Bankers form relationship through farming

This piece is presented by The First National Bank in Sioux Falls.

In an industry like ag, volatility can be extreme. Although the Kayser brothers prepare, research and predict, it’s Mother Nature who ultimately decides if she’s going to bless the fields with a perfect balance of sunshine and rain or scorch acre after acre of crop under the searing sun. Each year is different.

But farmers are resilient. They take what they can get in the fall and immediately begin planning for the next planting season in the spring. They look at things like how to maximize yield, moisture content of their crop, quality of soil, specific seed hybrids, results of research to determine the best population of seed in an area — and the list goes on. They may even overlay yearly topography maps of their land to determine what’s working and where they need to make adjustments.

Phil DeGroot, an ag banker at The First National Bank in Sioux Falls, works with fellow ag banker Josh Kayser and Kayser’s two brothers to study patterns, opportunities and risks in their financials, often right from the seat of a combine. Most First National Bank ag lenders are farmers themselves, so they understand the business. They know there is rarely time to spare, so they often will meet farmers in the field.

Kayser Farms near Emery in southeast South Dakota consists of 4,000 acres of corn and soybeans. Many times, Josh and his brothers will work well into the night, harvesting row after row, so they can start another field in the morning. Farming is big business that can be highly profitable or sickeningly futile. It’s a way of life that requires perseverance and heart; often, it is also passed down from generation to generation.

Josh and Phil recently shared their thoughts on the value of mistakes, the dynamic of a client-banker relationship and the challenges of the past year.

In five words, how would you describe the way you live your life?

Josh: Dedicated, family, friends, trust, honest.

Phil: Organized chaos, driven, family-oriented.

It has been a challenging year in the ag industry. How do you deal with that?

Josh: The obvious challenge right now is profitability. We are taking a systematic approach to attack the issue: lowering expenses, taking advantage of marketing opportunities and looking at where we can be more efficient.

Phil: Communication is key — understanding what everyone is thinking and making sure everyone is on the same page,  whether good or bad.

What would make the world a better place?

Josh: If we could get people to actually sit down and explain their thoughts and beliefs with each other instead of joining in the volatile rhetoric that exists online. I try to listen to everyone, even those I may not agree with, and try to gain an understanding of our differences.

Phil: Josh makes a valid point; there’s no doubt about that. But $4.50 corn — now that’d be something!

The two of you have an interesting relationship as Josh is not only your client, but also a co-worker. Is that a delicate balance?

Josh: It’s been a great experience. I’ve learned a lot from Phil by working alongside him and learning more about banking. Phil and I will often kick around ideas, and he helps me see how they may look from the banker’s side of the desk. I think with my experience in production, I help Phil see some of the other side.

Phil: Actually, it has worked really well. Josh had a good understanding of banking when he started, but now with a year of experience, he can look at Kayser Farms and his own customers’ operations with a new perspective.

The bank just released a new commercial featuring Kayser Farms. How was seeing it for the first time?

Josh: It was a bit awkward for me; I’m not one to be in the spotlight. The response has been overwhelming. I have had numerous people call, text and grab me, saying how they enjoyed hearing my story.

Phil: Yeah, I think it’s been great! Others can relate to what Josh is going through each year on his farm because every other farmer deals with the same thing. We also had so much respect for him that during the filming of his commercial, we offered him a job.

What does having a healthy relationship with your banker look like?

Josh: Open dialogue. I want to be able to kick ideas around with my banker and make sure they make sense for our operation. I don’t want a “yes” man; I want someone who challenges my line of thinking and brings a different perspective. My banker shares his experience and knowledge of agriculture, and I love that he also participates in a farming operation.

Phil: Also, after having been at First National for just shy of two years, I now know why employees love working here and customers love doing business here. There’s a family atmosphere, and everyone feels like they’re rowing the ship in the right direction.

What does success look like to you?

Josh: Success to me is accomplishing a goal, no matter how small. It’s also defined by the relationships a person holds. I think every mistake I’ve made was caused by quitting or giving up.

Phil: Finding whatever it is in life that you really enjoy and then doing that every day. When you look back, can you say you were happy or will you have a pile of regrets? If it’s mostly happy, I’d say you succeeded.

Bankers form relationship through farming

Ag lenders and farmers often work together through the challenges a volatile industry can bring.

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