5 Agricultural Farm Lending Tips
Agriculture relies on a mixture of the old and the new, as AgAmerica Lending Correspondent Lender Craig Seals knows all too well. Take advantage of his 30 years in lending and follow his five tips for those in the ag industry.
#1: No One Knows Agriculture Like Those in Agriculture
Seals grew up in Eastern Kentucky’s Appalachia area, which is rich in traditions and relies heavily on agriculture, area coal mines and forestry. His family did a little coal mining and farming, raising livestock like cattle and pigs, and growing crops like corn and potatoes. Like most families, his grew a huge garden that added fresh fruits and vegetables to the table. His background gives him real-world perspective that benefits those in need of farm lending. “A lot of times a lender doesn’t understand farming,” Seals points out. “What these farmers are going through, they’ve got a lot of hurdles to jump. Plus, there’s the good ole’ weather.” For Seals, in ag lending, you can’t look at only the numbers. You have to understand all the facets of the industry and the people who make it happen every day, too.
#2: Trust Your Gut
Seals studied business at Cumberland College on a baseball scholarship, and eventually earned an MBA from Morehead State University. As a correspondent lender, he travels all over the southern states—such as Arkansas, Mississippi, Tennessee, Kentucky, Alabama, and the Florida Panhandle—as AgAmerica Lending’s representative. He’s been in the lending business for 30 years and sees the value of both traditional methods and new technologies.
However, there are few things as reliable as years of experience. “These old cattlemen, one thing I’ve got to say about them,” Seals shares. “They can look at a cow, and tell by the ears, the head, the backend— whatever, if it’s sick, doing good, or needs to be taken and isolated or treated.” In short, when you’ve got years of experience, it’s always best to trust your gut.
#3: Stick Together
In early February, Seals attended the Tennessee Cattlemen’s Convention as an AgAmerica Lending representative where there was a lot of talk about beef prices. “In the cattle industry, the cattle prices are the biggest concern,” Seals continues. “Over the last two years, we’ve experienced better cattle prices than in recent years. Right now, the concern is that cattle prices might be going back down,” he explains. However, cattlemen have their own methods for dealing with undesirable markets, which is one good reason for conventions where they can discuss their options and get everyone on the same page. “You’ve got a lot of cattlemen who are starting to grow their herds again,” Seals shares. “What they’ve learned to do is hold back their cattle for sale. Then, once the prices go back up, with supply and demand, they’ll sell those cattle at a higher price. They’ve learned to actually make the market a little better in order to survive.”
#4: Education, Advancements, and New Technology Are Good Things
Seals maintains that new technologies and advancements are also front and center at cattlemen’s conventions like the one held in Tennessee. “Technology has become so much greater,” Seals says. He cites “Mob Grazing,” an intensive rotational grazing system, as an example of an advancement that offers a new way of doing things that includes additional benefits, such as reduced feed costs and being a good way to put weight on cattle.
Seals also observes that a lot of credit is due to the Extension Offices that work out of universities and colleges to assist those in the agriculture industry. “They work hand-in-hand, making sure the animals remain healthy. They stay on top of things.”
#5: Get a Fixed Term Rate
As to advice about financial matters and cattle farm loans, Seals shares that the volatile nature of the current lending market indicates that any farmer or rancher with a loan should look to secure a fixed rate. “Right now, if they have a line-of-credit or a long-term loan, try to get as long a term possible in a fixed rate,” Seals states. “Because of the volatility of the markets, I would want to be more certain over at least the next five to ten years— I would lock in even a little higher rate if necessary— then I know for sure what my payment was going to be,” he advises.
The global economy we live in— and its unpredictability— adds another hurdle for those in agriculture to jump. Land loan specialists like Craig Seals at AgAmerica Lending make sure that the nation’s farmers and ranchers have what they need to hit the ground running when ag markets make them jump. It’s been AgAmerica Lending’s mission to help our country’s ag producers grow and thrive with our low interest rates, long amortizations, and outstanding 10-year line of credit.
Click here to read more about our AgAmerica team member, Craig Seals.