Agricultural credit early warning that flags the farms needing a call this week, not at renewal
Stressed borrowers found months before renewal, not at it.
See one case, screen by screen ↓Software that watches an ag loan book between renewals and flags the borrowers whose credit is weakening. Agricultural Credit Early Warning joins the weekly drought map, commodity prices, line, deposit and payment behaviour, interim financials and crop insurance notices for every farm, re-scores the book every Thursday, and drafts the watch-list review for the farms that need one.
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The drought map changes every Thursday, futures settle every day, and every borrower’s line, deposits and payments move every week. The credit file moves once a year. Most operating lines are re-underwritten in the weeks before planting — by then the drought, the herd sale or the failed crop is months old and the working capital is spent.
The signals already exist, in five places: the Drought Monitor, futures and cash prices, the core system’s line, deposit and payment data, the borrower’s interim financials, and crop insurance and government payment notices. Nobody joins them per farm, every week. And with renewals and extensions running high, the same small credit team cannot re-review 1,184 files by hand — so cattle proceeds get spent instead of applied, an indemnity is paid without the bank’s assignment, and carryover rolls into next year’s line.
Estimated split for one watch-list review on a farm borrower, by hand and with the solution.
Six specialist agents put every farm on the weekly drought map and check insurance, prices and payments before they flag it; the Ag Lending Manager decides.
Willowmere State Bank lends to 1,184 farms in 32 counties of Nebraska and Kansas. On Thursday 8 October the drought map moved again. Here is what happens next, screen by screen, in the working solution.
Ruth opens the book map: every farm a dot in its county, coloured by its early warning score, over the Drought Monitor map of 8 October. Perkins County has been in D3 extreme for 11 weeks. Under the map sit the three counts that matter: 27 alerts, 9 of them high; 38 on the watch list, $96.4M; $286M in D2 or worse, up $20M on the week.
Thursday’s scan: 6 agents · 1,184 borrowers · 4,318 parcels · 8 Oct 10:00–10:41.
Ruth replays Thursday’s scan. D3 reaches Rawlins, Decatur and Norton counties, and drought alone pushes 12 farms there into watch range. The agents then check each one against crop insurance, prices, payments and line use. Nine settle back. Three stay: Sutter Creek Farms (premium $18,400 unpaid, deposits −44%), Rasmussen Land Co. ($88,000 wheat claim with no assignment to the bank) and Wagoner Farms (2 overdrafts in September, line 79%).
“9 cleared — insured and paying on time · 3 need a call: Sutter Creek 67 · Rasmussen 53 · Wagoner 49”
Herl Wheat Farms, Rawlins County, scored 54 on drought alone. With insurance, prices and payments it scores 24: drought +30 and wheat under its $5.92 median breakeven +4, but Revenue Protection at 80% assigned to the bank −20, and 12 of 12 payments on time with the line at 49% −14. No alert is raised; the agents keep watching every week.
“Cleared: Revenue Protection at 80% covers the wheat; line 49% drawn against a 52% norm; every payment on time.”
The map has three layers: drought with a 14-week slider, the yield outlook against the 5-year average, and the price move of each county’s main commodity. In Hitchcock County the outlook for pasture and hay is −42%; the county rail lists its farms most exposed, each with crop mix, insurance, the last 12 payments and line use.
The alert feed ranks 27 borrowers by score: $75.0M of exposure on alert, 15 waiting for Ruth, 25 farms renewing within six months. At the top is Voss Land & Cattle LLC, Perkins County, cow-calf: score 81, up 9 — D3 drought 11 weeks, 212 bred cows sold, line 96% drawn. Officer Cody Harms; the line renews 1 March, 140 days away.
Voss is rated 4, Acceptable, since renewal in March, with $5,124,000 outstanding on four loans. The score shows why: $356,160 of sale-barn proceeds deposited 1 October for 212 bred cows, with the $868,000 cattle note unchanged (+18); the line at 96% against a five-year October norm of 55% (+15); working capital down from $612,000 to $188,400 on the 30 June balance sheet (+13). Weighing against it: the $214,000 wheat claim is assigned to the bank (−6), and calf prices are strong (−4).
Each signal names what it rests on: “Sale settlement · 1 Oct”, “Balance sheet · 30 Jun”, “Drought Monitor · 8 Oct”.
Ruth presses one button. The agents map 7 parcels to the 8 October map, price 418 calves and the corn against the farm’s $4.38 breakeven, read 14 months of accounts, read the 30 June balance sheet and the wheat claim, and re-project 2026: term debt coverage 0.86x against 1.31x in 2025, on $498,000 of scheduled term payments.
“Watch-list review drafter drafted the review — rating 4 → 6 special mention · 6 actions · talking points for Cody Harms”
Summary, repayment capacity, collateral, what weighs against it and a recommendation — every figure linked to its source. Available for term debt falls from $652,400 to $428,280. The herd on the cattle note is down to 428 head, so cattle loan to value rises from 85% to 121%; real estate loan to value is 41%, from 43%. The action plan has six steps with owners and dates, from counting the herd by 23 October to applying future cattle proceeds to the note under the security agreement.
The draft says what it did not check: “Land value from the 2026 appraisal; not re-checked by this review.”
Ruth can return the review to Cody or approve. She approves rating 6 and the watch-list addition, and signs: her name and role and the meaning — “Approved as reviewed” — recorded together. The watch list goes from 38 farms to 39, $101.5M, and the committee chaired by Douglas Fenn sees Voss on Tuesday 20 October.
Exposure by commodity sits against each concentration limit and drought category: cow-calf has $97M, 49%, in D2 or worse; dryland wheat and row crops $88M, 62%. On the stress test, December corn down another 10% re-projects every farm’s cash flow: 110 farms below 1.0x term debt coverage, 14 more than today, with $61.2M more exposure. The result goes to the Chief Credit Officer.
“Each farm’s own cash flow is re-projected; ratings are not changed.”
The same week, seen by four people at the bank — what it looked like before, and what it looks like now.
Six specialist agents put every farm on the weekly drought map and check insurance, prices and payments before they flag it; the Ag Lending Manager decides.
Maps every borrower’s acres and pastures — from mortgage legal descriptions, pasture leases and acreage reports — to the weekly Drought Monitor map and rainfall, and records the weeks at D2 or worse for pasture, dryland and irrigated acres.
Prices each operation’s commodities against its own breakeven from the last cash flow, after every close, and records how many weeks it has been below.
Watches line use, deposits, overdrafts, past dues and unusual payments against the farm’s own seasonal pattern; matches sale-barn and packer deposits to cattle notes and spots hay and feed payments.
Reads interim balance sheets, Schedule F, crop insurance notices of loss and assignments, and FSA program payments; recomputes working capital, current ratio and term debt coverage, and re-projects the year.
Applies the weights in Settings to each borrower’s signals and mitigants, raises an alert when the score crosses a level or rises 8 points in a week, and ranks the alerts.
Drafts the watch-list review — what changed, repayment capacity, collateral, what weighs against it, a proposed rating and an action plan with owners and dates — and the officer’s talking points.
Approves or dismisses; the CCO's committee confirms. The agents propose; a named person decides.
The lending team can ask in plain words — about a borrower, a county, a signal or a price scenario — and every answer points to its source.
Why is Voss Land & Cattle scored 81?
Seven signals add up to 91 and two mitigants take off 10: D3 extreme drought for 11 weeks (+20), 212 bred cows sold with the cattle note not paid down (+18), line 96% drawn against a 55% October norm (+15), working capital $188,400, was $612,000 (+13), and deposits −41%, hay $148,600 and 3 overdrafts (+25). The assigned wheat claim and strong calf prices take off 10. The line renews on 1 March, so there are 140 days to act.
Which other cow-calf borrowers in extreme drought sold cattle?
Three more, all in D3 counties and all on a cattle note: Kellerman Ranch, Keith, 140 head, $221,300; Ochsner Red Angus, Dundy, 96 head, $162,400; Two Forks Cattle Co., Hitchcock, 58 head, $97,400. None of the proceeds reached the cattle notes. I have added the three to the call list for Kara Nyquist and Jenna Wolfe.
Which farms in the new extreme-drought counties need a call?
Drought alone moved 12 farms in Rawlins, Decatur and Norton into watch range. Checked against crop insurance, prices, payments and line use, 9 cleared and 3 need a call: Sutter Creek Farms (premium unpaid, deposits −44%), Rasmussen Land Co. ($88,000 claim, no assignment) and Wagoner Farms (2 overdrafts, line 79%).
What if December corn falls another 10%?
At $3.65, another 14 farms would fall below 1.0x term debt coverage on their 2026 re-projections, with $61.2 million of exposure — mostly irrigated corn in Phelps, Kearney, Hamilton and Buffalo. No rating changes; I have set the scenario on the stress test so you can send it to Douglas Fenn.
13 screens from the working solution, on its sample data. Pick one to see it large.
The signals every borrower is watched for, the alert levels and who decides are settings — changed in plain words, versioned and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| Weekly scan | Thursdays 10:00 CT | Thursdays 10:00 CT · Thursdays 13:00 CT · Fridays 07:00 CT |
| Prices | Daily after the close | Daily after the close · Twice a week · Weekly with the scan |
| Drought on pasture or dryland acres, for 4 weeks | D2 severe or worse | D1 moderate or worse · D2 severe or worse · D3 extreme or worse |
| Deposit decline, year on year | 30% or more | 20% · 30% · 40% or more |
| Overdrafts in any 30 days | 2 or more | 1 · 2 · 3 or more |
| Cattle sold against the herd on the cattle note | More than 10% of the herd | More than 5% · 10% · 20% of the herd |
| Interim financials overdue | 60 days | 30 · 60 · 90 days |
| Watch-list committee | Third Tuesday of the month | Third Tuesday · First Monday of the month · Every two weeks |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample ag book · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (Federal Reserve Bank of Chicago AgLetter, Seventh District — 5.6% of farm loans with major or severe repayment problems, Q4 2025; renewals and extensions index 136, Q1 2026). Drought categories follow the U.S. Drought Monitor. People, farms and the bank named on this page are fictional — characters and sample data in the working solution.
Software that watches an ag loan book between renewals and flags the borrowers whose credit is weakening. Agricultural Credit Early Warning joins the weekly drought map, commodity prices, line, deposit and payment behaviour, interim financials and crop insurance notices for every farm, re-scores the book every Thursday, and drafts the watch-list review for the farms that need one.
No. Drought raises a farm’s score, but the agents check it against crop insurance, prices against the farm’s own breakeven, payments and line use before it stays flagged. In the working solution, new extreme drought pushed 12 farms into watch range; 9 cleared and 3 needed a call.
Every alert lists its signals and mitigants with the points each adds or takes off, and the source it rests on — the Drought Monitor map date, a sale settlement, a balance sheet, a notice of loss. Line use and deposits are compared with the farm’s own pattern over the last five years, not a book average.
No. The agents score, explain and draft. The Ag Lending Manager approves ratings 5 and 6 and watch-list additions; ratings 7 and worse go to the Chief Credit Officer; the loan officer makes the call. Agents never contact a borrower, block an account or add anyone to the watch list.
What changed, repayment capacity with the year re-projected at today’s prices and herd, collateral and loan to value, what weighs against it, a proposed rating and an action plan with owners and dates, plus talking points for the officer. Every figure links to its source, and the reviewer can return it to the officer or approve it.
Yes. Exposure is shown by commodity and drought category against your concentration limits, and the stress test re-projects each borrower’s own cash flow for a corn or cattle price drop or a drought spreading one county east. Ratings are not changed by a scenario.
Yes. The scan schedule, the drought category and duration, line use above the seasonal norm, deposit decline, overdrafts, cattle sold, overdue financials, alert levels, approvers and the committee date are all settings, versioned and on the audit trail.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your credit policy, rating definitions, watch-list procedure and a sample of your farm borrowers — and it goes live once every quality gate has passed. We will walk you through it on your own book first.
We’ll run Agricultural Credit Early Warning on a sample of your own farm borrowers and this week’s drought map.