Cultivating Prosperity Through Successful Agricultural Banking Relationships

Cultivating Prosperity Through Successful Agricultural Banking Relationships

Author:  Chance Schilling, Director, Agribusiness Banking

When it comes to banking, agribusinesses and ag producers face many of the same needs as businesses in other sectors. Working capital is a fundamental requirement, providing the liquidity needed to cover day-to-day expenses such as seed, feed and labor. Online banking is another critical key to success, offering farmers access to accounts and financials whether they are at home, in the office or on the tractor.

While these needs mirror the business landscape at large, farmers and ranchers also face challenges that distinguish the type of banking services they need from those required by other industries.

For instance, while cash flow is vital to any business, the seasonal nature of agriculture, combined with fluctuating pricing and unpredictable yields, can complicate cash management for farmers and ranchers.

These circumstances make a banker with agricultural experience critical to ensuring you have the support and solutions you need to keep your operation thriving.  

Finding the Right Bank: It’s all About Relationships

The ag industry is unique, so your banking relationships should follow suit. If you call your banker to report a critical equipment failure or that your prize bull was injured, and they don’t understand the significance, it may be time to get a new bank.

But what should you look for in agricultural banking relationships? Here are some key attributes to help you find the right partner for your business:  

• They face cost challenges head on: With rapidly changing market conditions and often slim margins, ag producers are constantly asked to do more with less. A banker who understands agriculture can offer guidance and tools to help you optimize your cash flow. For instance, using a money back business credit card can buy you time to pay for purchases, while also delivering valuable rewards that can ultimately help cover critical expenses.
• A partner for all cycles: Given the cyclical nature of agriculture and your profits, you need a bank that will be there for the good times and the bad. It’s easy to contact your bank when things are going well, but you should feel equally confident approaching your banker when times are tough.
• They respect what you do: Many agricultural bankers are farmers themselves or grew up in a farming family. They have deep respect for the industry and understand the hard work and dedication required to manage a farm or ranch operation. This respect is reflected in the service they provide, with 24/7 access.
• Off-season availability: While you may speak with your banker more often during certain times of year, he or she should also be available during the off-season. You should be able to meet with them any time of year, bounce ideas off them and take advantage of their unique market perspective to identify new opportunities and expand on existing ones.

Overall, farmers and ranchers need a banker with a “boots on the ground” philosophy, meaning they are willing to bring the bank to you. Your time is money, and a banker who will conduct business where it’s most convenient for you demonstrates a true interest in your success.

That “boots on the ground” mindset also provides your banker with greater insight about how you work, the challenges you face and the banking solutions or market advice that could make your job easier or more profitable.

Remember, in agriculture, as in banking, the right relationships make all the difference in sowing the seeds for a prosperous future.

Discover the bankers and services that FNBO offers the ag industry.

About the Author

Chance grew up on a farm and ranch in northwest Kansas running a diversified crop operation and raising purebred Limousin and commercial herds. It was a natural step to follow his upbringing into banking as it provides him with the opportunity to help Nebraska’s farmers and ranchers feed the world.