Curt Covington on Financial Strategies for American Farmers

North American Ag Spotlight: Agriculture & Farming News and Views

In this week's North American Ag Spotlight Chrissy Wozniak talks to Curt Covington, Senior Director of Managed Accounts at AgAmerica, who shares his extensive insights into the state of American agriculture. With over four decades of experience in agricultural banking and a rich background in teaching ag finance, Covington provided a comprehensive overview of the industry's current landscape and future challenges.
Covington's journey began in California's Central Valley, where his family farmed nut crops, vineyards, and cotton. He transitioned to agricultural banking in 1979, influenced by his father's advice on the critical role of bankers and landlords in farming. His career saw him hold significant positions at Rabobank, Bank of the West, and Farmer Mac. Currently, at AgAmerica, he leads the Client Success Group, helping clients achieve greater success through strategic lending and expertise.
Covington discusses the implications of the recently released State of American Agriculture report. One of the critical points was the decline in the number of U.S. farms, now below 2 million for the first time. This decline is not just a statistical concern but a pressing issue affecting the backbone of rural America. The reduction in family farms impacts funding for essential services like hospitals, schools, and emergency services in rural communities.
Several factors contribute to the 14% decline in U.S. farms and the 8% reduction in farmland since 1997. Urban encroachment and the graying of rural America play significant roles. Many farmers, with an average age between 58 and 64, lack successors to take over their operations. The high cost of farming, including soaring input costs and land prices, further exacerbates the issue.
Despite the decrease in the number of farms, the average farm size has increased by 7% since 2002. This trend towards larger farms brings both benefits and challenges. Larger operations can achieve greater efficiency, leveraging advanced technology and equipment to reduce costs. However, smaller farms struggle to keep up, especially given that farmers do not set commodity prices, leading to unpredictable profitability.
Succession planning remains a significant challenge for multi-generational farms. Only 23% of family farms have a succession plan in place. Covington highlighted the importance of strategic planning and decision-making in ensuring the continuity of farming operations. The reluctance of older generations to hand over control and the complexities of family dynamics often hinder effective succession planning.
Curt Covington's insight sheds light on the pressing issues facing American agriculture. He underscores the need for strategic planning, efficient resource management, and support for family farms to sustain the backbone of rural America.
Learn more about AgAmerica at https://agamerica.com
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This episode is sponsored by the American Society of Agriculture Consultants, learn more about their upcoming National Conference in Fort Myers, Florida at https://www.agconsultants.org/2024_annual_conference.php
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The American Society of Agricultural Consultants will hold its 2024 Annual Conference in Fort Myers, Fla., beginning with a reception on Sunday, November 3. Conference sessions will begin on Monday and continue through Tuesday morning. That afternoon, attendees will be touring local agriculture from approximately noon to 6 p.m.
Learn more at https://www.agconsultants.org/2024_annual_conference.php

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