Times have been tough for bankers as well as farmers and agricultural businesses, a group of American and Canadian bankers were told last week.
“People don’t always love us,” said Michael Pedersen, chair of the Canadian Bankers Association, alluding to the public furor over proposed mergers between the largest Canadian banks.
But some at the joint meeting on agricultural finance held Oct. 2-3 were more upbeat.
Donald Mengedoth, president of the American Bankers Association and chair of a bank in Fargo, North Dakota, told the conference that the booming U.S. economy has led to “great years” for agricultural bankers.
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The meeting, which is one of the largest agricultural conferences ever held in Winnipeg, focused not on low prices that have plagued the industry for the past few years, but rather on emerging opportunities in technology, policy and trade.
Pedersen said he sees many parallels between banking and farming. One of them is that they are both information-based
industries.
“It’s not by coincidence that the first almanac was written for farmers.”
Both are going through watershed change forced by global competition, technological innovation, changing demographics and the need to operate on large scales.
Consider needs
He said farmers will need more flexible and specialized financing, services, advice, risk management, and help with financial planning for intergenerational transfers.
He said $50 billion in farm assets will be passed from one generation to the next in coming years.
The banker’s role is to understand the risks and changes farmers face, and be partners with them in future ventures, he said.
They must also find ways to value the intangible qualities that make farms successful, such as entrepreneurial spirit and the ability to manage risk.
“A farm is not just a collection of land, livestock and equity,” he said.
“In agriculture, some of the most important assets never make it on the books.”
