Reflecting on 2020 and Positioning for Success in 2021
We recently interviewed Darrell Curtis, president and CEO of AgChoice Farm Credit, who provided an AgChoice update. Listen to the full podcast episode with Darrell here.
A year ago, none of us would’ve predicted a global pandemic and all of the implications it has had on our businesses, families and daily lives. What’s your perspective on COVID-19’s impact on the agricultural industry?
2020 certainly has brought a lot of uncertainty. Early in the pandemic, we especially saw big swings in market prices and supply chain demands and more. Now the markets have become somewhat more stabilized, although we know that volatility in ag is always present. The pandemic has really underscored the importance of having a risk management strategy on farm operations. Nobody can be sure what tomorrow might bring.
Also, the COVID relief offered through government programs truly has helped farmers. Programs like Paycheck Protection Program (PPP), the Coronavirus Food Assistance Program (CFAP) 1 and CFAP 2. They all provided much needed funds to support ag and agribusinesses. At AgChoice, we were pleased to offer PPP to our customers to help them through difficult times.
While it's easy to focus on all the challenges in COVID-19, I feel there's much we also have to appreciate and celebrate as well. There has been an increased understanding among consumers about the importance of ag. As we all know, ag is essential. Ag producers can adapt; they've shown that. Our farmers are the ultimate entrepreneurs. Some farms altered their business models to modify the products and services they offered and other farms who direct sell to consumers quickly switched to offer curbside pickup and website ordering.
Overall, the ag industry is strong. During this time we've seen many ag organizations, including AgChoice step up to serve customers. We’ve all enhanced our communications efforts in new ways to better serve customers and keep them informed on topics important to their operations.
Could you share with our listeners about how AgChoice fared in 2020?
This has been a terrific year in a lot of ways, surprisingly, but we're very happy for that. Despite the challenges related to COVID, AgChoice has achieved outstanding success this year, and that is great news for our member-borrowers.
We've had strong loan growth. It's approaching 10% for the year, which is quite good. We've been helping our customers manage 2020's financial challenges, including the aforementioned PPP loans that we did about $44 million of. We've also performed other loan servicing action such as deferring loan payments or re-amortizing loans to help people with cash flows or simply refinancing to lower interest rates.
This year we saw significant growth in the use of our financial services, such as consulting (which includes feasibility studies, succession plans and benchmark studies), tax and accounting services and crop insurance.
We expect this year to achieve our highest association earnings level ever. That bodes very well for another strong patronage distribution in April, which is really one of the benefits of being part of the AgChoice co-op.
2021 is just a week or two away. What are AgChoice’s areas of focus for the coming year?
AgChoice is planning for future success in 2021 and beyond. Our team has been working on several significant initiatives to provide additional customer benefits.
First is rural home and land loans. One thing we've seen during the pandemic is the national trend of more Americans seeking to live in rural areas rather than in cities. AgChoice saw a strong uptick in loan requests for country loans and properties. We're enhancing our staffing and processes to meet this demand. Growth in these loans makes AgChoice stronger and more profitable.
The second area that we are going to focus on next year is young, beginning and small farmer loans and services. We've been taking steps to help these folks to find greater success in acquiring and growing their farm operations. Some ways we are looking at helping include providing aspiring farmers an easier path to obtain loans and financial services at reduced rates and also finding an experienced mentor if that's what they desire. Further than that, we're also considering offering startup or feasibility type study grants for YBS.
Finally, we have an ‘easy loan experience’ project that we've been working on for almost two years now, which is focused on improving the loan application and approval process for customers and staff. The goal is to speed up the process and hopefully reduce the aggravation associated with the loan process.
Our work overall to improve and enhance our customer's experience, never really ends. We look forward to continuing to serve ag in 2021 and in future years.
With the Christmas season upon us, could you share with our listeners what you are grateful for this season, along with anything else you’d like to cover?
There are many things to be grateful for despite what we've had to go through in 2020. AgChoice had a great year despite COVID. We've had strong loan growth, and this is pretty noteworthy considering the severe limitations that we've had in our abilities to go see customers face-to-face. We implemented a lot of programs this year to help our customers manage through the pandemic and its economic impact. I'm grateful we had the opportunity to do that. I'm also thankful for the fact that we do have strong earnings and a record patronage amount is on the way in the spring for our customer owners.
Another big reason why I am grateful is the overall health of our employees. The pandemic has impacted many people, and our employees aren’t immune to that, but all of our employees are well and healthy. I'm extremely grateful for that.
Finally, I’m thankful that we are able to continue to serve ag. It's an honor and a privilege that we all will never take for granted.
Despite the uncertainty and the fear when COVID emerged earlier this year, it seems like America is strong and there's hope the virus will soon be in the past.
I wish all of our customers, staff and our rural and ag partners, a happy and safe new year.
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