By Laurie Burstein
Agriculture has always been and will continue
to be a big influence on the St. Louis region’s economy. According to the St. Louis Agribusiness Club, agribusiness in the St. Louis region accounts for 12 percent of the total area economic output ($23 billion in total sales) and 20 percent of the region’s workforce.
Along with the strong ag economy comes a
variety of companies that support the industry. Commerce Magazine spoke with a banker,
a professional farm manager and a barge
transportation trading company, who each offer
specialized services to support local agribusiness.
Dan Malan
Vice President and
Lead Relationship Manager
CoBank
A veteran of the industry, Dan Malan has worked for CoBank for 24 years and worked in agribusiness finance for 32 years. He is responsible for providing financial solutions to primarily commercial agribusiness customers. Agribusiness finance is a big part of CoBank's portfolio, but the bank also has active divisions that work with rural electric utilities, communications companies and international export companies.
CoBank has $62 billion in assets and about 2,200 customers. Headquartered in Denver, CoBank has more than 600 employees working in 11 regional offices throughout the U.S., with one of those offices in St. Louis.
CoBank customers include agribusiness borrowers, ranging from local country grain elevators to larger, international borrowers, such as Pilgrim's Pride and Land O'Lakes. CoBank is a member of the Farm Credit System and also supports regional farm credit associations.
Malan says CoBank supports the ag industry in a number of ways. "We provide a wide range of products and services, including loans, leases, cash management tools, letters of credit and international financing," he says. "We take pride in being a relationship bank, which means we really get to know our customers and customize the financial products we offer them to add value to their business."
Malan adds, "We offer many different loans for all types of financing, but one product we provide that separates us is a revolving term loan. Many ag-related businesses deal with seasonal cash-flow issues and cyclical capital needs. A revolving term loan helps them maintain an appropriate level of working capital and flexibility throughout the year."
Malan says that CoBank is a cooperative bank, which means it's customer-owned. As a cooperative, CoBank returns a portion of the bank's profit each year to customer-owners in the form of a patronage payment. In 2007, CoBank's patronage payments totaled $245 million, which represents a 21 percent return on average invested capital for active borrowers.
With a slower economy, Malan says the biggest issue facing CoBank and agriculture in general relates to increased borrowing needs due to higher commodity prices and rising input costs.
"CoBank is committed to standing by our customers during this time of rising prices and increased volatility in the commodities market. We work closely with our customers on an individual basis to make sure they have the appropriate financial tools to operate successfully in today's economic environment," he says.
Bret Cude
Professional Farm Manager/Real Estate Sales
Farmers National Com
Farmers National Company is the largest employee-owned landowner services company in the country. The company has been offering professional farm management, real estate sales, and related landowner services since 1929.
Farmers National is headquartered in Omaha, Neb. and manages more than 3,600 farms in 22 states comprising over 1.2 million acres of ground valued at more than $1 billion. Farm management, ranch management, farm sales, farm auctions, farm land listings, and oil and gas management are the main services the company offers.
Based in Nashville, Ill., Bret Cude is an accredited farm manager with 15 years experience. Cude manages over 50 farms throughout Southern Illinois and East Central Missouri for Farmers National today. His clients include corporations, individuals and family trusts.
Cude says his company can handle all day-to-day operations of farm management including: budgeting to achieve cost control, asset conservation, improved crop marketing and increasing profits.
There is a large demand for these types of services today Cude says. "We are seeing more and more demand for our services," he says. "As more people own a farm but don't want to operate it, we step in to provide a range of farm management services."
A key ingredient of Farmers National's professional farm management services is in financial reporting. The company designs, sets up and maintains farm and ranch accounting systems and provides complete management of funds and the review and payment of bills.
Cude continues, "More companies own farms as an investment today, but are not in a position to manage the property. Our customer base has really shifted more towards large and small corporations today," he says.
For those who decide to sell their farms, Farmers National Company also has the expertise to market and sell farms and rural property. The company can determine what the farm is worth and appropriate selling price to maximize profits for the owner.
The company website maintains a large listing of farm and ranch properties for sale, as well as agri-commercial properties and an auction calendar. The company also holds workshops around the country to help landowners with important issues and ways to maximize profits.
"Farms are still a very good investment," Cude says. "People have an option today if they don't want to sell, but don't have the time or experience to operate the land. As a professional farm manager, we have the background and expertise to successfully manage the farm for them and maximize their investment."
Laurie Hiler
Owner
Seneca Transportation LLC
Seneca Transportation is a barge freight transportation trading company. Seneca's business revolves around buying and selling barge transportation for grain and grain products shipments on the Mississippi and Illinois River to the New Orleans Gulf area for export.
Barge freight transportation trading involves the right to a trip on a barge for a fixed time and place. The price for the trip fluctuates daily similar to other commodities. Price is determined by a variety of factors—the size of the crop, non-grain demand such as coal or steel and the price of fuel.
Laurie Hiler, owner of Seneca and president of the St. Louis Agribusiness Club, says Seneca started in 1999. She is the majority partner with two minority partners who own and operate five grain elevators on the Upper Mississippi River between Quincy, Ill. and Burlington, Iowa. Those partners are Ursa Farmers Coop and Colusa Elevator. In addition to these partners, they serve many other grain and product shippers that are located along the Illinois and Mississippi river, as well as in St Louis.
Hiler says her company supports agriculture in the St. Louis area by providing grain and grain product transportation services via water to the New Orleans Gulf area for export.
"Without water transportation, the only economical choice for agriculture shipments would be rail," Hiler says. "By having a competitive choice, shippers are able to use the mode of transportation that is most economical for them. By having the choice of barges, railcars and trucks available for moving agriculture products in the St. Louis area, the shipper has choices which translate into economical savings as opposed to being captive to only one mode of transportation," she explains.
Hiler says her business has changed in the last five years in several ways. "One big change is the tremendous development of ethanol plants throughout the Midwest—including those that in recent years have popped up along the riverÑdirectly competing for grain normally headed for export," she says.
In addition, she explains that export grain has been on the rise with the lower dollar and increasing world demand due to rising standards of living the last few years. "This highlights the importance of maintaining and improving our lock and dam system to retain our competitive edge in transportation in the U.S. and in world markets," Hiler says. |
