Ag banks increased lending

By Carroll Smith

For many farmers, securing a production loan for the upcoming year is a critical part of the process to make sure the growing season runs smoothly and the bills get paid. The Louisiana Farm Bureau Federation recently provided some good news on this topic that I think all farmers will appreciate. Following are some excerpts from that report:

“Most farmers will tell you the two most important resources needed to do their jobs are a good crop consultant and a good banker. And not necessarily in that order. Spring is the time when farmers have already consulted both their crop specialists and their bankers in preparation for planting. The two go hand-in-hand. No loan, no crop, no crop, no crop consultant. Pretty simple dynamic really.

“But even the most serious crop consultants will tell their farmers that making friends with their bankers is the most important relationship any farmer can have. In farm country, it’s a cardinal rule…. Farm banks are usually the financial backbone of rural communities. Rural bankers understand the unique needs of the folks who live in farm country. Big banks have complex formulas when making loans. Don’t meet the formula? You don’t get the loan.

“But across rural America, farm lenders often bend those rules because they know the economic health of their local communities. There are few hard and fast rules when it comes to who gets money. And those ag lenders also know they may be the only game in town farmers and other rural residents can really count on.

“This was never more evident than in 2012. U.S. agricultural banks increased farm and ranch lending by 13.9 percent, or $10 billion, in 2012 and held $81.8 billion at the end of the year, according to the American Bankers Association’s (ABA) annual Farm Bank Performance Report…. In the South, farm lenders improved profitability and increased farm loans by 3.7 percent rising to $6.1 billion in 2012. Farm banks in the South employ more than 11,200 men and women…. The West region increased farm loans by 14.9 percent to $8.1 billion and increased employment by 2.7 percent, or 7,500 men and women, according to the report.”

John Blanchfield, senior vice president and director of ABA’s Center for Agricultural and Rural Banking, continues the optimism felt in the ag lending arena with his remarks: “The ag economy is strong and getting stronger with a favorable outlook. Our nation’s farm banks remain optimistic despite the challenge to find additional revenue sources.”

As the season gets underway, I believe it’s reassuring to know that when it comes to securing financing for your crop, there actually are institutions out there that are able and willing to do so to keep our industry viable.

Send your comments to: Editor, Rice Farming Magazine, 1010 June Road, Suite 102, Memphis, Tenn., 38119. Call (901) 767-4020 or e-mail

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