When you join Farm Credit, you assume both roles, which makes for a highly rewarding long-term relationship.
When you joined Farm Credit, you chose to participate in a unique organization, one that considers you as a customer and a stockholder. This "dual relationship" means that the connection between you and Farm Credit is unlike your link with any ordinary lending institution.
In this article, we examine what makes this relationship so rewarding. We'll hear from a couple of members: one farmer whose family has partnered with Farm Credit for three generations, and a young and energetic first-time borrower who recently launched a new agricultural business.
C. W. Gravatt and Son, Inc.Roger Gravatt runs a fourth-generation, 1,250-acre hay and grain operation. Roger's great-grandfather started the business 84 years ago, and his 76-year-old father, Carlton, is still on the farm every day.
For decades, the Gravatts ran a dairy enterprise, but over time they shifted operations from dairy to grain and hay, which are their full-time businesses today.
"We certainly didn't start the hay operation up all at once," said Roger. "Our dairy operation had a small hay enterprise that sold its excess hay to local farmers. The transition came gradually. We started with one load a week and kept growing. We had some trucks, trailers and hay equipment. Today we have two tractor-trailers on the road full time.
"Margins in dairy were narrow and finding labor was difficult. We saw that hay could make a profit since there are so many horse farms in this area, so the market for hay is strong. Eventually, it got to the point where we ran out of our own hay, so we bought more at hay sales and brought it here for resale."
The Gravatts gave up their dairy operation in 1987. "We saw that we were cutting ourselves too thin because we didn't have a herdsman and we were running both enterprises ourselves. Something had to go, and we were confident in the market for hay.
Today we keep two tractor-trailer trucks on the road all the time and supply about a hundred horse operations of various sizes. We plan to focus more on hay this year and streamline our grain operation."
On his relationship with Farm Credit, Roger says, "We've stayed with Farm Credit since the late '60s. I keep my eye on the local bank scene. Our local bank merged several times in the past five years, and with every merger they reduced staff and lost that local feeling. As far as agricultural lending, that's just not their field of expertise."
Locust Grove FarmJohn Conklin is part of Farm Credit's Young, Beginning and Small Farmer Program.
He launched Locust Grove Farm as a start-up enterprise with 34 milking cows and 25 head of youngstock, and he was helped out in large measure by a Farm Credit capital loan plus an operating loan for rent, feed and other expenses.
John graduated from SUNY Cobleskill in 1992 with an associate's degree in dairy production management. He worked as a herdsman for four years before striking out on his own at age 25. While working as a herdsman, he accumulated equity in cows and youngstock by receiving payment on paper for the milk from those cows, in addition to salary and benefits.
He selected Farm Credit as his lending institution because of its track record working with young farmers through the Farm Service Agency (FSA) guarantee program. He also did a lot of homework up front before approaching Farm Credit with his request for credit.
"I prepared for several months for my meeting with Farm Credit because I wanted to show that I understood the financial aspects of the business. I prepared a yearly operating budget with expenses and income and a balance sheet listing my assets and liabilities.
"I also projected slightly higher expenses and income based on a conservative
milk price and production per cow. I based my projections on Farm Credit's
Dairy Farm Summary and my knowledge of farm costs from my experience as
a herdsman (feed prices, forage prices). I also worked out feeding programs
and costs with nutritionists and submitted a written summary with a little
about my goals and myself." Today, John Conklin rents a dairy farm with 54 tiestalls, a pipeline, a barn cleaner, an automatic feed cart and two silos. He currently milks about 60 cows twice a day and raises about 40 head of youngstock on a neighboring farm. His is a one-man operation, but he receives assistance from his father for emergencies or repairs, and a high school student helps out three nights a week.
Regarding Farm Credit, John said, "The people at Farm Credit were sincere, took my ideas seriously and called me the minute they had an answer for me. I was very pleased with the entire process. I also received incentives, such as waiving the FSA guarantee fee and reduced tax and records fees. Farm Credit is a great partner to have on your side when you are starting out a new business in agriculture."
For more information, contact us at info@farmcreditwny.com today!
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