Abbott Myers, chairman of the board, Mississippi Land Bank, says the lending cooperative takes some of the risks out of farm credit.
He also says detailed, accurate records improve would be borrowers' chances of securing farm loans.
Myers explains that the Mississippi Land Bank is a unique lender that provides financing for Mid-South growers by selling bonds on the market to get funding.
"The bonds are sold worldwide on farm credit, and that takes a lot of the interest risk out," Myers said. "We have good interest rates that you can lock in when you make a loan. The bank does short-term loans, such as equipment, and long-term loans, such as buying land or a house."
Myers said he personally got connected with the bank in 1969 when the bank first loaned him money.
"We are just like Gerber Baby Food," Myers said. "Their motto used to be babies are our business, our only business. Agriculture is our business, our only business. We specialize in agriculture, and we're proud of it."
Serving 32 Mississippi counties
Mississippi Land Bank runs off a co-op system. When you take out a loan, you become a stockholder, and you get to vote on who is on the board and who represents you.
"We have it broken up into north Mississippi, 32 counties, into six different loan offices located in Clarksdale, Cleveland, Senatobia, Tupelo, Corinth, and Starkville. Each office has a director and the office will cover three to five counties, depending on the area and amount of loans needed," he said.
Each director is elected by the stockholders at Mississippi Land Bank's annual meeting every three years.
"After the April meeting, we have a re-organizational meeting every year," Myers said. "I'm currently chairman of the board. We will have an election every three years and will elect whoever is going to be chairman and vice chairman of the board."
World of farming, banking
Myers understands that every year is a financial challenge for farmers. Between prices and weather, everything changes from year to year.
"For farmers, money's just like a tool; it's just like a tractor," said Myers, a farmer. "We spend a lot of money; a lot of money flows through a farm. It is the same in forestry and the timber business. I know right now it is hard to sell pine timber, but that'll turn around. Everything works in cycles in agriculture."
Mississippi Land Bank helps farmers during stressful times, he says, in any way they can through land loans, production loans, and lending money.
"We have a number of people come into the office and develop friendships with the officers in the bank who oftentimes have a background in agriculture, and they'll ask the Mississippi Land Bank associates, 'What do you think I need to do?' We are not in the advice business, but anyway we can help somebody, we will," he said.
The bank helps young and beginning farmers grow in agriculture.
"It's hard to do it by yourself," Myers said. "You need somebody backing you and helping you get started."
Mississippi Land Bank patrons' dividends are one of its big selling points.
"We love the repeat business. Because if we make money, we turn around and give the money back in the form of patrons' dividends once a year. Last year we gave back 65 basis points. Plus, we try to give you the lowest interest rate we possibly can upfront," he said.
Tips for record-keeping
Myers says one way farmers can improve their loan applications is by keeping good financial records and having good yield histories. QuickBooks is his accounting system of choice.
"It's user-friendly," he said. "It has a payroll option I like since payroll is my hardest to keep records on. It keeps records of all our vendors, and you can go into as much detail as you want or focus out.
"One piece of advice I tell people is, if possible, buy land," Myers said. "You may need to rent land when getting started, but when you can, buy land. Land has been a good investment for me over the years. It doesn't make any difference whether you rent or buy. You pay for the land you occupy, so you are better off owning the land. It gives you a reserve. If land goes up, you build your equity. It gives you a cushion against bad years.
"Every farming operation is different, but you have to be a good manager of your money, time, and effort. You need to know what kind of land you have and produce what that land is best suited for. My land is suited for rice. It's not suited for cotton; I grew cotton for years. The best thing that ever happened to me in farming was when my son got me out of the cotton business. Life has been good ever since."
Myers now grows rice, corn, and soybeans. He said his irrigated land makes good corn, which he found surprising.
"We've been really pleased with the corn, and it gives us another crop besides just soybeans and rice," he said. "We've been making good rice yields too. Good varieties in soybeans have been a plus for everybody. A key in farming is knowing what your land can produce best and picking the right varieties to make a crop."
Making business plans
Myers admits he has never sat down to write a business plan himself, but he enjoys the planning process of farming.
"My wife will tell you I think about farming all the time," he said. "Even when we're not in the fields, I'm planning, and that, to me, is the joy of farming. My son and I already planned where we are going to have crops for not just 2020 but also for 2021. We're always trying to plan ahead. My plan of operation changes all the time, though, due to circumstances like the weather, so I have to be flexible and have a plan A and plan B.
"Mississippi Land Bank has been very good to me. They loaned me money in 1969, and I've been borrowing money from them ever since. My farm has grown, and they've helped it to grow. They are, in large part, the reason for my success."