The Farmer, Marketer and Lender Relationship
At the 2010 Commodity Classic, a panel of experts sat down to discuss the benefits of using a marketing strategy to get the most beneficial package farmers can from their lenders as part of the learning sessions offered at the show.
The panelists included Bret Davis, Mike Hogan and Kent Kramer. Davis owns and operates 3,400 acres as well as a seed dealership in Delaware Country, Ohio. Kramer is the lender for Davis Farms, and Hogan represents Stewart-Peterson, the marketing consultant service for Davis Farms.
The panelists discussed the advantage of having a marketing firm, or at least an individual within the business, dedicated to the marketing strategy of the farm.
“For a guy like Bret, he’s helping me when he has a marketing partner, he’s managing his operation,” Kramer explained. “By Bret doing that, it mitigates some of my concerns as a lender. He’s got a consistent income and people advising him about the markets, and that presents a stronger picture for a loan package.”
With the recent market volatility, having someone dedicated to watching the markets can really add consistency to a farmer’s business. The place not to get tripped up, the panelists warned, is in dabbling in marketing and not fully committing your resources to it.
“In agriculture today, I don’t think you can do it all and do it all right,” Kramer said. “There are just too many other decisions on the farm to make.”
“Marketing is like a gym membership,” Hogan suggested. “Some people join the gym and reap all the benefits, but other people don’t commit to it, and they get zero benefit out of the cost of the membership.”
The key to making a marketing strategy work and gaining that trust between the farmer and the lender, and the farmer and the marketing consultant, is confidence.
“The confidence we have among each other all comes down to the communication,” Davis said.
Through good communication and consistency, a farmer can present his business as a strong candidate for investment and come out of it with a favorable loan package.
