When it comes to farming and agribusiness, the business itself is about as predictable as the weather in North Dakota. With over 26,000 farmers and ranchers across North Dakota, Choice Bank recognizes farming as a livelihood and the unpredictability of operating a farm.

Since 2011, we’ve been recognized as one of the top-performing agricultural lenders by the American Bankers Association. Much of our success in the ag industry is due to our commitment to innovation. It is absolutely critical that we keep pushing innovation to move agricultural lending into the future with new applications and services to best serve farmers and ranchers.

The Problem with Traditional Banks

The traditional banking experience of filling out piles of paperwork and waiting around for a loan to be approved needs to evolve for farmers and ranchers so they can succeed in today’s fast-paced world. Historically, the ag banking process consists of the following steps:

• Farmers enter the bank and fill out paperwork to apply for the loan.
• They wait for the underwriting, deliberating, approval conditions, documentation and receiving of the loan.

In farming, timing is everything. Farmers don’t want to spend the time they don’t have waiting for their loans to be approved when they need to be focused on managing the farm. The farm is their livelihood, and the world relies on them and the crops they produce.

A particularly important asset for ag banking is to leverage your team’s local experts. We allocate tremendous decision-making authority to our branch-level leaders and trust the folks in those chairs. This significantly speeds up the loan-making process. With an ag leadership team that’s very geographically spread out, we can expertly identify and address unique local needs across multiple regions.

Evolution of Input Financing

Choice Bank offers several traditional ag solutions from seasonal operating loans, equipment financing and leasing, livestock purchasing options and more. Our new Ag Supplier Financing Program creates a customized plan and cost structure for ag retailers and agronomy centers that specifically meets their needs. We built an online experience for producers applying for retailer credit accounts that is extremely simple. From application to signing their loan docs, it can all be done from a smartphone or tablet in the seat of their tractor. There is great value in providing a crucial form of capital they need in a quick convenient format.

While this Ag Supplier Financing Program is exclusive to retailer-based credit needs today, we see this as the direction more traditional ag lending products will trend in the future. There is major innovation happening in agriculture and we’re making sure the financing piece of that environment isn’t left behind.

Our programs were born from listening to farmers and those agribusiness partners and working to solve their finance-related problems and serve their needs managing day-to-day operations.

Pairing Solutions With Experience

We have an agriculture expert in every corner. Many of our team members have either grown up on a farm or have experience working in agriculture or agribusiness. I, myself, spent my youth working on farms and know what it’s like to work in the field from dawn to dusk. We apply the lessons we’ve learned to help provide better solutions for the next generation of farmers.

When you work with our seasoned experts, you are much more than just a business transaction. Farmers come to us for advice and guidance, meaning bankers often become a counselor of sorts, providing knowledge, tools and resources for farmers and ranchers to operate successfully.

By simplifying the lending process, we put the customer first and live out our #PeopleFirst motto. We are constantly asking for and receiving feedback from farmers about their experience working with us and we continue making the process as efficient and farmer-friendly as possible.

The customer is the top priority. Being a #PeopleFirst ag lender means we pay close attention to a product or service, and the experience from start to finish. How the customer reacts today influences how we respond, innovate, and lead our industry and company into the future.

For more information on ag solutions or to find a Choice Bank ag expert near you, click here.

Written by:

Todd Borchardt
Chief Ag Credit Officer
Langdon, ND
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“At Choice Bank, we have a heavy focus on agriculture: on its producers, their families, and the ag affiliated businesses and communities they live and work in,” said Tony Gudajtes, EVP & Ag Market President. “Being recognized in the Top 100 Farm Lenders is an incredible honor and is a testament to how committed we are to our ag communities.”

For more information on ag solutions or to find an ag expert near you, click here.

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As a banker at Choice Financial, I am privileged to work with the greatest group of people in the world – the farmers who work hard to feed the rest of us. It is very rewarding to partner with our producers on their path to success. One of the most important tools for both the farmer and banker is to have a plan.  A roadmap.  Yet, a plan can be one of the most challenging things to put to paper. After all, none of us have that elusive crystal ball. How is anyone supposed to know what the price of corn will be next fall? What’s the weather going to be like? While we aren’t going to predict exactly how the coming year will play out, having a plan – a roadmap – will at least keep us going in the right direction.

Many experts will say knowing your true cost of production is the foundation of creating a helpful roadmap.  I agree.  No, we don’t know what the cash price of corn will be next fall, but if we know what our breakeven price is, then we have a better idea of where our marketing targets should be.  Beyond the seed, chemical, fertilizer and other direct input costs, what about living expenses, health insurance, equipment payments, or college tuition?  What about all those smaller things that we don’t think add up to much of anything?  This is where the pickles and napkins come into play. If all of these things are considered and you find out your breakeven price of corn is $3.15 a bushel, then it makes it easier to make that sale at $3.25, even though it seems like a shame to not get at least $4.00 like we did a few short years ago. You find out that your marketing price target should be relative to your breakeven price rather than compared to historical market prices. This is especially true in more difficult times. As they say – it’s nice to hit a home run every once in a while, but it’s the singles and doubles that consistently win ballgames.

—Brent Thielges, LaMoure Location President

For more information on ag solutions or to find an ag expert near you, click here.

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Get. A. Plan.

Before the loan advice or the insurance details, the plan is the most important part of running a successful farm or ranch.

“You need to have a plan for everything,” Greg says. “If you don’t have a plan, you don’t know where to go.”

It’s something Greg has seen over and over again, throughout a career spent entirely at the intersection of agriculture and finances. He grew up on a farm, and after college worked the farm with his dad. At the same time, he started a job with Ag Country Farm Credit Services. As CCO at Choice, he works primarily with farmers and others in the agriculture industry. Sitting at both ends of the table, as he puts it, has given him a broad window on the do’s and don’t of a successful farming operation.

And while it may sound simple, a plan is something that can be easily overlooked.

So what exactly does a plan look like? Here’s a few resources to get started.

1. Get to know your farm business manager.

Farm business managers, provided through the North Dakota and Minnesota Extension Services, are highly underutilized. These are folks who are trained to help with financial accounting for farming operations throughout North Dakota that help producers not only understand their current financial situation, but also assist in developing a playbook for the future.

These folks are educators, not just bankers. They understand things like commodity marketing and agronomics. Yet only an estimated 15% of farmers currently meet with their area extension farm business manager.

So, Greg says, this is step #1. Meet with your farm business manager. In North Dakota, you can contact them here. Together you can put together the first draft of a plan, setting financial goals and budgets for your farm.

2. Get to know your lender.

Your lender is your biggest resource. Because they work with many different operations in the industry, they have a unique perspective on how things work. They are the ones who can give you an idea on how to proceed — and not just by putting numbers together. Your lender can give you a comprehensive look at where you’re at in the long-term goals of your operation.

Now, Greg recommends utilizing both of these resources to create the most thorough, bulletproof, whatever-the-weather-brings-proof plan. You can either meet with the lender first and then your farm business manager, or vice versa. Just meet with both of them to form a plan.

Here are a few other tips to creating the best plan possible:

1. Get everyone involved. Greg recommends that everyone who has an economic interest in the farm should be part of the plan-making with the lender. Husband/wife, brother/sister, children who are farming and those who decided not to farm. Even the grandkids, if your operation is multi-generational. Communication with your business partners and family is vital in establishing both long and short-term goals of your farm or ranch.

2. Know what your cost of production is — inside AND outside the farm. When determining your production costs, don’t just look at what it costs to put crop in the field. You need to look around at everything. For instance, on-the-farm-costs might include chemical fertilizer seed, supplies, etc. Outside the farm, costs might include family living, health insurance, college tuition, debt, and other costs. All of these play a factor in your costs of production. By knowing what your costs are, you can create a successful plan with your lender as to how to keep on budget, and what price and yield you need to hit with your crops. Understanding break-evens makes your marketing plan much easier to execute.

3. Communication. It might sound cliche, but communication is the key to success. Talk to everyone who has ownership in the farm and make sure they are up to speed on the planning process, and the finances of the operation. Talk to your lender ahead of time — not after you’re in trouble — and communicate exactly where you’re at as a business. In fact, ask your lender what the bank rates your operation. Most bankers have a Risk Rating Scale that typically ranges from a 1 (best) to a 7/8 (worst). Know where you are at – your banker may be surprised to get these questions! Talk to your farm business manager and let them help you with your accounting. Together, you can form the best plan and the best team to create a sustainable farming operation.

Making a plan is critical. Too often, Greg meets with farmers who bank outside of Choice Financial who are desperately seeking a new lender because they didn’t have a plan, and now they are in financial trouble. Unfortunately at that point, it’s too late. The plan needs to be in place in good times and in bad!

But fear not! By following these tips, you can make a plan that ensures you won’t be in that position. With a bit of work ahead of time, you can ensure your farm will last through fair and stormy weather, and anything in between.

For more information on ag solutions or to find an ag expert near you, click here.

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