Young, Beginning and New Farmers Symposium resources panel

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11/18/2021 Added

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Financial resources panel discussion from the Young, Beginning and Small Farmer Symposium on Nov. 8, 2021

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[00:00:03.940]She is responsible for strategizing
[00:00:04.773]and coordinating impactful education,
[00:00:06.940]and valuable products to best serve young,
[00:00:07.773]beginning and small producers in Nebraska,
[00:00:08.606]Iowa, South Dakota, Wyoming, and Eastern Kansas.
[00:00:19.900]Prior to her role, Brandy served in various sales
[00:00:20.777]and training positions at Farm Credit Services of America.
[00:00:26.363]Brandy and her family live in Northeast Nebraska.
[00:00:30.940]Where exactly? By Clarkson.
[00:00:33.121]By Clarkson, where they have a cow/calf operation.
[00:00:37.310]Welcome, Brandy. Thank you.
[00:00:39.037]Our second panelist is, Ben Herink.
[00:00:39.870]He's with FSA/USDA.
[00:00:47.667]Ben is a Farm Loan Specialist,
[00:00:48.500]for the USDA farm service agency
[00:00:49.333]in the Nebraska state office here in Lincoln.
[00:00:55.229]Ben has worked for FSA for 15 years,
[00:00:56.062]and during this time, served as the farm loan manager
[00:00:56.895]in Hastings for six years, and prior to that office.
[00:01:09.662]So, a couple of different places here in Nebraska.
[00:01:13.660]Ben grew up on a family farm just located southeast
[00:01:14.525]of Leigh, Nebraska in northern Colfax County.
[00:01:20.510]He graduated from the University of Nebraska
[00:01:21.343]here in Lincoln, majoring in Agribusiness.
[00:01:27.121]Ben, his wife Dusty, have three daughters,
[00:01:27.954]and they live in Lincoln.
[00:01:34.540]Our third panelist is Steve Cleveland.
[00:01:37.610]Steve is the senior vice president for Homestead Bank
[00:01:41.460]in Chadron, Nebraska.
[00:01:43.051]It's completely coincidental that the bankers
[00:01:43.884]are on this side with me, okay?
[00:01:52.170]A little bit of fun there, Glenn.
[00:01:54.300]Steve is the boots on the ground agricultural lender
[00:01:55.249]serving a very remote customer base.
[00:02:01.290]He understands the importance that beginning, young,
[00:02:05.020]and small scale farmers and ranchers play in keeping
[00:02:08.005]and enhancing the vitality of our rural communities.
[00:02:13.040]And then, finally, our fourth panelist is Tom Kelly.
[00:02:16.530]Tom is from Western Bank.
[00:02:18.530]Tom grew up in Sutherland where he currently lives.
[00:02:22.000]I think that's about as far as you can get before we move
[00:02:24.450]to mountain time. It's right there.
[00:02:25.553]I think that's right.
[00:02:27.070]He's involved in a fifth generation
[00:02:27.903]family ranching operation.
[00:02:31.037]He currently serves as vice president
[00:02:33.610]of Western Nebraska Bank and works at the Paxton branch.
[00:02:38.300]Tom graduated from the University of Nebraska Lincoln
[00:02:42.270]with a degree in agricultural economics.
[00:02:44.809]And so, as we've done previously,
[00:02:47.409]if you wouldn't mind sharing just a little bit more beyond
[00:02:51.340]what that short bio did.
[00:02:53.240]And then we'll jump in.
[00:02:54.073]Okay, yeah.
[00:02:56.330]Hello.
[00:02:57.163]Tom Kelly, Western Nebraska Bank.
[00:02:59.700]I've got a...
[00:03:00.630]I feel like I've got some unique thoughts that I can bring
[00:03:03.870]to this panel.
[00:03:04.703]I am directly involved with a family cow/calf operation,
[00:03:08.524]which is managed by my brother.
[00:03:10.484]And I've been in banking about seven years now.
[00:03:13.434]Western Nebraska Bank is an agbank,
[00:03:16.670]but we do also provide all other services and loan options.
[00:03:22.800]We, you know, so I'm based in Paxton.
[00:03:26.880]And there's about 600 people in that town,
[00:03:29.970]so we're always striving to gather new
[00:03:30.865]loan customers, deposit customers,
[00:03:31.698]and also retention is a very, very big thing out there.
[00:03:39.643]We spend a lot of time focusing
[00:03:42.630]on our customer service prospective, basically,
[00:03:46.590]just because we can't afford to lose anybody.
[00:03:48.923]And so we wanna keep every happy.
[00:03:50.960]And, you know,
[00:03:52.352]that includes aiming for and shooting for new
[00:03:55.880]and up-and-coming people involved in the ag business.
[00:04:00.230]Any venture, really, we'll take a look at.
[00:04:02.360]And we'd love to talk to you.
[00:04:03.216]I guess that's just a short bio edition.
[00:04:07.560]Thanks, Tom. My, excuse me.
[00:04:10.200]My name is Steve Cleveland.
[00:04:12.105]I'm senior vice president of Homestead Bank in Chadron.
[00:04:17.800]Paxton, the thing I like most about Paxton is, time-wise,
[00:04:22.330]when I pass Paxton going back home, I'm halfway home.
[00:04:27.263]And I thought you were gonna say Ole's, but...
[00:04:30.860]No, we're remote.
[00:04:34.796]Our customers primarily run cattle to harvest grass.
[00:04:40.730]The grass is turned into protein.
[00:04:42.447]We ship those cattle back to Joe over there,
[00:04:45.890]and he fattens them and puts a little flavor in them.
[00:04:48.720]And then they hit the marketplace.
[00:04:51.637]I've been at this for about 36 years.
[00:04:56.000]I was very lucky.
[00:04:56.872]I attended University of Nebraska when I was,
[00:05:01.091]I think, a junior.
[00:05:01.924]I had ag finance, and the class really was very easy for me.
[00:05:08.742]So I found my spot early in life, and I've,
[00:05:14.640]it's been extremely,
[00:05:16.920]I've been extremely blessed to be a banker.
[00:05:20.580]Those of you in here that are maybe aspiring
[00:05:22.960]to be an agricultural lender, go for it.
[00:05:26.670]Just, like, share a couple stories.
[00:05:28.229]You have an opportunity to impact lots and lots of people,
[00:05:32.840]and just this fall I was reminded of a couple that,
[00:05:37.758]customers, that told me how maybe our bank impacted them.
[00:05:43.810]One, kind of a chuckle, he was,
[00:05:46.850]I think he and his buddy were about 16 years of age.
[00:05:49.900]And the one (indistinct) kid had a fat cattle, and he said,
[00:05:54.067]"You remember when you loaned me the money?"
[00:05:56.110]You know, 16 years of age.
[00:05:57.208]Couldn't legally sign a loan document.
[00:05:59.830]I said, "What the heck?
[00:06:00.900]I'm gonna loan you the money."
[00:06:01.733]They came in about 180 days later to settle up,
[00:06:05.520]and I asked them how they did.
[00:06:06.810]And they said, "Well, they make 60 bucks a head."
[00:06:09.501]That was the worst thing that could've happened.
[00:06:12.733]Make money on your first turn of fat cattle, so he said,
[00:06:18.757]"Do you remember what you told me?"
[00:06:20.232]I said, "No."
[00:06:21.453]He said, I, he said,
[00:06:24.819]"You asked us what are we gonna do next."
[00:06:28.720]And he said, "Well, I'm gonna buy 100 head."
[00:06:31.370]And he said,
[00:06:32.203]"You told me to get out of my office,
[00:06:34.573]out of your office now."
[00:06:36.373]Get out of my office.
[00:06:38.060]But anyway, this impacted this young man.
[00:06:40.999]He, now he runs about 900 head of feeder cattle.
[00:06:46.527]That's about 500 cows, feeds about 300 head of cattle.
[00:06:51.169]And, you know,
[00:06:52.430]because of these relationships you build and you build
[00:06:55.127]and you build,
[00:06:56.053]you give somebody an opportunity that started out
[00:06:58.960]with 10 head of fat cattle.
[00:07:00.865]And you get the satisfaction of seeing them grow
[00:07:05.535]within your communities, so on and so forth.
[00:07:08.450]Now I had another customer this fall.
[00:07:11.400]I was out west when we were remote customer base,
[00:07:16.440]probably our average customers maybe within outside
[00:07:20.150]of 50 miles of Chadron.
[00:07:21.500]So we spent a lot of time on the road,
[00:07:23.140]so I see a fuel pump which I'm at quite often.
[00:07:25.607]On the other side of the fuel pump,
[00:07:27.226]I had a rancher that said,
[00:07:30.997]"Hey, Steve, I was thinking about you the other day."
[00:07:34.194]He said, "You know, I was, in the first few years
[00:07:38.350]of my operation, I had this little construction company,
[00:07:41.350]a little sideline that would help put money on the table
[00:07:45.860]so I could enter the cattle business."
[00:07:47.820]And he said, "You know, we needed to buy supplies and stuff.
[00:07:52.500]And you introduced me to a line of credit."
[00:07:55.980]And he said,
[00:07:56.813]"You know, I never really understood
[00:07:59.653]that you could use other people's money to make money.
[00:08:03.430]And, you know,
[00:08:04.263]it's just those little things that you take for granted,
[00:08:07.198]as being a community banker,
[00:08:09.238]you can help people understand that, hey, that's how,
[00:08:14.219]particularly, banking works.
[00:08:16.370]You take in deposits.
[00:08:18.210]You take those deposits.
[00:08:19.480]You loan them back out,
[00:08:20.527]and it helps your community grow, to grow.
[00:08:23.960]So just, with me,
[00:08:26.790]I wanted to just go over some statistics
[00:08:30.596]and numbers regarding the community banks and the impact
[00:08:34.730]that community banks have on Nebraska.
[00:08:36.775]Banks nationwide make about 80%
[00:08:40.940]of agricultural operating loans.
[00:08:42.905]Nebraska banks make 10% of the nation's operating loans,
[00:08:48.170]so Nebraska is, the banking community is very, very active,
[00:08:53.100]particularly with operating loans.
[00:08:55.606]There's 160 commercial banks with over 1,000 locations
[00:09:01.470]and 15,000 employees, so there's lots of us out there.
[00:09:05.175]Banking, starting a business, requires human interaction.
[00:09:10.640]So there is a army of bankers that are, that are out there.
[00:09:16.970]Once, I think that bankers, of course,
[00:09:19.820]will play an important role to help new entrance
[00:09:23.150]into this business if we get organized
[00:09:25.087]and we put our mind to it.
[00:09:27.770]For instance, the PPP loans, our bank community made over,
[00:09:33.076]let's see, 114,000 loans.
[00:09:36.400]And we put $5,000,000 to work, so getting organized,
[00:09:42.960]we have lots of interest
[00:09:44.010]in Nebraska, particularly agriculture.
[00:09:47.791]It's our livelihood.
[00:09:51.190]Homestead Bank, we're an agricultural bank.
[00:09:55.190]We hold about $70,000,000 of capital.
[00:09:58.340]Our agricultural loans are about $200,000,000,
[00:10:01.880]so we're very highly concentrated in agriculture.
[00:10:06.150]We live and die by agriculture,
[00:10:08.280]so how we survive is to help the new entrants get
[00:10:11.970]in the business.
[00:10:12.803]So we have quite a stake in getting and helping the business
[00:10:18.180]as particular agriculture businesses get established all
[00:10:21.990]across Nebraska, so those are the highlights.
[00:10:24.759]Great.
[00:10:26.150]Thanks, Steve. That's me.
[00:10:27.890]Great, and we'll come back to you all
[00:10:31.150]in a second.
[00:10:31.983]Ben, you're next up.
[00:10:33.930]Can you hear us okay? I can hear you.
[00:10:35.961]I guess I should ask can you hear me?
[00:10:37.856]We can hear you.
[00:10:39.350]Absolutely.
[00:10:40.560]You're larger than life here, Ben.
[00:10:43.670]I appreciate the chance to join y'all.
[00:10:45.541]I regret that it can't be in person.
[00:10:49.260]I so wanted to be there today,
[00:10:51.600]but we make do of what we can so that,
[00:10:54.390]I appreciate the flexibility, you know,
[00:10:56.320]in your staff and your team,
[00:10:58.144]the individuals that made this happen.
[00:10:59.930]So, unfortunately, the audio is working initially.
[00:11:03.430]So I haven't heard about the last three words of my bio,
[00:11:07.970]Vice Chancellor Bane.
[00:11:09.030]But, luckily, those were, when you talk about my job,
[00:11:11.608]those are the most important parts of it.
[00:11:15.260]So the rest of it is kind of immaterial.
[00:11:18.300]I'll kind of expand, I guess, a little bit.
[00:11:21.060]Tom mentioned, you know,
[00:11:21.893]he has got a uniqueness he brings to us.
[00:11:24.020]And I think that's, from my perspective, you know,
[00:11:27.430]I've been working for Homestead for 15 years.
[00:11:29.692]And I've been lucky enough, I guess,
[00:11:31.377]and fortunate enough that I've spent, you know,
[00:11:33.817]almost a half a decade, you know,
[00:11:35.900]as a loan officer and an officer off in Ogallala.
[00:11:39.280]I spent six years, you know, in Hastings.
[00:11:41.630]So I got to learn, kind of,
[00:11:43.570]that South and central part of city and the culture there.
[00:11:47.290]I was born and raised, you know, in Northern Colfax County.
[00:11:50.050]So I've got that low case roster perspective,
[00:11:53.010]and then I spent the last four or five years, you know,
[00:11:55.183]here in Lincoln in our roster state office kind of as more
[00:11:58.810]of a specialized and policy and management standpoint.
[00:12:01.484]So I got to see a lot of different sides of that
[00:12:05.499]and the United States and the diversity of state
[00:12:07.853]over the last 15 years, you know,
[00:12:11.040]specifically about the farm service agency.
[00:12:13.760]And I know you've heard, you know, Epistate mention, I know,
[00:12:17.210]in section one, I was listening, you know.
[00:12:20.420]And there's been discussions of pom pom service agency,
[00:12:23.030]and we play a neat role,
[00:12:25.950]kind of what I like to call the end credit,
[00:12:28.066]you know, pyramid.
[00:12:29.766]And, really, that's, you know,
[00:12:31.860]the majority of the precursor
[00:12:33.920]that we're able to help are really, you know,
[00:12:37.060]beginning farmers and ranchers and, specifically,
[00:12:39.410]here in Nebraska.
[00:12:40.243]You know, we look at this last year and kind
[00:12:42.250]of the last decade.
[00:12:43.780]About 70% of the loans that we make are on able basis.
[00:12:48.120]Go to beginning farmers and ranchers,
[00:12:49.880]not somebody we consider to be
[00:12:52.010]in their first 10 years of operation.
[00:12:53.710]So I really think we fit the theme of what we're talking
[00:12:56.456]about here today on, specifically, in Nebraska.
[00:13:00.916]You know, FSA has 71 offices.
[00:13:03.750]And so we provide assistance to every county in the state.
[00:13:08.166]From a farm loan perspective, we have 21 offices.
[00:13:12.320]And so each one
[00:13:13.153]of those farm loan offices typically helps anywhere
[00:13:15.560]from four to five Philadelphia counties.
[00:13:18.140]You know, we're in trade centers with, you know,
[00:13:22.180]different areas of the state geographically.
[00:13:25.800]And, you know, our primary mission, you know, is,
[00:13:28.840]this comes from the farm bill and from Congress.
[00:13:32.451]We're a member of a agency
[00:13:34.150]of Department of United States of Agriculture,
[00:13:36.480]so we're funnel advance team.
[00:13:39.050]And our loans are, you know, subsidized by Congress.
[00:13:41.750]And so, with that, we have subsidized interest rates.
[00:13:46.720]But we're also able to, as a federal entity,
[00:13:49.120]be able to take on more of this, you know,
[00:13:51.620]VG have a clientele that we're able to, you know,
[00:13:56.300]provide longer terms for, fixed rate financing.
[00:14:00.200]We're not in competition with Jerusalem.
[00:14:02.200]I know many of the panelists that we have on here today,
[00:14:06.079]you know, we work with them.
[00:14:07.290]Our job is really to get a loan preser to a point
[00:14:11.237]that we can graduate them or move them on for credit
[00:14:14.570]for funnel cake.
[00:14:15.614]That's a successful, you know, model for us.
[00:14:19.510]We also have those borrowers that come to us who may be
[00:14:22.530]about 34 period of time.
[00:14:26.390]You know, we all know how ag boom years.
[00:14:28.878]And there are gonna be some bust years in there.
[00:14:32.700]And so when you do get those distress ballers who have been,
[00:14:36.400]you know, producing for a long time but are suffering
[00:14:38.940]from some, whether it's blood related events,
[00:14:42.160]trade we talk about and just need a chance
[00:14:44.630]to just get their feet back under them,
[00:14:46.840]maybe re-organize their debt a little bit
[00:14:48.610]and some loan fixed rate finding, you know,
[00:14:51.890]and get them back on their feet,
[00:14:53.160]get that cash flow positive again and get them back on
[00:14:56.336]to the credits.
[00:14:59.130]You know, within FSA, we have, you know,
[00:15:01.190]safety net programs.
[00:15:02.260]We have disaster system programs.
[00:15:04.280]We have conservation type programs.
[00:15:06.581]But in the focus of today and what my background is in,
[00:15:10.005]it's all fun daman programs.
[00:15:11.570]And so, you know,
[00:15:12.890]we operate much like an ag bank from credit.
[00:15:16.210]We got op program.
[00:15:18.790]We got loans for any type of operating loan, whether it's,
[00:15:21.460]you know, input financing,
[00:15:23.120]whether it's purchasing machinery, purchase of livestock,
[00:15:26.030]you know, fee FC kind of, all that good stuff.
[00:15:28.780]And then we have,
[00:15:30.010]we call it farm ownership and real estate program.
[00:15:31.977]You know, we can make loans and purchase real estate or,
[00:15:35.550]you know, make capital improvements on that kind of thing.
[00:15:38.930]So we're a large lender nationally.
[00:15:43.440]You know, our portfolio is about 14.3 billion from what,
[00:15:48.120]from directional standpoints.
[00:15:49.510]Those are loans that we make and service in-house.
[00:15:53.060]We've also got kind of a separate entity.
[00:15:55.100]We call it a guarantee loan program.
[00:15:56.547]And that's where, essentially,
[00:15:57.740]we back loans that never runs or comes to us,
[00:16:02.240]guaranteed from lingerie bank,
[00:16:04.940]naturalized in over 17.5 billion dollars nationally.
[00:16:08.770]So Nebraska, you know, obviously, we're a well-back state.
[00:16:12.085]You're in and you're out nominations, meaning, you know,
[00:16:16.483]beggers of loans within FSA.
[00:16:20.210]I think just in fiscal year, 2021 alone,
[00:16:22.860]we've made over 1,700 grant loans across the state
[00:16:28.330]for just over $273.
[00:16:30.920]So we've got a great mission from Congress
[00:16:33.133]that we're tasked with.
[00:16:35.350]We're really that lender of first opportunity, you know,
[00:16:38.790]in times that, when you're a last resort as well.
[00:16:42.230]So, you know,
[00:16:44.390]it's our job to kind of either know that base and help build
[00:16:47.843]that acrity from a national producer or to read
[00:16:50.420]that inequity in times of need.
[00:16:52.690]So I know this is probably how to follow Steve's, you know,
[00:16:57.810]stories, good stories.
[00:17:00.090]I happen to know Steve quite well.
[00:17:02.080]I grew up pretty near to Granny,
[00:17:04.610]and so I had a Fa Mulan muscle town here today.
[00:17:08.700]So with that, I appreciate the invitation.
[00:17:11.450]Yeah, thanks, Ben.
[00:17:12.484]And with that, we'll jump over to Brandy.
[00:17:15.460]Thank you.
[00:17:16.640]Yep, I'm Brandy Ballser.
[00:17:18.420]I live in Northeast Nebraska, so near Clarkson.
[00:17:21.500]And my husband and I
[00:17:22.333]and three daughters have a cow/calf operation.
[00:17:25.540]We have about 60 cow/calf pairs,
[00:17:28.760]and I went to a farm credit services of America for
[00:17:31.016]about 14 years.
[00:17:33.020]And during that time, I've been in various roles.
[00:17:35.960]So whether it's lending officer or consumer lending,
[00:17:40.560]I've been in different sales service, talent management,
[00:17:44.380]or development roles.
[00:17:46.840]But now I currently lead our young, beginning,
[00:17:49.710]and small program that we have
[00:17:51.750]at Farm Credit Services of America.
[00:17:53.900]And that program really is focused
[00:17:55.810]on providing specialization to our producers,
[00:17:59.550]providing education, and products.
[00:18:02.230]And at Farm Credit Services of America, we have,
[00:18:04.930]about 44% of our producers are young, beginning, or small.
[00:18:09.920]And 18% of those have risk management with us,
[00:18:13.160]so that's livestock, insurance,
[00:18:16.580]or comp insurance, hail insurance.
[00:18:20.560]And so in our, with that 44%,
[00:18:24.100]we realized that we really needed a program
[00:18:26.980]that was focused, specifically,
[00:18:28.100]for how we can develop our young, beginning, and small.
[00:18:32.300]And so in our program, like I said,
[00:18:34.820]we have this specialized role.
[00:18:35.990]It's in Bens, our financial officers,
[00:18:40.010]customer education, myself.
[00:18:42.060]And we help to provide one-on-one education,
[00:18:46.350]or one-on-one relationships with those producers.
[00:18:49.110]And then in the education,
[00:18:51.700]we have specific education that we create
[00:18:54.380]for our young and beginning.
[00:18:55.710]And that's from feedback from those producers as well as
[00:19:00.960]from the feedback from the financial officers on
[00:19:03.090]what would they like to see in education.
[00:19:05.750]Is it transition planning?
[00:19:07.290]Is it risk management?
[00:19:08.660]What would they like to learn about
[00:19:10.870]to make their operations most successful,
[00:19:13.420]and then our products are another important piece
[00:19:16.570]to our young and beginning program.
[00:19:18.949]We have, as you heard earlier today,
[00:19:21.000]we have a development fund that helps our producers.
[00:19:25.720]And that can help them with working capital,
[00:19:27.970]with breeding livestock,
[00:19:29.410]or that also is for contract finishing facilities.
[00:19:34.250]And we also have an ag start program, excuse me,
[00:19:38.090]for our young and beginning also.
[00:19:40.020]So it's really important to us that we're a part
[00:19:43.250]of the future of agriculture and helping our young
[00:19:45.987]and beginning, and one of our leaders will say,
[00:19:48.757]"We wanna work with people that want more than just a loan."
[00:19:53.490]They don't want a loan and to be left alone,
[00:19:55.690]and so we really focus on spending time to provide more
[00:20:00.330]of a package to our producers
[00:20:02.360]through education and products.
[00:20:04.100]Yeah, thanks, Brandy.
[00:20:05.250]You know, this is, this,
[00:20:06.810]I've been looking forward to the whole day.
[00:20:08.970]But in particular,
[00:20:10.990]this panel because it brings the diversity
[00:20:14.400]of opportunities lending coaching risk management
[00:20:21.130]from Farm Credit Services of America with FSA and
[00:20:25.670]with the commercial banking platform.
[00:20:27.880]So I just did a crude check,
[00:20:30.840]probably close to 80 years worth of experience
[00:20:34.310]with these four panelists working directly with young,
[00:20:37.860]beginning, and small farmers and ranchers.
[00:20:41.070]So really looking forward to hearing more
[00:20:43.890]about the specific programs.
[00:20:45.640]Glenn, I'll kick it over to you.
[00:20:47.880]Okay.
[00:20:48.798]Thanks, Mike.
[00:20:50.250]Before we set that line of demarcation up
[00:20:53.720]between the commercial lenders and farm credit,
[00:20:56.390]let me tell you about my ag senate confirmation hearing.
[00:21:01.425]And in it, the senators, primarily from ag states,
[00:21:06.064]wanted to know my background with financing.
[00:21:09.540]And I said,
[00:21:10.373]"You know, I've worked with commercial,
[00:21:11.820]or local commercial banks.
[00:21:14.950]We've had loans bundled with Farmer Mac.
[00:21:18.120]We've all worked with Farm Credit Services,
[00:21:20.370]Farm Credit Services of America represented here today."
[00:21:24.020]And I said, "I believe in alternatives.
[00:21:27.600]I don't have any one entity.
[00:21:31.870]I believe in the farmers and ranchers having alternatives."
[00:21:35.330]As a hit back in the 80s, I asked my grandma for a loan.
[00:21:38.587]And she turned me down,
[00:21:40.220]so we didn't have a good credit risk, right?
[00:21:42.180]But the important thing was I had somebody that reached out.
[00:21:47.360]My wife and I had somebody that reached out and developed
[00:21:50.330]that relationship with us early, and that fosters my belief,
[00:21:55.800]strong belief, in those relationships.
[00:21:57.700]And I know it happens in commercial banks, community banks,
[00:22:01.290]as well as farm credit.
[00:22:02.670]So just to let you know a little bit about my background and
[00:22:06.100]what I'm all about.
[00:22:07.430]I believe in alternatives for the benefit of young
[00:22:10.487]and beginning farmers.
[00:22:13.260]So this morning we had a chance to hear from a group
[00:22:16.196]of young, beginning, small farmers, ranchers, entrepreneurs.
[00:22:21.450]And they touched on some of the programs that they tapped
[00:22:24.655]into, but I wondered just if you could break down some
[00:22:28.480]of the programs as a recovering plant pathologist.
[00:22:31.295]It's more complicated than the
[00:22:33.772]Institute of Agriculture and Natural Resources for me
[00:22:37.150]and all the parts and the pieces,
[00:22:38.500]so I wondered if you could maybe showcase or highlight,
[00:22:41.970]especially for those in the audience and those listening.
[00:22:45.290]You know, what are some of those programs?
[00:22:47.050]And each of you are, each of you are seers that young,
[00:22:51.141]beginning, and small farmers and ranchers bought
[00:22:54.470]to be considering as they go about their journey.
[00:22:58.831]Yeah, well,
[00:23:00.690]so again with Western Nebraska bank,
[00:23:03.530]we work directly and indirectly with the farm service agency
[00:23:08.170]and also the small business administration.
[00:23:12.460]As far as our business goes,
[00:23:14.010]we're only successful if you're successful.
[00:23:16.460]And so, we try to do everything we can
[00:23:21.378]to help you get yourself to the position
[00:23:24.550]that you need to be in order to be successful again.
[00:23:26.990]But, there's a lot of paperwork involved
[00:23:30.100]with the farm service agency.
[00:23:31.970]There's paperwork involved with banking as well, but,
[00:23:34.760]one thing that I'll do,
[00:23:35.700]even if I'm unable to successfully bank a young
[00:23:40.307]and beginning farmer rancher,
[00:23:42.190]I'll go through some of that paperwork with them.
[00:23:45.040]And I'll begin building that relationship right there
[00:23:47.960]when they walk through the door.
[00:23:50.470]If they need to go to FSA and do direct lending,
[00:23:53.060]that's perfectly fine with me.
[00:23:54.680]I want them to take advantage of every option
[00:23:56.520]that they have in order to create a profitable business.
[00:24:01.250]And so again, I'll begin building that relationship,
[00:24:04.485]spend time with that customer maybe send them down the road,
[00:24:08.690]but hopefully, when they do graduate from those programs,
[00:24:11.330]they'll be able to come back
[00:24:12.380]and I'll have a future with that customer.
[00:24:17.560]Well, I did make a few notes from the panel this morning.
[00:24:23.980]I actually was more interested to hear what
[00:24:28.430]the beginning farmers had to say then maybe,
[00:24:31.285]what I had to say.
[00:24:33.562]So, I'll just touch on a couple of my takeaways
[00:24:38.150]as I drive back to Chadron this evening,
[00:24:41.550]Grant, don't be afraid to be told no,
[00:24:45.620]I think that was really a good point.
[00:24:47.560]One of the biggest regrets in my career
[00:24:51.184]are those times I said, no,
[00:24:54.040]Because, I really never learned what the outcome could be
[00:24:58.800]if I said no.
[00:25:00.450]So, over the career, by sitting down with farmers
[00:25:05.040]and ranchers, particularly beginning farmers and ranchers
[00:25:07.910]who had new ideas, over time we learn how to ask
[00:25:11.510]the right questions.
[00:25:12.970]So I remember saying, well, you've gotta remember I started
[00:25:16.610]and in this business just as we're coming out
[00:25:20.650]of the ag crisis.
[00:25:21.760]So we, we were pretty well taught how to say no.
[00:25:25.660]So within the first 10 years, I said no a lot.
[00:25:28.960]And I'm saying in the last 25 years,
[00:25:31.240]I can't remember the last time I said no,
[00:25:33.860]because I learned how to ask the right questions
[00:25:37.250]and tried to pull that information out of
[00:25:40.636]the inspiring farmer ranchers.
[00:25:44.310]So that they could learn, from again,
[00:25:49.730]just the questions never gave them the answer.
[00:25:51.790]So, I don't remember the last time I did say no,
[00:25:55.100]or actually denied a loan.
[00:25:57.200]So just interacting with the customers is probably
[00:26:00.700]the biggest program that community banks would have.
[00:26:04.870]We've learned to leverage farm service agency.
[00:26:08.940]It is just one of the greatest public-private
[00:26:13.170]partnerships in America,
[00:26:15.130]because what sets the USDA/FSA apart
[00:26:19.190]is that they actually care.
[00:26:21.490]That's an agency that cares.
[00:26:23.780]And this came from Richard.
[00:26:25.450]I remember you, telling me that one time, Richard,
[00:26:29.110]that they just care.
[00:26:31.000]So trying to get people with people who care
[00:26:35.880]is probably that the number one.
[00:26:39.660]Great.
[00:26:40.680]Awesome.
[00:26:42.240]Ben,
[00:26:50.174][Inaudible]
[00:26:51.670]Hold on a second Ben, they're trying to get,
[00:26:53.580]there you go.
[00:26:54.790]We didn't hear it.
[00:26:55.743]You hear me? Yeah.
[00:26:56.576]We were reading your lips there for a moment but,
[00:26:59.800]Well, that's never a good thing
[00:27:02.651]The FSA, you know, really beginning farmers,
[00:27:06.130]small producers that's really our niche.
[00:27:08.230]That's really our focus on our lifeblood.
[00:27:10.510]And we've got some specific programs that really
[00:27:14.910]are centered around that.
[00:27:15.960]So again, we work as has been said here on the panel,
[00:27:21.820]We work in participation with lenders, with farm credit.
[00:27:26.150]A lot of times an applicant or bar that we have
[00:27:30.150]is also getting other financing through
[00:27:33.608]Marshall lender or farm credit.
[00:27:34.907]And so we oftentimes do that joint finance role.
[00:27:39.550]One of the benefits that FSA has,
[00:27:42.570]that sometimes aren't available in commercial sectors,
[00:27:46.290]number one, we've got, as I mentioned,
[00:27:49.005]lower subsidized interest rates.
[00:27:51.611]So if you don't have that ability
[00:27:54.254]to get that for commercial credit that you're looking for,
[00:27:56.810]that's kind of where we come into play.
[00:27:58.861]Our interest rates are fixed.
[00:28:00.610]And so, that provides you some stability
[00:28:03.076]and lowers that risk over time.
[00:28:05.040]If we take this maybe breeding more livestock
[00:28:10.340]or machinery equipment tag purchase in a lot of time,
[00:28:13.250]maybe, if you're out a commercial bank,
[00:28:15.948]or maybe if it's dealer financing, you're gonna be limited
[00:28:18.910]to a three or five- year term.
[00:28:21.690]We have that ability on reading livestock
[00:28:23.900]and share equipment to extend that term,
[00:28:25.830]that loan up to over seven years,
[00:28:27.710]Again, with lower interest, a longer term,
[00:28:30.640]freeing up that cash flow, which,
[00:28:32.498]a lot of times for a young producer,
[00:28:34.935]that they've got quite a term that,
[00:28:38.060]they've got to be able to cover.
[00:28:39.920]Being able to free up some,
[00:28:41.085]some income in that cashflow, allows them to expand
[00:28:44.251]in some areas.
[00:28:45.748]But just reduces the stress on that on their cashflow
[00:28:49.806]of real estate.
[00:28:51.330]If we're looking at something in- house,
[00:28:54.640]or even in partnership with with this fitting lender,
[00:28:58.750]we can stretch our real estate loans out to 40 years.
[00:29:01.229]Which again, when you take a low fixed rate financing,
[00:29:04.130]I mean, today interest rate is 3% number.
[00:29:07.360]You know what am saying,
[00:29:08.891]if you had the ability to stretch that out over 40 years,
[00:29:11.602]again, you create that flexibility in your cashflow
[00:29:15.540]to be able to meet some of the other goals
[00:29:18.500]that you might have in your operation.
[00:29:20.621]We are limited in size and scope of we you can help.
[00:29:26.520]If I take the farm ownership real estate program,
[00:29:28.440]for example, we're limited to $600,000 FSA.
[00:29:33.300]And so, I know that that man's Atwater question earlier,
[00:29:38.703]we know what groundbreakings,
[00:29:40.690]if you're in some of our properties in parks the stakes
[00:29:44.936]you can see, most ground overwhelming million dollars.
[00:29:50.310]And so, the great thing about what we can do is again,
[00:29:53.370]by offloading some of that risk, maybe we can get work
[00:29:57.110]with the same on your work with farm credit.
[00:29:58.920]Whereas they make it's at $1.20 million deal,
[00:30:02.160]they make the first $600,000, FSA will take a second lean
[00:30:05.757]and come in at the other $600,000.
[00:30:07.820]So we'd assume,
[00:30:09.450]the majority of the risk that,
[00:30:10.879]that's what we're out here to do.
[00:30:14.370]Your loan still has to cashflow.
[00:30:15.930]You still have to be eligible.
[00:30:18.245]So we're still meeting that core underwriting criteria,
[00:30:19.960]but we're allowing you to again, assume some risk
[00:30:23.939]and otherwise credit that you might not be able
[00:30:27.080]to strictly have commercial creditor.
[00:30:29.920]So we don't need any down payment ability.
[00:30:32.920]Most our loans, if we can get to a hundred percent security,
[00:30:35.580]so one- to- one.
[00:30:37.351]Again, if you meet all the other aspects,
[00:30:39.350]typically we're able to do the deal.
[00:30:41.380]So again, we offer that flexibility that length
[00:30:43.569]of extension of terms, that lower fixed rate financing,
[00:30:48.440]and ultimately that should help just helps the cash flow.
[00:30:51.297]One of the great programs that we have
[00:30:53.702]in the real estate side of things
[00:30:54.580]that I guess utilize quite a bit,
[00:30:57.080]you hear about it sometimes, it's called a 50-45-50 loan.
[00:31:00.820]You're referred to it
[00:31:01.950]as a first time a farmer loan.
[00:31:04.709]And what that is if you do have the ability
[00:31:08.099]to make a 5% down payment, which again,
[00:31:11.050]we know that's not the case and that wouldn't exclude you
[00:31:13.520]from some other programs that we have,
[00:31:15.930]but if you do have the ability to make 5% down,
[00:31:20.230]you can go and get 5%.
[00:31:22.004]If you get the 5% down, the next 45%,
[00:31:26.367]We would take on here at FSA up to a limit of at this time,
[00:31:31.187]$300,150, but that rate would be 1.5% over 20 years.
[00:31:37.239]And then the remaining 50% or greater you would go out
[00:31:40.514]to commercial lender, farm credits and get the remainder
[00:31:45.580]of that financing `to those institutions.
[00:31:48.940]Again, FSA is taking that second lean.
[00:31:51.080]So that helps you meet those, lending capacities
[00:31:56.140]that the other lender might need in
[00:31:58.980]that particular piece of ground.
[00:32:01.270]You're able to meet that because FSA is providing that,
[00:32:03.720]that additional financing.
[00:32:06.680]Again, there's a lot of situations where
[00:32:09.980]we may help with a real estate loan on a younger individual
[00:32:13.560]or stress borrower, but maybe the banker from credit
[00:32:16.980]continues to keep them as their operating lender.
[00:32:20.450]And we see that quite a bit,
[00:32:21.680]We see that relationship.
[00:32:23.532]It's one more layer in process, but again,
[00:32:26.530]I think as we're all talking about here today,
[00:32:29.230]if we can create terms and success for our borrowers,
[00:32:33.510]that's the ultimate mission, and there's nothing that I
[00:32:37.350]take greater pride in or find greater happiness in
[00:32:40.104]than watching a borrower young borrower
[00:32:43.940]comes into our program and say,
[00:32:46.200]we're able to help maybe transition to some joint,
[00:32:50.950]commercial assistance at one point
[00:32:52.850]or potentially a guaranteed loan.
[00:32:56.942]But then at some point, transition that bar out for full
[00:33:00.416]that they can develop that long- term relationship
[00:33:02.040]with that wonder down the road.
[00:33:03.747]And that's really the ultimate mission that the say
[00:33:07.430]and again, we've got so many programs that help
[00:33:09.970]beginning farmers and ranchers.
[00:33:12.010]We also have what's called a micro-loan program.
[00:33:14.930]Now it's limited to $50,000 on both operating type loans
[00:33:19.160]and real estate real estate type loans,
[00:33:22.230]but `it's a reduced application process.
[00:33:24.910]It's a quicker process.
[00:33:26.489]So if you're somebody that again meets that maybe
[00:33:28.860]that real small and niche farmer producer operation,
[00:33:33.430]that might be an area where,
[00:33:35.437]there are some lenders out there that, again,
[00:33:38.710]because of your smaller size and limited resources
[00:33:43.270]they may not have the expertise or don't wanna get,
[00:33:46.269]get involved in a farmer's market type project.
[00:33:50.050]That's where we kind of see that micro room
[00:33:52.430]pop up in the new potential play for some people,
[00:33:55.040]rather than maybe taking your operation '
[00:33:56.890]and having to lend it on high interest rate credit cards.
[00:33:59.660]For example, you could turn around and run that on a 2%,
[00:34:03.193]operating on FSA and try to build for operation that way.
[00:34:07.290]So again, those are just some of the programs
[00:34:09.760]that we have, I think are specifically more
[00:34:11.730]to a beginning farmer or small farmers or actors.
[00:34:15.710]But then one of the great aspects we also have at FSA
[00:34:19.070]is our ability to refinance or restructure you in house.
[00:34:25.700]Again, if you're not able to make your payments,
[00:34:27.730]just all the tools that we have in our tool to be able
[00:34:31.120]to refinance debt, to extend that debt, try to keep you
[00:34:34.350]on the farm as long as that farm can project any viable,
[00:34:38.190]that's really our mission.
[00:34:39.800]Thanks, Ben, appreciate it.
[00:34:41.770]One thing I'm getting a sense for is that
[00:34:44.220]it's not one or the other, but a both and or a combination.
[00:34:49.005]And the linkages amongst the lenders with different programs
[00:34:54.650]to put a package together for that beginning young,
[00:34:58.230]small producer, that best meets their needs.
[00:35:01.340]Brandy.
[00:35:02.830]Yeah, We are at farm credit services of America
[00:35:05.996]and frontier have kind of two different areas
[00:35:08.380]that we can serve the young and beginning
[00:35:11.430]with our ag start program.
[00:35:14.160]That's a broader program for those that are kind
[00:35:18.022]of to Ben's point he had made earlier,
[00:35:20.530]the USDA standards of young and beginning.
[00:35:24.140]So 35 years of age or younger,
[00:35:26.830]and 10 or less years of farming.
[00:35:28.990]And so producers that fit within that come to us
[00:35:32.830]and we provide them with a decreased interest rate.
[00:35:35.466]The credit standards are relaxed.
[00:35:39.680]So it offers them a little bit better option
[00:35:43.020]to get their operation started, growing transitioned.
[00:35:47.530]And then we have the development fund,
[00:35:49.210]which I spoke to earlier, and that is based
[00:35:52.090]on a business plan.
[00:35:54.090]And so as producers put together a business plan,
[00:35:56.550]we sit down them and go through that.
[00:36:00.152]It's somewhat of an intense, more intense process,
[00:36:04.300]but that's based more on character and a few other bits
[00:36:08.690]of criteria versus Jeff's credit standards for them.
[00:36:12.590]And we've financed, abroad,
[00:36:15.090]variety of operations in that program.
[00:36:18.311]And again, that one is not as broad as far as products,
[00:36:23.050]the ag start is for line of credits, real estate,
[00:36:26.590]installment, while the development fund is focused more
[00:36:30.470]on that working capital, breeding livestock purchases,
[00:36:33.490]and the contract finishing.
[00:36:36.190]So that was just kind of the two areas
[00:36:37.640]that bring the greatest value as far as programs
[00:36:40.741]to our young and beginning that are focused solely
[00:36:42.990]on young beginning.
[00:36:44.230]Thanks Brandy.
[00:36:47.840]Looking to you Glenn to see
[00:36:49.890]if you wanna jump in there. Yeah, well,
[00:36:52.682]I would like to particularly in speaking to Ben
[00:36:58.400]on that critical importance of that FSA lender,
[00:37:06.540]banking, lender, farm credit lender relationship.
[00:37:12.190]Back idea was hatched with that time under secretary
[00:37:16.460]Bill Northey, a friend of mine from Iowa at FSA
[00:37:20.920]to bring together representatives from farm credit system
[00:37:25.579]and the commercial banking sector,
[00:37:27.440]the community banking sector in FSA,
[00:37:30.900]and figure out how we could leverage the resources
[00:37:34.886]of UFSA of you FSA loan officers to better
[00:37:39.580]cut through the paperwork, cut through the red tape,
[00:37:41.870]because that's kind of a common theme we hear
[00:37:45.520]around the country quite frankly,
[00:37:49.045]is the loan officers have a tremendous workload
[00:37:51.610]in front of them.
[00:37:52.970]And your boss Bill Cob there in DC, wholeheartedly says,
[00:38:00.197]"If we can figure out how to leverage the resources
[00:38:03.450]of these loan officers, we can go that much further."
[00:38:07.550]So we did a virtual conference,
[00:38:10.400]I know virtual believe me, I'm sick of them too,
[00:38:13.970]but we did bring together all of the representatives,
[00:38:19.890]including FSA, and we've devised the start of a plan
[00:38:26.520]to try to customize that approach.
[00:38:30.760]To try to cut down on the red tape,
[00:38:32.740]you've got a preferred lending program, right?
[00:38:34.830]That offers, I guess kind of a canned shortcut response
[00:38:38.730]for lenders, which is of great help
[00:38:42.330]in developing these loans for beginning farmers.
[00:38:46.170]There's a common theme in my travels,
[00:38:48.740]the more successful associations like farm credit services
[00:38:52.040]America, team up on a regular basis with the FSA
[00:38:56.320]guaranteed loan package.
[00:38:58.500]It's a great fit.
[00:38:59.333]It mitigates risk, and it mitigates risk
[00:39:02.910]for limited resources and also the subsidized interest rate,
[00:39:05.930]although interest rates, how low do you go at some point?
[00:39:10.230]I think the real benefit is that lack of capital
[00:39:14.600]with that beginning farmer, young and beginning farmer,
[00:39:17.550]and being able to mitigate that with your
[00:39:19.160]guaranteed programs.
[00:39:20.260]So we had that virtual conference here last September.
[00:39:23.840]I understand that FSA has taken off and sponsored
[00:39:27.335]some conferences since then.
[00:39:31.457]And I guess I would ask you,do you have any idea where
[00:39:34.460]that's at right now within FSA?
[00:39:39.515]Are you referring to what they've kind of turned
[00:39:41.730]the beginning farmer-rancher Lennox summit group?
[00:39:44.360]Yes.
[00:39:45.300]Yes.
[00:39:46.133]This last September.
[00:39:46.966]I'm actually a part of that good
[00:39:47.799]on behalf of FSA, good.
[00:39:49.683]And so we're taking on a lot of different areas,
[00:39:55.050]but we've tried to dwindle it down and prioritize
[00:40:00.160]some areas, modernizing, the FSA paperwork process
[00:40:04.460]would be one, consistency and how I can say operates
[00:40:08.770]is another important area.
[00:40:11.121]Part of that ability to meet,
[00:40:13.550]look and guarantee loans it's another area.
[00:40:16.440]We've met I suppose, on a quarterly basis Jeremy Smith
[00:40:20.230]over the last year.
[00:40:23.484]I would say we're at the point where we're we separated
[00:40:28.280]our groups and we were kinda bringing all our ideas
[00:40:31.055]to the table here.
[00:40:32.012]I think we've got another meeting next week.
[00:40:35.045]And it kinda brings all the ideas
[00:40:36.350]that everyone's been working on,
[00:40:37.940]within their subgroups back to the table to where
[00:40:41.559]we can start maybe talking about those with the departments
[00:40:43.950]and hopefully to be able to make some headway
[00:40:47.029]for implementing some of those down the road with this.
[00:40:49.590]Well, that's great.
[00:40:50.423]That's a good example of how we all can work together
[00:40:53.685]is one Congressman I'll remain unknown said,
[00:40:58.187]"Imagine that government agencies actually working together
[00:41:01.940]and competitors actually working together to the benefit
[00:41:05.560]of young agriculturalists."
[00:41:08.450]So I'd sure like to see that continue
[00:41:12.470]and I know that as far as the political support,
[00:41:14.780]I'm convinced it's there.
[00:41:18.260]Yeah.
[00:41:19.229]So that's a fine point to really,
[00:41:21.363]what I'm hearing you say Chairman is really
[00:41:24.810]put a focus on the success of our young,
[00:41:27.850]small beginning producers and work and do whatever it takes
[00:41:33.230]to help them succeed.
[00:41:34.450]So with that, let's let's open it up for questions.
[00:41:38.280]I mean, there are a lot of young,
[00:41:40.943]small and beginning farmers and ranchers in the room.
[00:41:44.090]So do you have questions from a commercial lending
[00:41:49.080]community lending aspect FSA or from farm credit services
[00:41:54.430]of America's portfolio?
[00:41:57.630]Okay.
[00:41:58.463]So I know a lot of us young farmers are mainly into
[00:42:01.640]specialty crops or, or doing that.
[00:42:04.490]Do you know what experience you guys have with lending
[00:42:08.240]to specialty crop growers who may not have a profit
[00:42:10.890]for say the first three years?
[00:42:12.610]Because like say me hops takes three to four years
[00:42:16.640]to become a viable crop.
[00:42:20.100]So Thanks for your question about covering that gap
[00:42:23.700]from starting point to when you're profitable.
[00:42:26.120]Do you mind sharing name and where are you from?
[00:42:28.540]My name's Greg Jeffery?
[00:42:29.540]I'm actually from here in Lincoln.
[00:42:31.280]I grow on my parents' land out in Denton, Nebraska.
[00:42:34.400]Perfect.
[00:42:35.490]Thanks.
[00:42:36.323]Who would like to?
[00:42:38.180]We can just go down the line.
[00:42:41.350]One thing that I think is really important is that you
[00:42:43.770]completely and very thoroughly do your homework, right?
[00:42:47.350]So it's important to put together a business plan.
[00:42:50.171]There's places you can go, that'll help you do that.
[00:42:52.890]I know I just, I'm familiar with my area the most,
[00:42:55.860]but you can go to mid Plains community college
[00:42:57.580]in north Platte and sit down, they have a free service
[00:43:00.250]and they'll help you kind of piece that together.
[00:43:04.080]And then obviously your, your college classes will help you.
[00:43:06.753]But you need to understand the ins and outs
[00:43:09.890]of a financial statement income and expense,
[00:43:12.620]do a three- year projected.
[00:43:14.590]The more information that you have,
[00:43:16.540]and you're able to share with your loan officer,
[00:43:19.400]it just really helps
[00:43:20.290]that bad conversation, that process get going.
[00:43:24.900]I have a question.
[00:43:27.120]So in your business plan, well,
[00:43:31.070]or - In your thoughts?
[00:43:34.362]I would just say from an apple safe respect,
[00:43:37.030]cause that's a, that's a great question.
[00:43:39.260]No, we get involved in specialty, specialized operations,
[00:43:44.100]probably a little more we obviously we've got resources
[00:43:47.660]from across the country that even if it's not
[00:43:49.470]something that maybe we're specific to or have a lot of
[00:43:53.620]knowledge here in our state,
[00:43:55.520]we've got resources throughout the country
[00:43:56.950]that maybe it's a little more popular.
[00:43:59.230]In other areas to glean off of, but Tom's discussion
[00:44:02.440]a little bit that oftentimes we see individuals that can
[00:44:05.960]come in with a good production plan,
[00:44:09.530]but the marketing plan and how they plan to market
[00:44:13.700]that specialty crop or that operation is lacking
[00:44:17.409]a little bit.
[00:44:19.270]And that I know you can get a lender's concern is,
[00:44:24.250]we can see that you have the ability to show,
[00:44:26.410]the ability to produce it, but sometimes, there's a shortage
[00:44:29.900]in what's in that marketing plan.
[00:44:31.410]So, that's one of the things I think that in context,
[00:44:34.553]when you come in, if you are a specialized operation
[00:44:38.800]its really come in having done your homework
[00:44:41.062]and really be able to show us how you intend
[00:44:44.380]to market that crop and what's your outlets are.
[00:44:47.090]And who you've talked to already to this point,
[00:44:49.407]instead we can, we can vet some of that
[00:44:51.960]and we can have a little bit of comfort level
[00:44:53.740]in knowing that, you have a plan for where you'd be able
[00:44:57.379]to market, that crop or that commodity,
[00:44:59.524]that you produce.
[00:45:00.550]And so again, that might be an aspect of where
[00:45:03.810]that micro room comes into play.
[00:45:06.552]And maybe we don't jump on board,
[00:45:08.360]again with a lot of risks,
[00:45:10.330]but if we can, it's a smaller operation
[00:45:12.573]that we can start off small and specialized
[00:45:15.170]and it's low risk.
[00:45:17.419]Again, if you can show a viable plan
[00:45:18.923]and you've got that homework done
[00:45:20.960]and we can see there is homework done as far as production
[00:45:24.160]and marketing and things.
[00:45:25.520]In general speaking, we're willing to take a risk,
[00:45:28.732]because that's in large part, why we're here.
[00:45:31.620]Thanks, Ben.
[00:45:32.820]We'll go pick up Steve.
[00:45:34.240]I'm not sure your mic was, was working.
[00:45:36.744]I have a couple of questions,
[00:45:39.190]you know today we learned from Greg
[00:45:41.130]that when you're an entrepreneur, sometimes you,
[00:45:45.580]you have to make some money on the side just to live.
[00:45:49.990]So, my first question to you is, well,
[00:45:53.410]what are you gonna do on this side
[00:45:55.330]So you can meet your living expenses?
[00:45:58.140]So do you have,
[00:45:59.250]I have another question too.
[00:46:01.230]I do work, I actually do generally lawn irrigation.
[00:46:09.820]So you won't, your loan won't have to fund
[00:46:13.480]any living expenses?
[00:46:14.800]So what is the purpose of your loan?
[00:46:17.330]Is it to get the play up producing?
[00:46:22.812]Is it to install and produce, get your plants in production?
[00:46:27.938]Yeah,
[00:46:28.836]so our big issue is like,
[00:46:30.130]I'm bringing up my parents' land right now
[00:46:31.760]cause I'm only 28, I don't have any farmland of my own.
[00:46:34.750]So I would have to buy land,
[00:46:37.130]I would probably have to live on that land too,
[00:46:39.460]so it would need a house.
[00:46:41.160]And then say we still have to put up trellis
[00:46:44.300]and get our plants in, and then have all our,
[00:46:46.240]of our operating costs on top of that.
[00:46:49.660]And it takes how long for a plant to start producing?
[00:46:55.210]So for us, we'll get a 10% of the crop the first year,
[00:46:58.984]and then you bought your four we kind of level
[00:47:02.600]off to about normal production, right?
[00:47:06.880]And then how long will the plant produce
[00:47:09.950]once you get up to full production,
[00:47:12.330]They're perennial.
[00:47:13.190]So as long as you take care of the plant, they,
[00:47:15.660]we never need to replant.
[00:47:17.780]So from a lender's perspective,
[00:47:20.377]what I will need to plan for is to make
[00:47:24.280]a capital loan each of the first three years.
[00:47:28.990]And hopefully maybe you can scrape up enough
[00:47:32.057]to make a little interest payment,
[00:47:34.099]if not at the end of the fourth year I would look at
[00:47:40.420]not necessarily matching my loan terms to the plant life,
[00:47:45.830]but I'm gonna say a 10 year repay after,
[00:47:49.530]after four years is probably about where you would
[00:47:52.936]be on that.
[00:47:54.630]So in that scenario, what I would basically do
[00:47:58.390]is I would go to my friend, Ben,
[00:48:01.530]and I would sell your idea to Ben.
[00:48:05.500]And we would structure a loan program to accommodate you
[00:48:10.090]again, the public private partnership between
[00:48:14.270]whether it's a commercial lender or whether it's
[00:48:16.790]farm credit services through the FSA.
[00:48:19.737]And then they'll help us mitigate the risk.
[00:48:23.350]So thank you.
[00:48:25.130]Yeah, it almost feels like we're ready
[00:48:28.350]to have an open bidding process for your business, Greg.
[00:48:31.720]So maybe after offline,
[00:48:33.645]he should engage with these four individuals.
[00:48:36.570]So is it shark tank? I don't know.
[00:48:39.560]It feels all of a sudden like shark tank.
[00:48:41.840]Thanks Ben.
[00:48:43.090]Let's go to our next question.
[00:48:44.930]Thanks Jesse.
[00:48:46.810]Good afternoon.
[00:48:48.270]My name's Robert Carl, and I'm in the process
[00:48:51.090]of buying our small family farm from my parents,
[00:48:53.639]just north of St. Edward.
[00:48:56.020]And a little, little backstory going into the question,
[00:49:00.030]just kind of, so where I'm coming from here back here,
[00:49:03.050]in the early eighties parents had their loans through
[00:49:07.810]the PCA out of Albion and there was a year we,
[00:49:13.120]we owned two quarter sections rented a third quarter section
[00:49:17.090]and one bad year flooding, low commodity prices.
[00:49:21.320]There was a loss on that rented ground.
[00:49:23.630]And the PCA that year decided, Hey, anybody with a loss,
[00:49:28.480]we're calling them out.
[00:49:29.710]We want our money.
[00:49:31.080]And they went into the office and kinda talked with the guy
[00:49:35.740]a little bit, and had a whole stack of papers
[00:49:38.780]and said, "it's not just you, we're going through,
[00:49:43.580]getting it from a lot of people."
[00:49:45.610]So my question is that over and obviously it's been
[00:49:49.700]almost 40 years now since that happened.
[00:49:52.580]Are there laws, regulations, whatever in place
[00:49:55.440]to kinda keep that from happening,
[00:49:58.140]not just to the people that have been established,
[00:50:01.780]but especially like right now with the newer people,
[00:50:04.810]or was it just simply, the one organization
[00:50:10.200]that it happened to, or is it something that can happen?
[00:50:15.430]Well, I can attempt to answer that.
[00:50:19.400]My first year in banking was 1985.
[00:50:22.842]So I saw that.
[00:50:25.490]I'm gonna speak the positives.
[00:50:27.510]I'm gonna look at today first of all.
[00:50:31.020]Today, a beginning farmer has lots of options for financing.
[00:50:37.660]we're a community of 5,500 people.
[00:50:40.770]We have six commercial banks,
[00:50:43.410]we have a farm service agency service center,
[00:50:48.460]and we have a very active farm credit services
[00:50:51.330]within our area.
[00:50:52.310]So there, there are lots and lots of options
[00:50:55.210]now just because there are lots of options,
[00:50:57.420]the entrance is much more difficult.
[00:50:59.550]So I'm gonna go back to 1985.
[00:51:03.080]In 1985, there were two commercial banks in Chadron.
[00:51:08.250]One of them was kicking loans out as quickly
[00:51:11.460]as what we could take.
[00:51:13.080]Because we had our footon the gas.
[00:51:16.010]We apparently had pretty good vision
[00:51:19.170]that maybe we're starting to come out of this.
[00:51:22.840]it's back in that day,
[00:51:24.240]we could finance 70 to 80% of a purchase price
[00:51:29.490]and actually get something to cash flow.
[00:51:31.600]Now, it takes maybe 60% equity in order to secure cash flow.
[00:51:38.770]So there were two banks,
[00:51:42.850]there was a also production credit association
[00:51:46.210]that was having some issues and they were also rolling out.
[00:51:51.070]So, I'm not gonna say history has a tendency
[00:51:56.070]to repeat itself, but I think the banking industry
[00:51:59.540]and farm credit services, we learned a lot
[00:52:02.162]from those times.
[00:52:04.560]We learned that case flow repays loans,
[00:52:08.420]and unfortunately it, it takes some capital in order
[00:52:12.110]to cash flow.
[00:52:13.940]And that's what we've learned is you have
[00:52:16.940]to look at what is the repayment capacity of a loan,
[00:52:21.020]and if we all stick to those principles,
[00:52:26.210]our customer will be just fine.
[00:52:28.100]And that's, what's most important is our borrower
[00:52:30.680]and our customer.
[00:52:33.480]Yeah, and I would say at that time,
[00:52:36.410]maybe we were more collateral lenders versus
[00:52:39.470]today we have sustainable lending limits in place.
[00:52:43.420]And so on real estate, we have a limit on what percent
[00:52:48.530]or what dollar amount that we can lend on ag real estate.
[00:52:52.400]And so we maybe we're lending higher
[00:52:55.120]than we typically would today.
[00:52:57.080]And had been collateral lenders versus
[00:52:59.600]now it's a whole package, five C's of credit
[00:53:02.180]and taking into account their sustainable lending limits.
[00:53:07.050]And if I could chime in as the regulator
[00:53:10.470]because I started in 82,
[00:53:13.220]so I know exactly what you're talking about, Steve.
[00:53:16.920]And there's no question the lending community
[00:53:19.890]as you speak, let down the farmer at that point.
[00:53:24.540]And as a farmer, I've reminded our institutions of that.
[00:53:29.180]And you're right.
[00:53:30.060]We've taken a lot of precautions since then in the way
[00:53:34.330]of capital, to be able to withstand those tough times
[00:53:38.640]Our mission, but I think it's a mission with
[00:53:40.680]many commercial banks is to be there in good times,
[00:53:43.120]as well as bad.
[00:53:44.500]Which means conservative lending practices,
[00:53:46.900]which means saying no occasionally, right.
[00:53:49.930]But hopefully we've learned some lessons
[00:53:54.640]from those unfortunate years, 40 years ago.
[00:54:00.224]But history can repeat itself.
[00:54:01.760]Keep in mind that the eighties,
[00:54:03.900]we keep talking about the eighties,
[00:54:05.290]but it was preceded by an unparalleled period of prosperity,
[00:54:10.700]starting to land in the late sixties
[00:54:12.610]and going through the seventies.
[00:54:14.400]And so lending standards were dropped
[00:54:17.530]and there was a lot of lending
[00:54:20.730]and it is a concern of mine
[00:54:22.360]as farm lending continues to rise.
[00:54:26.100]Interest rates are low inflation, right on the horizon,
[00:54:30.000]interest rates generally follow inflation.
[00:54:33.600]It's something to keep in mind of both the lenders
[00:54:36.360]and the borrowers.
[00:54:38.050]Does that help kind of address your question?
[00:54:42.787]There is a great question.
[00:54:45.610]We're bumping right up here against our hour already.
[00:54:48.960]It seems hard to believe,
[00:54:50.160]but I wonder if the four of you could speak
[00:54:53.740]to educational programs specifically designed for young,
[00:54:59.410]small and beginning farmers and ranchers that you'd like
[00:55:03.410]to you'd like everyone here to know about such
[00:55:06.930]that they could engage so less about the lending
[00:55:09.760]and the, those programs and more about the education,
[00:55:12.910]what to be thinking about what do you offer
[00:55:15.560]in terms of that, those platforms?
[00:55:19.610]So yeah,
[00:55:20.443]I guess with us it's important.
[00:55:23.080]We always encourage any of our customers
[00:55:25.970]and any of their kids to stay involved in their community.
[00:55:31.160]you're probably never gonna start out working
[00:55:33.600]in the same exact position that you'd like
[00:55:35.710]to end up. Right.
[00:55:36.810]And so the more connections that you have just
[00:55:41.210]compounds your ability to end up where you, working towards.
[00:55:47.465]I think as far as we'll, we'll have guest speakers
[00:55:51.500]come in we'll have lunches dinners we'll invite everybody
[00:55:55.940]that we think would be interested in that specific topic
[00:56:00.410]to meet up and do do some discussion.
[00:56:04.610]Again, as far as, as being involved goes
[00:56:10.410]just try to be involved in your communities.
[00:56:15.550]Push for your school board, be involved with your excuse me,
[00:56:22.540]what's the anyway ,Nebraska lead program,
[00:56:27.899]That's a great one.
[00:56:31.490]Future farmers of America, I guess that kind of thing.
[00:56:35.460]I think i'll just lets you move on from there.
[00:56:39.074]One thing I've I've learned is that
[00:56:43.290]this next Generation is they're different
[00:56:48.320]in a good way.
[00:56:50.110]The next generation knows how to take this
[00:56:53.340]and solve problems.
[00:56:54.540]So you really have a heads up, you can grab this device
[00:57:00.130]and within minutes, you know how to mine information.
[00:57:04.170]So I think you're going to be learning
[00:57:07.629]how to use, utilize technology to solve problems.
[00:57:12.370]Now there becomes a point in time
[00:57:14.010]where I still don't believe
[00:57:15.520]that technology can replace the human mind.
[00:57:18.780]So you'll take this and you'll solve,
[00:57:21.214]you'll take the problem solving exercise
[00:57:26.080]as far as you can.
[00:57:27.280]And then you need to find the human interaction.
[00:57:30.520]So you need to come to the bank.
[00:57:31.960]You need to come to the farm service agency.
[00:57:34.460]Extension is a resource out there that they're,
[00:57:37.982]they're always standing and waiting and reaching out
[00:57:42.800]to help solve problems.
[00:57:44.370]So this device is a powerful way to solve problems
[00:57:48.790]if it's used correctly.
[00:57:50.120]Great.
[00:57:51.143]Brandy, we'll jump over to you.
[00:57:52.070]And then Ben, last word on this question
[00:57:54.567]and we'll wrap it up here.
[00:57:56.710]Yeah.
[00:57:57.632]We have internal education that we provide.
[00:58:00.450]We actually have a customer education team
[00:58:02.760]at farm credit services of America,
[00:58:04.360]and they facilitate a three- day conference for our young
[00:58:08.127]and beginning specifically that are for producers
[00:58:12.130]that fit within that segment.
[00:58:14.140]We have webinars that we do monthly
[00:58:16.380]and then we also have some self guided learning
[00:58:18.940]that producers can do.
[00:58:21.620]And then we also invest in Annie's project
[00:58:25.670]and for a FFA the ambassadors program,
[00:58:29.050]those types of external educational opportunities
[00:58:32.670]for producers as well.
[00:58:34.300]Great, thanks Brandy.
[00:58:35.240]Ben ,
[00:58:37.539]Have to say,
[00:58:38.372]I mean, we don't have anything that we specifically
[00:58:40.420]offer for education, but I would just say in general,
[00:58:44.240]and the recommendation is it's been
[00:58:46.580]touched down throughout the day.
[00:58:48.950]I grew up on the farm in the eighties
[00:58:51.722]and early nineties and,
[00:58:52.555]I value hard work as much as anything.
[00:58:55.700]And there was a time that you really,
[00:58:58.003]I think a farmer rancher
[00:58:59.940]could almost rely solely on hard work and that was gonna
[00:59:03.594]be a significant determining factor in whether
[00:59:05.690]that operation was successful enough.
[00:59:07.730]And again, hard work is still vitally important,
[00:59:10.792]but we've seen ag move to such a,
[00:59:14.170]a business space, animal now.
[00:59:16.970]And so you can be the hardest worker in the world,
[00:59:20.680]but if you're not good manager
[00:59:21.820]and you're not a good marketer,
[00:59:23.160]all that hard work can go by the wayside very quickly.
[00:59:27.310]And so be someone that is constantly educating yourself
[00:59:31.070]on the marketing, opportunities that,
[00:59:33.980]that you have available to you.
[00:59:36.885]Take us talk about taking leadership and management courses,
[00:59:40.526]take communication courses.
[00:59:41.800]The number one thing I can tell you
[00:59:43.600]when it comes to dealing with a lender is communication
[00:59:47.260]and the more distressed your operation is
[00:59:52.030]and when you're struggling, the more important
[00:59:54.103]that communication is because when the communication
[00:59:56.630]starts to break down that's when the trust starts
[00:59:59.740]to break down and that's when, understood like maybe
[01:00:03.200]the only option is to move the person on or for pools
[01:00:06.440]or something like that.
[01:00:08.360]They can have that communication made as a part of it.
[01:00:11.710]that trust remains part of it, generally speaking,
[01:00:16.510]a lender or FSA or anybody is gonna try
[01:00:18.760]to bend over backwards in order to keep you
[01:00:21.000]on the farm or the ranch.
[01:00:23.170]And so I would really just challenge you
[01:00:26.330]to never stop learning. even if you're somebody that,
[01:00:30.380]you're gonna take over the family farm branch outs
[01:00:34.040]just the amount of technology that's an agricultural day
[01:00:36.766]and where that's gonna go in the next 20 years.
[01:00:40.690]every day is a new learning opportunity.
[01:00:43.480]Thanks, Ben.
[01:00:44.313]So every day is a learning opportunity.
[01:00:46.830]Lets express our appreciation for this team .

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Young, Beginning and New Farmers Symposium resources panel

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