Regions Provides Tailored and Knowledgeable Agricultural Banking

Executive Summary with Chuck Williams, Community Banking Executive

The financial needs of agricultural businesses are unique, so choosing an agricultural banker who understands your ag business is essential.

Chuck Williams, Community Banking Executive and agricultural banker for Regions Bank, provides insight into the issues facing farmers today and how Regions can provide banking expertise to meet those needs.

What are some of the problems facing farmers today?

There is a good bit of uncertainty due to the lack of an active farm bill. The Senate passed its farm bill version on June 10, 2012, and the House is expected to pick up its farm bill in June 2013.  A final farm bill needs to be passed by September 30th, the date that the current farm bill expires. It is possible that direct and counter-cyclical payments will be eliminated, and that crop insurance cost and coverage will be impacted as well.

Weather is also a concern as it affects grain yields and commodity prices. In a normal growing year, the United States has more grain than it needs and can sell the surplus on the world market. But in an extreme year, such as with the Midwest drought in 2012, grain was more difficult to grow, and we had a deficit. That impacted both farmers and the amount of corn, wheat and soybeans on the world market.

Land and equipment are also a large ongoing expense for farmers, and prices for those have been increasing.  The same can be said of the overall cost of crop production.

How does a Regions agricultural banker help address these problems?

Regions stands apart as a trusted advisor through our quality of service by engaging in relationship banking. We’re not just providing the farming client with a crop loan; we're also providing our clients with financial advice, wealth and treasury management, and many other financial services. We are dedicated to our clients and provide them with financial solutions tailored to their specific business using the most sophisticated methods.

We have agricultural bankers who are very acclimated to agricultural practices. They understand how to put together a farming budget. They talk to a lot of farmers, so they have a broad view of farming practices in our geography and can relate them to their clients.

I, for example, have been with Regions for 40 years, and in agricultural lending for 42 years. I grew up on a working farm, so I understand the needs of farmers. Our agriculture bankers have an average of 26 years of experience in the ag industry.

Farmers are very appreciative of our expertise because they want somebody who understands their business and the whole spectrum of what agriculture is all about.

What financial options are available for farmers?

Regions provides our agricultural clients with several available financing options, such as working capital lines of credit for crop production, intermediate financing and long term financing for equipment purchase, real estate purchase, farm improvements, and capital investments to name a few options.

What does a farmer need to do secure agricultural financing?

In addition to understanding his crops and his land, he has to have a business plan for today and in the future. For example, if you sell corn today, it’s $6.95 a bushel, but in December, it might be $5.57 a bushel. So he needs to have an idea of what will happen between today and when he’s cutting this year’s crop so he understands the most opportune time to sell.

He also needs to have an understanding of the right balance of equipment for his crop; they don’t want too much or too little. They don’t want a lot of equipment expenses, but they need enough to get the job done, and they need very good operators for their expensive equipment. A farmer has to maximize efficiency in every controllable aspect of his farming operation in order to generate the highest return from his capital investments.

What’s ahead for agriculture in the next two to five years?

The outlook is good because the world population is expected to increase in the next 10 years, which will in turn create greater food demand and need for higher food production. In addition, countries that have an improving standard of living are requiring higher food qualities. The United States is one of the main producers of high quality food for the world, as we have genetic seed development, improving farm practices and high-tech equipment. That gives the U.S. Farmers opportunities to export their commodities into the world markets.