What a farmer wants

Northwestern Financial Review, Dec 15-Dec 31, 2004

What do farmers want from a banker?

That was the central question for a panel discussion featuring representatives from three Minnesota farms speaking at the ABA's Agricultural Bankers Conference. Moderator David Kohl of Virginia Tech University asked the farmers: "Which is more important - a low rate or good service?"

"Both," answered DeAnne Malterer of Janesville, Minn.

Arlis Lucht of Jackson, Minn., said service is more important. "A banker can make up a quarter percent interest by giving us good advice," Lucht said. "The people are real important."

"If my mom doesn't like the banker, we go somewhere else," said Eric Nelson of Caledonia, Minn. With his parents beside him on stage, Nelson said he and his parents run the farm jointly. Gail Nelson said she has walked out of meetings with bankers when they have ignored her and directed all their comments at her husband and son. "If they don't want to talk to me, then I don't want to talk to them," she said.

When asked about using multiple banks, Lucht said he confines his business to a single institution. "I don't want to double collateralize," he said. "It is simpler if you work with just one bank."

Dale Lucht, son of ArNs, called his relationship with the banker the most important relationship he has off the farm. "He's our money supply," Dale Lucht summarized. "If our money supply is cut off, we can't do it."

Dale Lucht said he looks for the following qualities in his banker:

* An understanding of farming, animals, and the nuances of agriculture;

* Open communications

* Trust

* Offers economic advice

* Competitive rates and fees

* Technological competence

* An open mind

* Asks good questions.

"I like someone who plays devil's advocate," explained Lucht. "I like it when they ask those 'what if...?' questions, like: 'what happens if you have a 10 percent reduction in yield or price? How are you going to handle this?'"