By Clay Schuldt
Farm Director of the National Association of Farm Broadcasters (NAFB) Pam Jahnke visited Caledonia on Jan. 23 to moderate an agriculture roundtable discussion at the Four Season Community Center.
“The goal of this conversation is a meet and greet,” Jahnke explained. Local people in the agricultural industry were invited to the luncheon as a chance for the community to get know the La Crescent State Bank representatives. On the panel was State Bank Senior Vice President Wayne Oliver, Vice President Dale Pertzborn and Vice President Colin Fleming.
Jahnke asked the panel a series of questions concerning the farming business. The audience was given the opportunity to learn the various business and banking philosophies as they pertain to agriculture.
Jahnke asked why State Bank has started working in the Caledonia area. Oliver explained that State Bank has had a branch in La Crescent for 14 years, but only recently began working with ag business in Houston County, saying, “The only reason you haven’t seen us over here, is it’s taken us several years to get us to the point where we have the competency we’re comfortable with and the expertise to come over here and say we are open for business to help you.”
The panel answered questions ranging from land transfer discussion, the capital gains tax and the need for greater capital. Pertzborn emphasized risk management, telling a story of one farmer who had 30 percent of his end of the year profits come from crop insurance. “I think crop insurance is the equivalent to a marketing plan,” Pertzborn said.
Later, the questions turned to specific banking practices. Jahnke asking the panel, “How comfortable are lenders with these farm land values?”
“As a lender, personally, we are very confident, but the whole deal of succession planning is getting very complicated,” Oliver said, further commenting that there are few industries affected by Washington as much as agriculture.
Two years ago the guidelines for any government secured institute was not to lend more than 50 percent of the appraised land value. “They are just so worried that land prices are going to be the next bubble.”
The only thing that is for certain in the industry is that the rules and guidelines will change by the end of the year.
State Bank Financial is a community bank that has been serving western Wisconsin for 134 years with a focus on agriculture throughout their history. As Pam Jahnke asserted once again at the end of the roundtable, State Bank is now in a position to help farmers in southeast Minnesota.