GROWTH & DEVELOPMENT
Agricultural Lending: Resurgence in a Storied Practice By Tony Centonze John Bartee is the Agriculture Lender at F & M Bank. He has only held that title with F & M for one year, but has been doing Ag lending for more than twenty years of his career. As Middle Tennessee has been constantly changing and growing, a positive for the majority of our residents, farmers have been subjected to a lot of pressure, coming at them in a variety of ways. In an unexpected twist, this year of pandemic has shown some positive signs for the Ag industry. “In agriculture, we have been in the bottom of what's called a super-cycle,” Bartee said. “We had the 1970's and early 80's which were a bottom from an economic standpoint. Then, in the late 80's we had good productivity and prices. Of course, everything comes and goes in cycles, but we are hopefully finally coming out of the bottom of this super-cycle. The last six or eight years have been a real struggle for a lot of farmers. They've had to restructure debt. They've had to pull equity from their properties just to cash flow their operations.” Bartee says that the industry is finally starting to see an uptick. “We had a good crop year in 2020. Prices have rebounded moderately. That, along with a lot of COVID-19 relief funds, 38 • CLARKSVILLE BUSINESS JOURNAL
have probably made this year one of the more positive cash-flow years for farmers in the last six to eight years.
how can they compete, on price, with a developer. It's not likely they can spend the same money for farmland.”
“The cost of getting started in this business is daunting. Typically, you won't see someone farming who hasn't inherited some farmland, or some capital. It does happen. It's rare for someone to get started with nothing and make it.”
Another challenge farmers face is the cost of equipment.
JOHN BARTEE Bartee says that one of the main obstacles for Middle Tennessee farmers is 'land pressure'. “That's the pressure farmers are feeling from all the development that's taking place. Farmers have to be competitive if they want to purchase real estate, but
“Equipment costs are astronomical,” Bartee said. “A brand new combine with all the bells and whistles, and two headers, will cost upwards of $750,000. One combine can comfortably cover 2,500 to 2,600 acres. Farmers have to contend with wear and tear, maintenance, fuel prices, input prices, fertilizers and chemicals, and seed prices.” “If you underestimate farmers, you're missing the big picture. We just wrapped up Leadership Clarksville's Ag and Industry Day, and we were having this very conversation. Today's farmers, the majority of them have at least a bachelor’s degree. Some have a Masters or other advanced degrees. They have to be excellent marketers, mechanics, chemists, biologists, soil scientists. They have to do it all.” While advancements in technology and science have created higher costs, and increased education requirements for farmers, the industry has seen increased efficiency and higher yields.
