Homegrown: Georgia’s Leading Industry

“While banking has changed in the last generation, one thing that has not changed is the importance of a strong relationship with your banker. Community bankers coach their customer’s children, teach their customer’s Sunday school class, and ensure that the same family has a mortgage and line of credit for their business. It is indeed a noble calling,” commented Georgia Agriculture

Commissioner Gary Black.

“Georgia’s community banks are the leading providers of credit and other vital banking services to the state’s treasured farmers. The importance of the symbiotic relationship between Georgia’s farmers and their local community banks cannot be overstated,” said John McNair, President & CEO of Community

Bankers Association of Georgia (CBA). Stephen Lewis, Senior Lender at First National Bank of Coffee County, Douglas,

and CBA Agriculture Committee Chair took a group of bankers last fall on a tour of a Premium Peanut and Coffee County Cotton Gin in Douglas. According to Stephen, the mainlines of agriculture his bank is involved with is poultry, cotton, peanuts, corn, timber, and blueberries. “Right now, cotton prices are weak. Peanuts, corn, and timber appear stable. Blueberry prices were slightly off, but yields were good this year.”

Community bankers tour Coffee County Cotton Gin in Douglas last fall.

Perry White, Vice President- Commercial Lender, Community Bank of Georgia in

Baxley, primarily serves customers with timber, cotton, peanuts, corn, soybeans, tobacco, blueberries, pecans, blackberries, cattle, poultry, and pine straw. “Agriculture is suffering a depressed pricing environment, primarily due to trade challenges worldwide. Some of these areas of agriculture mentioned have been subsidized by the government to help support the pricing. With innovations in technology and support from Extension and chemical companies, there have been advancements that have enabled the farmer to operate more efficiently,” explained Perry.

“Relationships with these farmers is the key part of Ag lending. Being able to sit down and work out a 2,3,5,10-year plan with your borrower on what your mutual goals are is a major part of what helps a farmer succeed,” said Perry. “There are hills and valleys of Ag Lending. There have been times when a farmer’s request gets turned down, but 12 months later that farmer comes back and thanks his banker for looking out for him, to help him see the risks that were involved. Communication between both parties are what makes for a great lending relationship.”

Peanuts, cattle, and vegetable farming including watermelons are the leading lines of agriculture in Eastman, according to Jolene Carroll, President & CEO, Bank of Eastman. “Cotton performance is doing well, due to government support and cattle is having some issues due to supply chain problems,” Jolene explained.

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In Fitzgerald, Community Banking

Company of Fitzgerald President & CEO Corey Gibbs and EVP/Senior Lender

Mark Turner shared what’s happening in their area of the state. According to Mark, most of the bank’s ag production loans are for peanuts and cotton and crop yields were good for the most part last year, but commodity prices continue to be low.

Corey shared photos of two farmers who happen to be also be directors of the bank. “One has been in farming for 50 years and another for 45 years. Both men are very respected within the industry and well known,” said Corey.

Scott Curry, President/CEO, First State Bank of Randolph County in CuthbertShellman, shared peanuts, cotton, corn, timber and beef cattle are the main lines of agriculture his bank finances as well as cover crops of wheat and rye during the winter months. Scott noted that their farmers and timber/logging customers are well-seasoned and performing well. The biggest challenge bankers shared was weakening commodity pricing for a variety of reasons, but primarily trade issues. “Commodity prices are a challenge, as is the rising costs of production as related to fertilizers, pesticides, chemicals, etc. The lack of demand for ethanol has greatly hurt grain/corn producers this year, due to falling oil prices,” explained Scott Curry.

Mark Turner agreed that the main challenge is low commodity prices due to the trade tensions with China along with demand issues created by COVID 19. Perry White described challenges for Southeast Georgia farmers, “Depressed pricing due to trade issues. Labor shortages and hurdles trying to obtain the labor in a timely manner. One thing we are seeing is the delay of transitioning from generation to generation of farmers. With the suffering markets and increased input cost, the “Father” in the farming operation doesn’t want to turn the farming operation over to his son and watch him have an uphill battle from day one.”

The land of opportunity…

“Bankers are continually looking at ways to diversify such as investing in cotton gins, peanut buying points & shelling plants, and blueberry packing facilities,” said Stephen Lewis. “Farmers are looking into efficiencies involving technology to allow more precise practices for the operation. Precision Ag is gaining traction as a younger generation of farmers is slowly becoming more involved in the day to day operations of farm management. On my blueberry farm, we are looking for more ways to be efficient with machine harvesting blueberries, while still maintaining a handpicked quality fruit. The cost and manpower for this harvesting is a fraction of what handpicking costs,” explained Perry White. In Eastman, Jolene Carroll noted that cannabis oil production is a significant opportunity. Scott Curry • Community banks in Georgia made $2.6 billion in 24,738 farmland loans. • Community banks in Georgia made $909.8 million in 17,536 agricultural production loans. • Community banks in Georgia comprised 99% of the ag loan market (from banking industry). • Community banks made $112 billion in 943,320 farmland loans. • Community banks made $94.2 billion in 2,158,362 agricultural production loans. • 77% of farm loans made by banks in 2019 went to farm machinery. • Over one-third of bank agricultural loans were under $10,000. • Total employment within the Ag sector was around 2,320,000 (plus self-employed and unpaid family workers all four quarters) • The median hourly wage for Ag sector employees was $12.26 • Labor productivity within the Ag sector decreased by a constant 3 percent (2019).

Source: FDIC Call Reports, Kansas City Federal Reserve Ag Finance Databook, and Bureau of Labor Statistics Productivity

What challenges are these agribusiness customers seeing?

Studies for annual figures in 2019.

Checking out the watermelons at the family business in Eastman.

shared “The de-regulation brought forth by the current administration has helped with regard to financial access, environmental constraints, and US jobs being brought back for use of our own commodities.”

Looking ahead: What’s on the horizon for Georgia farmers?

“With margins continuing to tighten each year, farmers will have to look at investing in vertically integrated facilities such as increasing their acreage, investing in cotton gins, peanut buying points & shelling plants, looking at different crops, and reviewing expenses to make sure they are getting the best return on the money they are investing in the crop,” said Stephen Lewis. According to Scott Curry, careful monitoring of commodity prices, the demand from the markets in the Orient and Europe, and competition from South America are on all on the horizon.

How can CBA help?

Each year, John McNair, President & CEO of CBA and Lori Godfrey, EVP, Government and Regulatory Relations at CBA, lead a group of bankers from across the state to Washington, DC to meet face to face with legislators. All bankers agreed that continued lobbying efforts and education for bankers are on the top of the list.

“Continued lobbying efforts to ensure federal government maintains adequate crop insurance and price support subsidies in the farm bill,” stated Stephen Lewis, who met with legislators in DC on behalf of Georgia’s community banks pictured here with part of his

in the past. Mark Turner noted, “Cotton farmers will again need subsidy payment help with low cotton prices. If the current cotton price does not increase substantially by this fall, farmers will peanut crop.

Hulin Reeves Jr. has been farming for 45 years. This year his crops are peanuts and cotton. He is need government payment support.”

Scott Curry’s bank has participated in the ICBA Capital Summit numerous times and Scott suggested lobbying efforts to support to buy American products (raw materials AND finished goods) and price supports for American farmers to be competitive against foreign countries. Lastly Perry White said, “Updates via educational seminars, and farm tours are a great way for bankers to see what goes on in the daily life of agriculture. Lobbying efforts for farmers play a huge role to help them out. If we can help their cashflow by helping to provide financial assistance through subsidies in lieu of a stabilized marker then that will help the relationship with the banker as well.”

“It is vitally important for community bankers and farmers to continue to join together to advocate for Georgia’s agriculture industry,” said John McNair.

Mark Scanlan, Senior Vice President, Agriculture and Rural Policy at ICBA,

encourages bankers to urge their Senators and members of Congress to cosponsor the ECORA (Enhancing Credit Opportunities for Rural America) Act, which puts banks on a more level competitive playing field with the FCS lenders by providing banks a tax exemption for income earned from farm real estate loans and for housing mortgages in communities up to 2,500 population. Bankers can access ICBA’s Be Heard website link to generate letters to Congress to help rural Americans get loans.

John McNair commented, “The ECORA legislation would further help community banks expand needed credit and other financial services to Georgia’s farmers.”

CBA’s AG Committee

Committee Chair: Stephen Lewis First National Bank of Coffee County, Douglas CBA Liaisons: Lori Godfrey & Kristi Greer

Committee Members: Mandi Boehringer Georgia Rural Investment Fund, LLC, Atlanta Faith Danforth Farmers & Merchants Bank, Lakeland William Hurt Planters First Bank, Cordele Ray Muggridge Bank of Camilla Lorrie Shaw Community Bank of Pickens County, Jasper Rick Tatum Northeast Georgia Bank, Lavonia Mark Turner Community Banking Company of Fitzgerald, Fitzgerald Perry White Community Bank of Georgia, Baxley Kent Wolfe Director at The University of Georgia Center for Agribusiness & Economic Development, Athens Tim Wynne Planters First Bank, Hawkinsville

Georgia’s community bankers meeting with legislators on Capitol Hill

Bank of Eastman agribusiness customers based out of Rhine.