Two farmers meeting with their ag lender as they shake hands

Seven ways farmers can maintain strong ag lender relationships

Kristen Johnson Latest Blog Posts, Product Success

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by Stu Clark, Senior Product Manager at Conservis

At the online Top Producer Summit in February 2021, three ag lenders shared thoughts on creating strong relationships with your lender, and Farm Journal’s AgWeb wrote an article based on that conservation entitled “7 Ways to Ruin Your Lender Relationship.” This article contains information on an important part of being a successful grower: staying on top of your financial picture so you can farm for the long haul.

This is a topic close to my heart, as I grew up on a farm that struggled financially. (Read about my take on my father’s custom harvesting operation.) In response to this useful article, I want to offer seven ways to maintain a strong relationship with your lender. This article highlights how our farmer-inspired, top-notch farm management software can support you in staying on top of your financials and partnering well with lenders.

1. Learn where to improve

Farmer holding soil with dollarsThe first item in the article talks about farmers falling in a trap of doing the same thing over and over again. My experience is that all growers want to improve their operations. Every single one I’ve met wants to get better every year; the question is where? There are literally hundreds of places that any producer could look to improve their operation, from agronomy to cost savings to training their crew to financials. The challenging part is deciding what to do differently, to know what’s going to make the most dollars-and-cents difference. If you can only do one thing a year, what should that one thing be?

Field-level Profitability

Conservis does a nice job of helping growers pinpoint where they can improve their profitability. We do this in a number of ways, but the first place to look is field-level profitability. Once the least profitable fields are identified, growers can test scenarios to improve profitability like renegotiate rent, plant different crops or adjust the agronomy. Cost & Profit Analytics is a fantastic data visualization tool. Not only is it easy to identify unprofitable fields but growers can quickly test scenarios. On the Financial Management side, the Field Profitability Report is optimized to share with lenders or other advisors.

2. Have open and proactive conversations

The article talks about growers taking an “ostrich” approach to working with their lenders. Ag lenders view themselves as trusted partners to the farm. Every lender I've talked to wants to help their farmers operate the best business possible. However, if a grower's not confident in their data or they don't feel like things are going well, that can be a scary conversation to have. It can cause growers to be less assertive or straightforward with their lending partners.

To me, this goes back to perfect visibility into your financials and in your operation. So you can say, here's what exactly has gone off the rails, and here's what we've done to mitigate those things and take a proactive approach. Conservis' Budget Variance Report is a useful tool where growers can quickly drill into areas where there's risk of going over budget. Catching these items early gives growers the opportunity to make proactive adjustments, in real time. The ability to go into Conservis and within a few seconds see what things need attention brings a lot of confidence. If you don't have that visibility, it's really hard to know, one, what’s not right, and then two, how to change it.

(The Budget Variance Report lives within our Financial Management toolkit.)

3. Have a solid marketing plan

No one wants a wishy-washy marketing plan and Conservis hits the marketing plan out of the park. The system automatically pulls crops, yields, and contracts that have been created into the marketing plan. As the growing season progresses it's easy to adjust yield estimates based on what the crop is actually doing in the field.

Our marketing plan is a lender’s dream. All a grower has to do is click export, email, print, whatever—all the data's there that a lender would need to assess a marketing plan.

4. Focus on the future of your operation

Dad and son on family dairy farmIt's important to look forward and consider where you want to be. While Conservis is not a succession planning tool, many of our growers use the platform as a way to seamlessly transfer knowledge from one generation to another (a good example lives in the Bates Next Generation Farms case study). Having data in one place that can be easily accessed is a big driver for why people want a good farm management system. So while we don’t directly help with succession planning, we are a data repository that can make it much easier to transition a farm operation to future generations.

5. Be prepared and professional at meetings

Growers have so many things demanding their time, from managing a team to marketing grain to any one of literally hundreds of other things they're trying to manage each day. And if you also add preparing for a lender meeting—while that's critical, there's a bunch of other fires that are happening, and that can be a difficult thing.

The Lender Packet

This streamlined packet is one of my favorite new features. The reason for this is that it's so easy to create a professional-looking document with all the data a lender needs. There's a simple wizard that walks you through the creation process and then Conservis pulls it all together for you. Gone are the days of having to update multiple spreadsheets prior to a lender meeting.

See what the experience is like for one grower below.

6. Bring your questions

Lenders want to be a resource for their growers, and they love when growers come prepared for an in-depth conversation. However, if you're not confident in your data, if you don't have a clear picture of your operation and your financials, it can be really intimidating to ask questions.

A system like Conservis helps you hone in on details so you can ask specific questions to your lenders. Accurate, in-depth information promotes a confident feeling of being in the driver's seat. The goal of Conservis has always been to give farmers the business tools they need to succeed, and when you have a system that gives you insight into everything that’s happening, you can have better, more strategic business conversations.

7. Have a profit-focused plan

Growers don’t often have a plan for profit, and a plan to protect working capital is extremely helpful. If you don't have a clear picture of your profits, or if you're not confident in the numbers you're sharing with your lender, it's challenging to say you know exactly what you'll do if, say, corn hits $5 a bushel.

Conservis’ Financial Management tools can give you that clear picture and confidence. You can go in and say, My target plan forecast shows that I'm going to net an extra $500,000 this year, and then in my low case, my worst-case scenario, I'm going to net an extra $300,000. Either way, you feel pretty confident you're going to be somewhere between those two numbers. When you have a plan that’s complete, accurate and easy to adjust to create scenarios—now you can have deeper conversations, because you have data to back it up.


"Conservis does a great job of helping growers pinpoint where they should optimize their operation. Everybody wants to improve—you just don't always know where to improve.”

Stu Clark, Senior Product Manager at Conservis

To me, the seven ways to ruin a lender relationship all stem from not having visibility into one's own financials. Having a full financial picture of your farm is so important, because otherwise you're likely to encounter struggles like my family did. A system like Conservis gives you the insight and confidence to not only build a great working relationship with your lender, but to ensure your farm will be operating well and well into the future.

Conservis is the leading independent farm management software system. Interested in how our tools could support your operation?

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