-: She is responsible for strategizing
and coordinating impactful education,
and valuable products to best serve young,
beginning and small producers in Nebraska,
Iowa, South Dakota, Wyoming, and Eastern Kansas.
Prior to her role, Brandy served in various sales
and training positions at Farm Credit Services of America.
Brandy and her family live in Northeast Nebraska.
Where exactly? Brandy: By Clarkson.
-: By Clarkson, where they have a cow/calf operation.
Welcome, Brandy. Brandy: Thank you.
-: Our second panelist is, Ben Herink.
He's with FSA/USDA.
Ben is a Farm Loan Specialist,
for the USDA farm service agency
in the Nebraska state office here in Lincoln.
Ben has worked for FSA for 15 years,
and during this time, served as the farm loan manager
in Hastings for six years, and prior to that office.
So, a couple of different places here in Nebraska.
Ben grew up on a family farm just located southeast
of Leigh, Nebraska in northern Colfax County.
He graduated from the University of Nebraska
here in Lincoln, majoring in Agribusiness.
Ben, his wife Dusty, have three daughters,
and they live in Lincoln.
Our third panelist is Steve Cleveland.
Steve is the senior vice president for Homestead Bank
in Chadron, Nebraska.
It's completely coincidental that the bankers
are on this side with me, okay?
A little bit of fun there, Glenn.
Steve is the boots on the ground agricultural lender
serving a very remote customer base.
He understands the importance that beginning, young,
and small scale farmers and ranchers play in keeping
and enhancing the vitality of our rural communities.
And then, finally, our fourth panelist is Tom Kelly.
Tom is from Western Bank.
Tom grew up in Sutherland where he currently lives.
I think that's about as far as you can get before we move
to mountain time. -: It's right there.
-: I think that's right.
He's involved in a fifth generation
family ranching operation.
He currently serves as vice president
of Western Nebraska Bank and works at the Paxton branch.
Tom graduated from the University of Nebraska Lincoln
with a degree in agricultural economics.
And so, as we've done previously,
if you wouldn't mind sharing just a little bit more beyond
what that short bio did.
And then we'll jump in.
-: Okay, yeah.
Hello.
Tom Kelly, Western Nebraska Bank.
I've got a...
I feel like I've got some unique thoughts that I can bring
to this panel.
I am directly involved with a family cow/calf operation,
which is managed by my brother.
And I've been in banking about seven years now.
Western Nebraska Bank is an agbank,
but we do also provide all other services and loan options.
We, you know, so I'm based in Paxton.
And there's about 600 people in that town,
so we're always striving to gather new
loan customers, deposit customers,
and also retention is a very, very big thing out there.
We spend a lot of time focusing
on our customer service prospective, basically,
just because we can't afford to lose anybody.
And so we wanna keep every happy.
And, you know,
that includes aiming for and shooting for new
and up-and-coming people involved in the ag business.
Any venture, really, we'll take a look at.
And we'd love to talk to you.
I guess that's just a short bio edition.
-: Thanks, Tom. -: My, excuse me.
My name is Steve Cleveland.
I'm senior vice president of Homestead Bank in Chadron.
Paxton, the thing I like most about Paxton is, time-wise,
when I pass Paxton going back home, I'm halfway home.
Moderator: And I thought you were gonna say Ole's, but...
-: No, we're remote.
Our customers primarily run cattle to harvest grass.
The grass is turned into protein.
We ship those cattle back to Joe over there,
and he fattens them and puts a little flavor in them.
And then they hit the marketplace.
I've been at this for about 36 years.
I was very lucky.
I attended University of Nebraska when I was,
I think, a junior.
I had ag finance, and the class really was very easy for me.
So I found my spot early in life, and I've,
it's been extremely,
I've been extremely blessed to be a banker.
Those of you in here that are maybe aspiring
to be an agricultural lender, go for it.
Just, like, share a couple stories.
You have an opportunity to impact lots and lots of people,
and just this fall I was reminded of a couple that,
customers, that told me how maybe our bank impacted them.
One, kind of a chuckle, he was,
I think he and his buddy were about 16 years of age.
And the one (indistinct) kid had a fat cattle, and he said,
"You remember when you loaned me the money?"
You know, 16 years of age.
Couldn't legally sign a loan document.
I said, "What the heck?
I'm gonna loan you the money."
They came in about 180 days later to settle up,
and I asked them how they did.
And they said, "Well, they make 60 bucks a head."
That was the worst thing that could've happened.
Make money on your first turn of fat cattle, so he said,
"Do you remember what you told me?"
I said, "No."
He said, I, he said,
"You asked us what are we gonna do next."
And he said, "Well, I'm gonna buy 100 head."
And he said,
"You told me to get out of my office,
out of your office now."
Get out of my office.
But anyway, this impacted this young man.
He, now he runs about 900 head of feeder cattle.
That's about 500 cows, feeds about 300 head of cattle.
And, you know,
because of these relationships you build and you build
and you build,
you give somebody an opportunity that started out
with 10 head of fat cattle.
And you get the satisfaction of seeing them grow
within your communities, so on and so forth.
Now I had another customer this fall.
I was out west when we were remote customer base,
probably our average customers maybe within outside
of 50 miles of Chadron.
So we spent a lot of time on the road,
so I see a fuel pump which I'm at quite often.
On the other side of the fuel pump,
I had a rancher that said,
"Hey, Steve, I was thinking about you the other day."
He said, "You know, I was, in the first few years
of my operation, I had this little construction company,
a little sideline that would help put money on the table
so I could enter the cattle business."
And he said, "You know, we needed to buy supplies and stuff.
And you introduced me to a line of credit."
And he said,
"You know, I never really understood
that you could use other people's money to make money.
And, you know,
it's just those little things that you take for granted,
as being a community banker,
you can help people understand that, hey, that's how,
particularly, banking works.
You take in deposits.
You take those deposits.
You loan them back out,
and it helps your community grow, to grow.
So just, with me,
I wanted to just go over some statistics
and numbers regarding the community banks and the impact
that community banks have on Nebraska.
Banks nationwide make about 80%
of agricultural operating loans.
Nebraska banks make 10% of the nation's operating loans,
so Nebraska is, the banking community is very, very active,
particularly with operating loans.
There's 160 commercial banks with over 1,000 locations
and 15,000 employees, so there's lots of us out there.
Banking, starting a business, requires human interaction.
So there is a army of bankers that are, that are out there.
Once, I think that bankers, of course,
will play an important role to help new entrance
into this business if we get organized
and we put our mind to it.
For instance, the PPP loans, our bank community made over,
let's see, 114,000 loans.
And we put $5,000,000 to work, so getting organized,
we have lots of interest
in Nebraska, particularly agriculture.
It's our livelihood.
Homestead Bank, we're an agricultural bank.
We hold about $70,000,000 of capital.
Our agricultural loans are about $200,000,000,
so we're very highly concentrated in agriculture.
We live and die by agriculture,
so how we survive is to help the new entrants get
in the business.
So we have quite a stake in getting and helping the business
as particular agriculture businesses get established all
across Nebraska, so those are the highlights.
-: Great.
Thanks, Steve. -: That's me.
Moderator: Great, and we'll come back to you all
in a second.
Ben, you're next up.
Can you hear us okay? -: I can hear you.
I guess I should ask can you hear me?
Moderator: We can hear you.
Absolutely.
You're larger than life here, Ben.
-: I appreciate the chance to join y'all.
I regret that it can't be in person.
I so wanted to be there today,
but we make do of what we can so that,
I appreciate the flexibility, you know,
in your staff and your team,
the individuals that made this happen.
So, unfortunately, the audio is working initially.
So I haven't heard about the last three words of my bio,
Vice Chancellor Bane.
But, luckily, those were, when you talk about my job,
those are the most important parts of it.
So the rest of it is kind of immaterial.
I'll kind of expand, I guess, a little bit.
Tom mentioned, you know,
he has got a uniqueness he brings to us.
And I think that's, from my perspective, you know,
I've been working for Homestead for 15 years.
And I've been lucky enough, I guess,
and fortunate enough that I've spent, you know,
almost a half a decade, you know,
as a loan officer and an officer off in Ogallala.
I spent six years, you know, in Hastings.
So I got to learn, kind of,
that South and central part of city and the culture there.
I was born and raised, you know, in Northern Colfax County.
So I've got that low case roster perspective,
and then I spent the last four or five years, you know,
here in Lincoln in our roster state office kind of as more
of a specialized and policy and management standpoint.
So I got to see a lot of different sides of that
and the United States and the diversity of state
over the last 15 years, you know,
specifically about the farm service agency.
And I know you've heard, you know, Epistate mention, I know,
in section one, I was listening, you know.
And there's been discussions of pom pom service agency,
and we play a neat role,
kind of what I like to call the end credit,
you know, pyramid.
And, really, that's, you know,
the majority of the precursor
that we're able to help are really, you know,
beginning farmers and ranchers and, specifically,
here in Nebraska.
You know, we look at this last year and kind
of the last decade.
About 70% of the loans that we make are on able basis.
Go to beginning farmers and ranchers,
not somebody we consider to be
in their first 10 years of operation.
So I really think we fit the theme of what we're talking
about here today on, specifically, in Nebraska.
You know, FSA has 71 offices.
And so we provide assistance to every county in the state.
From a farm loan perspective, we have 21 offices.
And so each one
of those farm loan offices typically helps anywhere
from four to five Philadelphia counties.
You know, we're in trade centers with, you know,
different areas of the state geographically.
And, you know, our primary mission, you know, is,
this comes from the farm bill and from Congress.
We're a member of a agency
of Department of United States of Agriculture,
so we're funnel advance team.
And our loans are, you know, subsidized by Congress.
And so, with that, we have subsidized interest rates.
But we're also able to, as a federal entity,
be able to take on more of this, you know,
VG have a clientele that we're able to, you know,
provide longer terms for, fixed rate financing.
We're not in competition with Jerusalem.
I know many of the panelists that we have on here today,
you know, we work with them.
Our job is really to get a loan preser to a point
that we can graduate them or move them on for credit
for funnel cake.
That's a successful, you know, model for us.
We also have those borrowers that come to us who may be
about 34 period of time.
You know, we all know how ag boom years.
And there are gonna be some bust years in there.
And so when you do get those distress ballers who have been,
you know, producing for a long time but are suffering
from some, whether it's blood related events,
trade we talk about and just need a chance
to just get their feet back under them,
maybe re-organize their debt a little bit
and some loan fixed rate finding, you know,
and get them back on their feet,
get that cash flow positive again and get them back on
to the credits.
You know, within FSA, we have, you know,
safety net programs.
We have disaster system programs.
We have conservation type programs.
But in the focus of today and what my background is in,
it's all fun daman programs.
And so, you know,
we operate much like an ag bank from credit.
We got op program.
We got loans for any type of operating loan, whether it's,
you know, input financing,
whether it's purchasing machinery, purchase of livestock,
you know, fee FC kind of, all that good stuff.
And then we have,
we call it farm ownership and real estate program.
You know, we can make loans and purchase real estate or,
you know, make capital improvements on that kind of thing.
So we're a large lender nationally.
You know, our portfolio is about 14.3 billion from what,
from directional standpoints.
Those are loans that we make and service in-house.
We've also got kind of a separate entity.
We call it a guarantee loan program.
And that's where, essentially,
we back loans that never runs or comes to us,
guaranteed from lingerie bank,
naturalized in over 17.5 billion dollars nationally.
So Nebraska, you know, obviously, we're a well-back state.
You're in and you're out nominations, meaning, you know,
beggers of loans within FSA.
I think just in fiscal year, 2021 alone,
we've made over 1,700 grant loans across the state
for just over $273.
So we've got a great mission from Congress
that we're tasked with.
We're really that lender of first opportunity, you know,
in times that, when you're a last resort as well.
So, you know,
it's our job to kind of either know that base and help build
that acrity from a national producer or to read
that inequity in times of need.
So I know this is probably how to follow Steve's, you know,
stories, good stories.
I happen to know Steve quite well.
I grew up pretty near to Granny,
and so I had a Fa Mulan muscle town here today.
So with that, I appreciate the invitation.
Moderator: Yeah, thanks, Ben.
And with that, we'll jump over to Brandy.
-: Thank you.
Yep, I'm Brandy Ballser.
I live in Northeast Nebraska, so near Clarkson.
And my husband and I
and three daughters have a cow/calf operation.
We have about 60 cow/calf pairs,
and I went to a farm credit services of America for
about 14 years.
And during that time, I've been in various roles.
So whether it's lending officer or consumer lending,
I've been in different sales service, talent management,
or development roles.
But now I currently lead our young, beginning,
and small program that we have
at Farm Credit Services of America.
And that program really is focused
on providing specialization to our producers,
providing education, and products.
And at Farm Credit Services of America, we have,
about 44% of our producers are young, beginning, or small.
And 18% of those have risk management with us,
so that's livestock, insurance,
or comp insurance, hail insurance.
And so in our, with that 44%,
we realized that we really needed a program
that was focused, specifically,
for how we can develop our young, beginning, and small.
And so in our program, like I said,
we have this specialized role.
It's in Bens, our financial officers,
customer education, myself.
And we help to provide one-on-one education,
or one-on-one relationships with those producers.
And then in the education,
we have specific education that we create
for our young and beginning.
And that's from feedback from those producers as well as
from the feedback from the financial officers on
what would they like to see in education.
Is it transition planning?
Is it risk management?
What would they like to learn about
to make their operations most successful,
and then our products are another important piece
to our young and beginning program.
We have, as you heard earlier today,
we have a development fund that helps our producers.
And that can help them with working capital,
with breeding livestock,
or that also is for contract finishing facilities.
And we also have an ag start program, excuse me,
for our young and beginning also.
So it's really important to us that we're a part
of the future of agriculture and helping our young
and beginning, and one of our leaders will say,
"We wanna work with people that want more than just a loan."
They don't want a loan and to be left alone,
and so we really focus on spending time to provide more
of a package to our producers
through education and products.
-: Yeah, thanks, Brandy.
You know, this is, this,
I've been looking forward to the whole day.
But in particular,
this panel because it brings the diversity
of opportunities lending coaching risk management
from Farm Credit Services of America with FSA and
with the commercial banking platform.
So I just did a crude check,
probably close to 80 years worth of experience
with these four panelists working directly with young,
beginning, and small farmers and ranchers.
So really looking forward to hearing more
about the specific programs.
Glenn, I'll kick it over to you.
-: Okay.
Thanks, Mike.
Before we set that line of demarcation up
between the commercial lenders and farm credit,
let me tell you about my ag senate confirmation hearing.
And in it, the senators, primarily from ag states,
wanted to know my background with financing.
And I said,
"You know, I've worked with commercial,
or local commercial banks.
We've had loans bundled with Farmer Mac.
We've all worked with Farm Credit Services,
Farm Credit Services of America represented here today."
And I said, "I believe in alternatives.
I don't have any one entity.
I believe in the farmers and ranchers having alternatives."
As a hit back in the 80s, I asked my grandma for a loan.
And she turned me down,
so we didn't have a good credit risk, right?
But the important thing was I had somebody that reached out.
My wife and I had somebody that reached out and developed
that relationship with us early, and that fosters my belief,
strong belief, in those relationships.
And I know it happens in commercial banks, community banks,
as well as farm credit.
So just to let you know a little bit about my background and
what I'm all about.
I believe in alternatives for the benefit of young
and beginning farmers.
-: So this morning we had a chance to hear from a group
of young, beginning, small farmers, ranchers, entrepreneurs.
And they touched on some of the programs that they tapped
into, but I wondered just if you could break down some
of the programs as a recovering plant pathologist.
It's more complicated than the
Institute of Agriculture and Natural Resources for me
and all the parts and the pieces,
so I wondered if you could maybe showcase or highlight,
especially for those in the audience and those listening.
You know, what are some of those programs?
And each of you are, each of you are seers that young,
beginning, and small farmers and ranchers bought
to be considering as they go about their journey.
-: Yeah, well,
so again with Western Nebraska bank,
we work directly and indirectly with the farm service agency
and also the small business administration.
As far as our business goes,
we're only successful if you're successful.
And so, we try to do everything we can
to help you get yourself to the position
that you need to be in order to be successful again.
But, there's a lot of paperwork involved
with the farm service agency.
There's paperwork involved with banking as well, but,
one thing that I'll do,
even if I'm unable to successfully bank a young
and beginning farmer rancher,
I'll go through some of that paperwork with them.
And I'll begin building that relationship right there
when they walk through the door.
If they need to go to FSA and do direct lending,
that's perfectly fine with me.
I want them to take advantage of every option
that they have in order to create a profitable business.
And so again, I'll begin building that relationship,
spend time with that customer maybe send them down the road,
but hopefully, when they do graduate from those programs,
they'll be able to come back
and I'll have a future with that customer.
-: Well, I did make a few notes from the panel this morning.
I actually was more interested to hear what
the beginning farmers had to say then maybe,
what I had to say.
So, I'll just touch on a couple of my takeaways
as I drive back to Chadron this evening,
Grant, don't be afraid to be told no,
I think that was really a good point.
One of the biggest regrets in my career
are those times I said, no,
Because, I really never learned what the outcome could be
if I said no.
So, over the career, by sitting down with farmers
and ranchers, particularly beginning farmers and ranchers
who had new ideas, over time we learn how to ask
the right questions.
So I remember saying, well, you've gotta remember I started
and in this business just as we're coming out
of the ag crisis.
-: So we, we were pretty well taught how to say no.
So within the first 10 years, I said no a lot.
And I'm saying in the last 25 years,
I can't remember the last time I said no,
because I learned how to ask the right questions
and tried to pull that information out of
the inspiring farmer ranchers.
So that they could learn, from again,
just the questions never gave them the answer.
So, I don't remember the last time I did say no,
or actually denied a loan.
So just interacting with the customers is probably
the biggest program that community banks would have.
We've learned to leverage farm service agency.
It is just one of the greatest public-private
partnerships in America,
because what sets the USDA/FSA apart
is that they actually care.
That's an agency that cares.
And this came from Richard.
I remember you, telling me that one time, Richard,
that they just care.
So trying to get people with people who care
is probably that the number one.
-: Great.
Awesome.
Ben,
[Inaudible]
-: Hold on a second Ben, they're trying to get,
there you go.
We didn't hear it.
-: You hear me? -: Yeah.
We were reading your lips there for a moment but,
-: Well, that's never a good thing
-: The FSA, you know, really beginning farmers,
small producers that's really our niche.
That's really our focus on our lifeblood.
And we've got some specific programs that really
are centered around that.
So again, we work as has been said here on the panel,
We work in participation with lenders, with farm credit.
A lot of times an applicant or bar that we have
is also getting other financing through
Marshall lender or farm credit.
And so we oftentimes do that joint finance role.
One of the benefits that FSA has,
that sometimes aren't available in commercial sectors,
number one, we've got, as I mentioned,
lower subsidized interest rates.
So if you don't have that ability
to get that for commercial credit that you're looking for,
that's kind of where we come into play.
-: Our interest rates are fixed.
And so, that provides you some stability
and lowers that risk over time.
If we take this maybe breeding more livestock
or machinery equipment tag purchase in a lot of time,
maybe, if you're out a commercial bank,
or maybe if it's dealer financing, you're gonna be limited
to a three or five- year term.
We have that ability on reading livestock
and share equipment to extend that term,
that loan up to over seven years,
Again, with lower interest, a longer term,
freeing up that cash flow, which,
a lot of times for a young producer,
that they've got quite a term that,
they've got to be able to cover.
Being able to free up some,
some income in that cashflow, allows them to expand
in some areas.
But just reduces the stress on that on their cashflow
of real estate.
If we're looking at something in- house,
or even in partnership with with this fitting lender,
we can stretch our real estate loans out to 40 years.
Which again, when you take a low fixed rate financing,
I mean, today interest rate is 3% number.
You know what am saying,
if you had the ability to stretch that out over 40 years,
again, you create that flexibility in your cashflow
to be able to meet some of the other goals
that you might have in your operation.
We are limited in size and scope of we you can help.
If I take the farm ownership real estate program,
for example, we're limited to $600,000 FSA.
And so, I know that that man's Atwater question earlier,
we know what groundbreakings,
if you're in some of our properties in parks the stakes
you can see, most ground overwhelming million dollars.
And so, the great thing about what we can do is again,
by offloading some of that risk, maybe we can get work
with the same on your work with farm credit.
Whereas they make it's at $1.20 million deal,
they make the first $600,000, FSA will take a second lean
and come in at the other $600,000.
So we'd assume,
the majority of the risk that,
that's what we're out here to do.
Your loan still has to cashflow.
You still have to be eligible.
So we're still meeting that core underwriting criteria,
but we're allowing you to again, assume some risk
and otherwise credit that you might not be able
to strictly have commercial creditor.
So we don't need any down payment ability.
Most our loans, if we can get to a hundred percent security,
so one- to- one.
Again, if you meet all the other aspects,
typically we're able to do the deal.
-: So again, we offer that flexibility that length
of extension of terms, that lower fixed rate financing,
and ultimately that should help just helps the cash flow.
One of the great programs that we have
in the real estate side of things
that I guess utilize quite a bit,
you hear about it sometimes, it's called a 50-45-50 loan.
You're referred to it
as a first time a farmer loan.
And what that is if you do have the ability
to make a 5% down payment, which again,
we know that's not the case and that wouldn't exclude you
from some other programs that we have,
but if you do have the ability to make 5% down,
you can go and get 5%.
If you get the 5% down, the next 45%,
We would take on here at FSA up to a limit of at this time,
$300,150, but that rate would be 1.5% over 20 years.
And then the remaining 50% or greater you would go out
to commercial lender, farm credits and get the remainder
of that financing `to those institutions.
-: Again, FSA is taking that second lean.
So that helps you meet those, lending capacities
that the other lender might need in
that particular piece of ground.
You're able to meet that because FSA is providing that,
that additional financing.
Again, there's a lot of situations where
we may help with a real estate loan on a younger individual
or stress borrower, but maybe the banker from credit
continues to keep them as their operating lender.
And we see that quite a bit,
We see that relationship.
It's one more layer in process, but again,
I think as we're all talking about here today,
if we can create terms and success for our borrowers,
that's the ultimate mission, and there's nothing that I
take greater pride in or find greater happiness in
than watching a borrower young borrower
comes into our program and say,
we're able to help maybe transition to some joint,
commercial assistance at one point
or potentially a guaranteed loan.
But then at some point, transition that bar out for full
that they can develop that long- term relationship
with that wonder down the road.
And that's really the ultimate mission that the say
and again, we've got so many programs that help
beginning farmers and ranchers.
We also have what's called a micro-loan program.
Now it's limited to $50,000 on both operating type loans
and real estate real estate type loans,
but `it's a reduced application process.
It's a quicker process.
So if you're somebody that again meets that maybe
that real small and niche farmer producer operation,
that might be an area where,
there are some lenders out there that, again,
because of your smaller size and limited resources
they may not have the expertise or don't wanna get,
get involved in a farmer's market type project.
That's where we kind of see that micro room
pop up in the new potential play for some people,
rather than maybe taking your operation '
and having to lend it on high interest rate credit cards.
For example, you could turn around and run that on a 2%,
operating on FSA and try to build for operation that way.
So again, those are just some of the programs
that we have, I think are specifically more
to a beginning farmer or small farmers or actors.
But then one of the great aspects we also have at FSA
is our ability to refinance or restructure you in house.
Again, if you're not able to make your payments,
just all the tools that we have in our tool to be able
to refinance debt, to extend that debt, try to keep you
on the farm as long as that farm can project any viable,
that's really our mission.
-: Thanks, Ben, appreciate it.
One thing I'm getting a sense for is that
it's not one or the other, but a both and or a combination.
And the linkages amongst the lenders with different programs
to put a package together for that beginning young,
small producer, that best meets their needs.
Brandy.
-: Yeah, We are at farm credit services of America
and frontier have kind of two different areas
that we can serve the young and beginning
with our ag start program.
That's a broader program for those that are kind
of to Ben's point he had made earlier,
the USDA standards of young and beginning.
So 35 years of age or younger,
and 10 or less years of farming.
And so producers that fit within that come to us
and we provide them with a decreased interest rate.
The credit standards are relaxed.
So it offers them a little bit better option
to get their operation started, growing transitioned.
And then we have the development fund,
which I spoke to earlier, and that is based
on a business plan.
And so as producers put together a business plan,
we sit down them and go through that.
-: It's somewhat of an intense, more intense process,
but that's based more on character and a few other bits
of criteria versus Jeff's credit standards for them.
And we've financed, abroad,
variety of operations in that program.
And again, that one is not as broad as far as products,
the ag start is for line of credits, real estate,
installment, while the development fund is focused more
on that working capital, breeding livestock purchases,
and the contract finishing.
So that was just kind of the two areas
that bring the greatest value as far as programs
to our young and beginning that are focused solely
on young beginning.
-: Thanks Brandy.
Looking to you Glenn to see
if you wanna jump in there. -: Yeah, well,
I would like to particularly in speaking to Ben
on that critical importance of that FSA lender,
banking, lender, farm credit lender relationship.
Back idea was hatched with that time under secretary
Bill Northey, a friend of mine from Iowa at FSA
to bring together representatives from farm credit system
and the commercial banking sector,
the community banking sector in FSA,
and figure out how we could leverage the resources
of UFSA of you FSA loan officers to better
cut through the paperwork, cut through the red tape,
because that's kind of a common theme we hear
around the country quite frankly,
is the loan officers have a tremendous workload
in front of them.
And your boss Bill Cob there in DC, wholeheartedly says,
"If we can figure out how to leverage the resources
of these loan officers, we can go that much further."
-: So we did a virtual conference,
I know virtual believe me, I'm sick of them too,
but we did bring together all of the representatives,
including FSA, and we've devised the start of a plan
to try to customize that approach.
To try to cut down on the red tape,
you've got a preferred lending program, right?
That offers, I guess kind of a canned shortcut response
for lenders, which is of great help
in developing these loans for beginning farmers.
There's a common theme in my travels,
the more successful associations like farm credit services
America, team up on a regular basis with the FSA
guaranteed loan package.
It's a great fit.
It mitigates risk, and it mitigates risk
for limited resources and also the subsidized interest rate,
although interest rates, how low do you go at some point?
I think the real benefit is that lack of capital
with that beginning farmer, young and beginning farmer,
and being able to mitigate that with your
guaranteed programs.
So we had that virtual conference here last September.
I understand that FSA has taken off and sponsored
some conferences since then.
And I guess I would ask you,do you have any idea where
that's at right now within FSA?
-: Are you referring to what they've kind of turned
the beginning farmer-rancher Lennox summit group?
-: Yes.
This last September.
I'm actually a part of that -: good
on behalf of FSA, -: good.
And so we're taking on a lot of different areas,
but we've tried to dwindle it down and prioritize
some areas, modernizing, the FSA paperwork process
would be one, consistency and how I can say operates
is another important area.
Part of that ability to meet,
look and guarantee loans it's another area.
We've met I suppose, on a quarterly basis Jeremy Smith
over the last year.
I would say we're at the point where we're we separated
our groups and we were kinda bringing all our ideas
to the table here.
I think we've got another meeting next week.
And it kinda brings all the ideas
that everyone's been working on,
within their subgroups back to the table to where
we can start maybe talking about those with the departments
and hopefully to be able to make some headway
for implementing some of those down the road with this.
-: Well, that's great.
That's a good example of how we all can work together
is one Congressman I'll remain unknown said,
"Imagine that government agencies actually working together
and competitors actually working together to the benefit
of young agriculturalists."
So I'd sure like to see that continue
and I know that as far as the political support,
I'm convinced it's there.
-: Yeah.
So that's a fine point to really,
what I'm hearing you say Chairman is really
put a focus on the success of our young,
small beginning producers and work and do whatever it takes
to help them succeed.
So with that, let's let's open it up for questions.
I mean, there are a lot of young,
small and beginning farmers and ranchers in the room.
So do you have questions from a commercial lending
community lending aspect FSA or from farm credit services
of America's portfolio?
-: Okay.
So I know a lot of us young farmers are mainly into
specialty crops or, or doing that.
Do you know what experience you guys have with lending
to specialty crop growers who may not have a profit
for say the first three years?
Because like say me hops takes three to four years
to become a viable crop.
-: So Thanks for your question about covering that gap
from starting point to when you're profitable.
Do you mind sharing name and where are you from?
-: My name's Greg Jeffery?
I'm actually from here in Lincoln.
I grow on my parents' land out in Denton, Nebraska.
-: Perfect.
Thanks.
Who would like to?
-: We can just go down the line.
One thing that I think is really important is that you
completely and very thoroughly do your homework, right?
So it's important to put together a business plan.
There's places you can go, that'll help you do that.
I know I just, I'm familiar with my area the most,
but you can go to mid Plains community college
in north Platte and sit down, they have a free service
and they'll help you kind of piece that together.
And then obviously your, your college classes will help you.
But you need to understand the ins and outs
of a financial statement income and expense,
do a three- year projected.
The more information that you have,
and you're able to share with your loan officer,
it just really helps
that bad conversation, that process get going.
-: I have a question.
So in your business plan, well,
or - In your thoughts?
-: I would just say from an apple safe respect,
cause that's a, that's a great question.
No, we get involved in specialty, specialized operations,
probably a little more we obviously we've got resources
from across the country that even if it's not
something that maybe we're specific to or have a lot of
knowledge here in our state,
we've got resources throughout the country
that maybe it's a little more popular.
In other areas to glean off of, but Tom's discussion
a little bit that oftentimes we see individuals that can
come in with a good production plan,
but the marketing plan and how they plan to market
that specialty crop or that operation is lacking
a little bit.
And that I know you can get a lender's concern is,
we can see that you have the ability to show,
the ability to produce it, but sometimes, there's a shortage
in what's in that marketing plan.
-: So, that's one of the things I think that in context,
when you come in, if you are a specialized operation
its really come in having done your homework
and really be able to show us how you intend
to market that crop and what's your outlets are.
And who you've talked to already to this point,
instead we can, we can vet some of that
and we can have a little bit of comfort level
in knowing that, you have a plan for where you'd be able
to market, that crop or that commodity,
that you produce.
And so again, that might be an aspect of where
that micro room comes into play.
And maybe we don't jump on board,
again with a lot of risks,
but if we can, it's a smaller operation
that we can start off small and specialized
and it's low risk.
Again, if you can show a viable plan
and you've got that homework done
and we can see there is homework done as far as production
and marketing and things.
In general speaking, we're willing to take a risk,
because that's in large part, why we're here.
-: Thanks, Ben.
We'll go pick up Steve.
I'm not sure your mic was, was working.
-: I have a couple of questions,
you know today we learned from Greg
that when you're an entrepreneur, sometimes you,
you have to make some money on the side just to live.
So, my first question to you is, well,
what are you gonna do on this side
So you can meet your living expenses?
So do you have,
I have another question too.
-: I do work, I actually do generally lawn irrigation.
So you won't, your loan won't have to fund
any living expenses?
So what is the purpose of your loan?
Is it to get the play up producing?
Is it to install and produce, get your plants in production?
-: Yeah,
so our big issue is like,
I'm bringing up my parents' land right now
cause I'm only 28, I don't have any farmland of my own.
So I would have to buy land,
I would probably have to live on that land too,
so it would need a house.
And then say we still have to put up trellis
and get our plants in, and then have all our,
of our operating costs on top of that.
-: And it takes how long for a plant to start producing?
-: So for us, we'll get a 10% of the crop the first year,
and then you bought your four we kind of level
off to about normal production, right?
-: And then how long will the plant produce
once you get up to full production,
-: They're perennial.
So as long as you take care of the plant, they,
we never need to replant.
-: So from a lender's perspective,
what I will need to plan for is to make
a capital loan each of the first three years.
And hopefully maybe you can scrape up enough
to make a little interest payment,
if not at the end of the fourth year I would look at
not necessarily matching my loan terms to the plant life,
but I'm gonna say a 10 year repay after,
after four years is probably about where you would
be on that.
So in that scenario, what I would basically do
is I would go to my friend, Ben,
and I would sell your idea to Ben.
And we would structure a loan program to accommodate you
again, the public private partnership between
whether it's a commercial lender or whether it's
farm credit services through the FSA.
And then they'll help us mitigate the risk.
So thank you.
-: Yeah, it almost feels like we're ready
to have an open bidding process for your business, Greg.
So maybe after offline,
he should engage with these four individuals.
-: So is it shark tank? -: I don't know.
It feels all of a sudden like shark tank.
Thanks Ben.
Let's go to our next question.
Thanks Jesse.
-: Good afternoon.
My name's Robert Carl, and I'm in the process
of buying our small family farm from my parents,
just north of St. Edward.
And a little, little backstory going into the question,
just kind of, so where I'm coming from here back here,
in the early eighties parents had their loans through
the PCA out of Albion and there was a year we,
we owned two quarter sections rented a third quarter section
and one bad year flooding, low commodity prices.
There was a loss on that rented ground.
And the PCA that year decided, Hey, anybody with a loss,
we're calling them out.
We want our money.
And they went into the office and kinda talked with the guy
a little bit, and had a whole stack of papers
and said, "it's not just you, we're going through,
getting it from a lot of people."
So my question is that over and obviously it's been
almost 40 years now since that happened.
Are there laws, regulations, whatever in place
to kinda keep that from happening,
not just to the people that have been established,
but especially like right now with the newer people,
or was it just simply, the one organization
that it happened to, or is it something that can happen?
-: Well, I can attempt to answer that.
My first year in banking was 1985.
So I saw that.
I'm gonna speak the positives.
I'm gonna look at today first of all.
Today, a beginning farmer has lots of options for financing.
we're a community of 5,500 people.
We have six commercial banks,
we have a farm service agency service center,
and we have a very active farm credit services
within our area.
So there, there are lots and lots of options
now just because there are lots of options,
the entrance is much more difficult.
So I'm gonna go back to 1985.
In 1985, there were two commercial banks in Chadron.
One of them was kicking loans out as quickly
as what we could take.
Because we had our footon the gas.
We apparently had pretty good vision
that maybe we're starting to come out of this.
-: it's back in that day,
we could finance 70 to 80% of a purchase price
and actually get something to cash flow.
Now, it takes maybe 60% equity in order to secure cash flow.
So there were two banks,
there was a also production credit association
that was having some issues and they were also rolling out.
So, I'm not gonna say history has a tendency
to repeat itself, but I think the banking industry
and farm credit services, we learned a lot
from those times.
We learned that case flow repays loans,
and unfortunately it, it takes some capital in order
to cash flow.
And that's what we've learned is you have
to look at what is the repayment capacity of a loan,
and if we all stick to those principles,
our customer will be just fine.
And that's, what's most important is our borrower
and our customer.
-: Yeah, and I would say at that time,
maybe we were more collateral lenders versus
today we have sustainable lending limits in place.
And so on real estate, we have a limit on what percent
or what dollar amount that we can lend on ag real estate.
And so we maybe we're lending higher
than we typically would today.
And had been collateral lenders versus
now it's a whole package, five C's of credit
and taking into account their sustainable lending limits.
-: And if I could chime in as the regulator
because I started in 82,
so I know exactly what you're talking about, Steve.
And there's no question the lending community
as you speak, let down the farmer at that point.
And as a farmer, I've reminded our institutions of that.
And you're right.
We've taken a lot of precautions since then in the way
of capital, to be able to withstand those tough times
Our mission, but I think it's a mission with
many commercial banks is to be there in good times,
as well as bad.
Which means conservative lending practices,
which means saying no occasionally, right.
But hopefully we've learned some lessons
from those unfortunate years, 40 years ago.
But history can repeat itself.
Keep in mind that the eighties,
we keep talking about the eighties,
but it was preceded by an unparalleled period of prosperity,
starting to land in the late sixties
and going through the seventies.
And so lending standards were dropped
and there was a lot of lending
and it is a concern of mine
as farm lending continues to rise.
Interest rates are low inflation, right on the horizon,
interest rates generally follow inflation.
It's something to keep in mind of both the lenders
and the borrowers.
Does that help kind of address your question?
There is a great question.
-: We're bumping right up here against our hour already.
It seems hard to believe,
but I wonder if the four of you could speak
to educational programs specifically designed for young,
small and beginning farmers and ranchers that you'd like
to you'd like everyone here to know about such
that they could engage so less about the lending
and the, those programs and more about the education,
what to be thinking about what do you offer
in terms of that, those platforms?
-: So yeah,
I guess with us it's important.
We always encourage any of our customers
and any of their kids to stay involved in their community.
you're probably never gonna start out working
in the same exact position that you'd like
to end up. Right.
And so the more connections that you have just
compounds your ability to end up where you, working towards.
I think as far as we'll, we'll have guest speakers
come in we'll have lunches dinners we'll invite everybody
that we think would be interested in that specific topic
to meet up and do do some discussion.
Again, as far as, as being involved goes
just try to be involved in your communities.
Push for your school board, be involved with your excuse me,
what's the anyway ,Nebraska lead program,
That's a great one.
Future farmers of America, I guess that kind of thing.
I think i'll just lets you move on from there.
-: One thing I've I've learned is that
this next Generation is they're different
in a good way.
The next generation knows how to take this
and solve problems.
So you really have a heads up, you can grab this device
and within minutes, you know how to mine information.
So I think you're going to be learning
how to use, utilize technology to solve problems.
Now there becomes a point in time
where I still don't believe
that technology can replace the human mind.
So you'll take this and you'll solve,
you'll take the problem solving exercise
as far as you can.
And then you need to find the human interaction.
So you need to come to the bank.
You need to come to the farm service agency.
Extension is a resource out there that they're,
they're always standing and waiting and reaching out
to help solve problems.
So this device is a powerful way to solve problems
if it's used correctly.
-: Great.
Brandy, we'll jump over to you.
And then Ben, last word on this question
and we'll wrap it up here.
-: Yeah.
We have internal education that we provide.
We actually have a customer education team
at farm credit services of America,
and they facilitate a three- day conference for our young
and beginning specifically that are for producers
that fit within that segment.
We have webinars that we do monthly
and then we also have some self guided learning
that producers can do.
And then we also invest in Annie's project
and for a FFA the ambassadors program,
those types of external educational opportunities
for producers as well.
-: Great, thanks Brandy.
Ben ,
-: Have to say,
I mean, we don't have anything that we specifically
offer for education, but I would just say in general,
and the recommendation is it's been
touched down throughout the day.
I grew up on the farm in the eighties
and early nineties and,
I value hard work as much as anything.
And there was a time that you really,
I think a farmer rancher
could almost rely solely on hard work and that was gonna
be a significant determining factor in whether
that operation was successful enough.
And again, hard work is still vitally important,
but we've seen ag move to such a,
a business space, animal now.
And so you can be the hardest worker in the world,
but if you're not good manager
and you're not a good marketer,
all that hard work can go by the wayside very quickly.
And so be someone that is constantly educating yourself
on the marketing, opportunities that,
that you have available to you.
Take us talk about taking leadership and management courses,
take communication courses.
The number one thing I can tell you
when it comes to dealing with a lender is communication
and the more distressed your operation is
and when you're struggling, the more important
that communication is because when the communication
starts to break down that's when the trust starts
to break down and that's when, understood like maybe
the only option is to move the person on or for pools
or something like that.
They can have that communication made as a part of it.
that trust remains part of it, generally speaking,
a lender or FSA or anybody is gonna try
to bend over backwards in order to keep you
on the farm or the ranch.
And so I would really just challenge you
to never stop learning. even if you're somebody that,
you're gonna take over the family farm branch outs
just the amount of technology that's an agricultural day
and where that's gonna go in the next 20 years.
every day is a new learning opportunity.
-: Thanks, Ben.
So every day is a learning opportunity.
Lets express our appreciation for this team .