Why Marketing Plans Keep Lenders Happy

March 4, 2010 05:47 AM
Ohio producer Bret Davis has no trouble talking to his banker these days, despite market volatility and tight credit conditions. He feels his good performance in the market and consistent income speaks for itself.
Hiring a market analyst has helped him build a strong marketing plan over the years that has let to continuous profits, says Davis, who farms corn, soybean and wheat in Delaware County, Ohio. Davis spoke this morning on a panel titled "Marketing Strategies Your Lender Will Love” at the Commodity Classic in Anaheim, Calif.
"The market has been so volatile in recent years that I got tired of worrying about making the decisions on my own,” Davis says. He hired Stewart Peterson as a marketing service. "They help me know when it's time to pull the trigger,” he adds.
Davis' banker, Kent Kramer with Delaware County Bank and Trust, says farmers who use a marketing service to their fullest are consistently among his top loan customers.
"As bankers, what we do is mitigate risk,” Kramer says. "Farmers who are engaged in marketing are helping me do that by managing their margins. It makes it easier for me to go to bat for them with my loan committee.”
Mike Hogan, senior market advisor with Stewart Peterson, says the communication between the farmer and banker is critical to supporting a good marketing plan.
"Communication between the three of us is critical,” Hogan explains. "If the banker and farmer are talking often about what dollars are available, then the farmer can communicate to me what I have to work with on marketing. It helps me to know how much the bank is willing to support the farmer in marketing decisions.”
It can take awhile to develop a comfort level with a marketing service, adds Davis. He worked with Stewart Peterson for four years before he turned over all of this business to them for help with marketing and whole farm consulting.
"You have to take the time to develop the trust,” Davis adds. "But now if I'm out planting corn and get a call that says the market moved and I need to sell, I can trust that decision is being made in my best interest. It allows me to focus on producing the crop.”

For More Information 
2010 Commodity Classic Coverage

You can email Jeanne Bernick at jbernick@farmjournal.com.

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