By the time most farmers read this article, they hopefully will have finished harvesting their cotton crops and sent them to the gin. A long season, plagued by record-breaking rains in the Southeast and Mid-South, will have finally come to an end.
But, as everyone knows, there is no time for a long vacation. Even if this year’s crop weren’t delayed by weather problems, there are always numerous decisions that have to be made. For example, there are seed variety decisions for 2010. And, most importantly, a producer must organize his financial information for that annual meeting with the ag lender.
As a Texas banker, farmer and ginner, I have a different insight into what a cotton producer faces when he’s dealing with his lender. I see both sides of the equation, so to speak.
The lender must have access to all of the producer’s financial information so that he can make a sound decision on whether to finance the crop. Conversely, the producer needs to understand the environment that the ag lender is operating in today. He must understand the importance of good recordkeeping and a workable crop budget.
Help Needed From Washington
From my point of view here in the High Plains of Texas, we simply aren’t getting the quick response from Washington when it comes to disaster relief. I realize that we’re in a difficult economy, and Congress is understandably working on other issues. But I still feel that a lot of things remain up in the air on how some of these programs in the 2008 Farm Bill are supposed to work.
As for additional advice that I could give to farmers about how to improve their crop financing strategies, there are a few things to remember. The more details a farmer can give to an ag lender, the better it will be for everyone.
Viewed from any angle, we’re all under more scrutiny than ever before, and that’s why we don’t want to have any loans with problems. If a producer is going to have a cash-flow shortage from this year, it is very important that he comes to his lender with a reasonable plan to get back on track.
If a farmer is thinking about making changes in his cropping patterns, get your numbers together and visit your lender early. Try to have a good relationship with your lender and answer all his questions. In the end, it’ll be a win-win situation for everybody.
Curtis Griffith is president and general manager of Southwest Gin and board chairman of City Bank of Lubbock, Texas. Contact him at (806) 525-4342.