Customer. Stockholder. When you join Farm Credit, you assume both roles, which makes for a highly rewarding long-term relationship.


When you joined Farm Credit, you chose to participate in a unique organization, one that considers you as a customer and a stockholder. This "dual relationship" means that the connection between you and Farm Credit is unlike your link with any ordinary lending institution.

In this article, we examine what makes this relationship so rewarding. We'll hear from a couple of members: one farmer whose family has partnered with Farm Credit for three generations, and a young and energetic first-time borrower who recently launched a new agricultural business.


C. W. Gravatt and Son, Inc.
Allentown, N.J.

Roger Gravatt runs a fourth-generation, 1,250-acre hay and grain operation in central New Jersey. Roger's great-grandfather started the business 84 years ago, and his 76-year-old father, Carlton, is still on the farm every day.

For decades, the Gravatt farm ran a dairy enterprise, but over time Roger and Carlton shifted operations from dairy to grain and hay, which are their full-time businesses today.

"We certainly didn't start the hay operation up all at once," said Roger. "Our dairy operation had a small hay enterprise that sold its excess hay to local farmers. The transition came gradually. We started with one load a week and kept growing. We had some trucks, trailers and hay equipment. Today we have two tractor-trailers on the road full time.

"Margins in dairy were narrow and finding labor in northern New Jersey was difficult. We saw that hay could make a profit since there are so many horse farms in this area, so the market for hay is strong. Eventually, it got to the point where we ran out of our own hay, so we bought more at hay sales in Pennsylvania and brought it here for resale."

The Gravatts gave up their dairy operation in 1987. "We saw that we were cutting ourselves too thin because we didn't have a herdsman and we were running both enterprises ourselves. Something had to go, and we were confident in the market for hay.

Today we keep two tractor-trailer trucks on the road all the time and supply about a hundred horse operations of various sizes. We plan to focus more on hay this year and streamline our grain operation."

On his relationship with Farm Credit, Roger says, "We've stayed with Farm Credit since the late '60s. I keep my eye on the local bank scene. Our local bank merged several times in the past five years, and with every merger they reduced staff and lost that local feeling. As far as agricultural lending, that's just not their field of expertise."

Gravatt's loan officer is Steve Makarevich, of First Pioneer Farm Credit's Lebanon, N.J. office. "Steve is the best that I could ask for," said Gravatt. "His office is more than an hour away, but he is in my area several times a week. In fact, I once called the office to talk to him about a Country Home Loan for our daughter and he was in my driveway within ten minutes!"

Gravatt says that working with Steve Makarevich on an enterprise analysis is something he would never get from any other lender. Makarevich explained, "By studying his enterprise analysis information, Roger saw that the overhead of driving long distances to obtain hay — trucks, registration, insurance and fuel — is high so he is adjusting the business once again to sell more of his own hay and to cut down on costs."


Locust Grove Farm
Salt Point, N.Y.

John Conklin, 27, is part of First Pioneer Farm Credit's Young, Beginning and Small Farmer Program.

He recently launched Locust Grove Farm as a start-up enterprise with 34 milking cows and 25 head of youngstock, and he was helped out in large measure by a Farm Credit capital loan plus an operating loan for rent, feed and other expenses.

John graduated from SUNY Cobleskill in 1992 with an associate's degree in dairy production management. He worked as a herdsman for Lo-Nan Farms in Pine Plains for four years before striking out on his own at age 25. While at Lo-Nan, he accumulated equity in cows and youngstock by receiving payment on paper for the milk from those cows, in addition to salary and benefits.

He selected Farm Credit as his lending institution because of its track record working with young farmers through the Farm Service Agency (FSA) guarantee program. He also did a lot of homework up front before approaching Farm Credit with his request for credit.

"I prepared for several months for my meeting with Farm Credit because I wanted to show that I understood the financial aspects of the business. I prepared a yearly operating budget with expenses and income and a balance sheet listing my assets and liabilities.

"I also projected slightly higher expenses and income based on a conservative milk price and production per cow. I based my projections on Farm Credit's Dairy Farm Summary and my knowledge of farm costs from my experience at Lo-Nan Farms (feed prices, forage prices). I also worked out feeding programs and costs with nutritionists and submitted a written summary with a little about my goals and myself."

Paul Herrington, John's loan officer at Farm Credit's Claverack, N.Y. office, said, "I was impressed that John arrived for our meeting with a written plan, a budget and clear, well thought out goals."

Today, John Conklin rents a dairy farm with 54 tie stalls, a pipeline, a barn cleaner, an automatic feed cart and two silos. He currently milks about 60 cows twice a day and raises about 40 head of youngstock on a neighboring farm. His is a one-man operation, but he receives assistance from his father for emergencies or repairs, and a high school student helps out three nights a week.

Regarding Farm Credit, John said, "Paul Herrington was sincere, took my ideas seriously and called me the minute he had an answer for me. I was very pleased with the entire process. I also received incentives, such as waiving the FSA guarantee fee and reduced tax and records fees. Farm Credit is a great partner to have on your side when you are starting out a new business in agriculture."

For more information, contact us at info@firstpioneer.com today!

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