a better time of it right now, but it is still a struggle.
“The hog producers are kind of starting to recover from the last two years that were very disappointing financially for them,” Engelken told American Farmland Owner from his office at the bank, which also has branches in three others Iowa towns: Columbus Junction, Pella, and Fairfield.
Data from USDA show that hog prices are still short of their 2022 high but are higher than where they fell in the early months of 2024.
“They (hog producers) are starting to come out of that a little bit with better hog prices and lower grain costs.”
RELATED: Terry Engelken joined other community leaders in Washington, Iowa, who focused on making sure younger residents learn financial literacy skills, a vital skill to have for those thinking about a career in agriculture (or any career, of course).
Engelken has watched farmland values in the surrounding communities. And while they are not escalating in the same way that they were in recent years, he is noticing something that may surprise observers in different parts of the country. Some of the lowest quality land is seeing an increase in selling price.
And it is something that is different from his time in lending during the Farm Crisis in the 1980s.
“One of the areas that I look at as far as experience back going into the eighties was, we saw the poor porous production land dropped first in values,” Engelken said.
But he said that has not been the case recently. “We’re not seeing that quite as often right now, because there's a lot of demand for hunting grounds. That kind of holds up the the price on the very marginal ground superficially.”
However, he has noticed that medium quality land has not fared as well lately.
Engelken contributes his insights to the Rural Mainstreet Index, Creighton University’s ongoing project that surveys financial and lending leaders in smaller communities.
“Farmland Prices Expected to Fall 2.7% Over Next 12 Months,” read one of the headlines from the most recent survey.
Farmland prices overall declined for the sixth time in the past seven months, according to the Index. And farm equipment sales dropped for a 16th straight month as farmers delayed bigger purchases as their incomes have been squeezed.
But there are bright spots.
“Corn and soybean yields were excellent in our area,” was one of the observations that Engelken shared for the report.
Adequate rainfall helped to drive good yields. The bump in production aided producers in making up for commodity prices that remain less than ideal.
RELATED: Dr. Ernie Goss, a Creighton University economist, helps to lead the Rural Mainstreet Index. He told American Farmland Owner last month where he sees struggles in the agricultural economy. “Going in the wrong direction,” Goss explained about some of the trends.
Goss also wondered whether some of the higher tariffs that President-elect Donald Trump has been threatening could really be just a bluff to negotiate on behalf of the policy changes that he seeks. Watch that interview here.
Engelken knows that there will be continued challenges for community members connected to agriculture. But going back to his motto: “Adversity creates opportunity,” Engelken knows that solutions could be ahead.
“It might be a tough year, but hang in there,” he said. “Things will improve.”
One area that could bring improvement, he hopes, would be if the incoming Trump administration could find ways to lower energy costs.
“One of the areas that we have discussed here in the bank is that it doesn't appear that inputs are dropping, especially for crops, at this point in time,” Engelken said. “But if something can be done with the energy prices, that will eventually trickle down into lowering some of the input costs. That would be very helpful.”
A new Farm Bill would help, too, something that he has been saying for the past two years.
“I have not been happy with Washington.”
Washington, D.C., that is. He is just fine with Washington, Iowa.
