Banks that serve agriculture businesses need to be as diverse in expertise and capabilities as their customers. And because clients’ needs can vary so widely, banks must find ways stay on top of the seemingly endless industry, regulatory and technology trends affecting the marketplace. To round out its member advocacy and educational resources, ABA is supported by its Agricultural and Rural Bankers Committee, which has operated for more than 100 years and includes agricultural and rural bankers from around the country who volunteer their time to provide guidance and recommendations to ABA staff.
During ABA’s Agriculture Bankers Conference last fall, the a new committee chair was named: David Coggins, SVP of ag banking at Nicolet National Bank in Manitowoc, Wisconsin. Coggins served in senior leadership positions at Investors Community Bank prior to its merger with Nicolet. He has more than 40 years of lending and leadership experience. ABA’s Ag Banking newsletter recently spoke with Coggins to learn a little more about his priorities for the committee’s work and the issues he sees facing U.S. agribusiness of all sizes.
ABA: What do you see as priorities for the ag banking sector in 2022?
David Coggins: The current farm bill expires in 2023, so as Congress works in 2022 to establish priorities for this farm bill, ABA and its Ag and Rural Banking Committee will need to be at the table to help make sure the bill maintains and improves America’s competitive position in the world. A strong agricultural industry is important for maintaining a strong ag banking industry. So given the fact we’re in a new farm bill development season, this will be an important area of emphasis. We also will continue to work to find ways to become more competitive with the Farm Credit System, especially with regard to tax fairness. And we will always stand ready to help make sure that new government policy initiatives are not harmful to American agriculture.
ABA: What is the biggest issue you see facing ag-focused financial institutions in the next few years?
Coggins: As has long been the case, American agriculture is dependent on world economic conditions because of its heavy reliance on exports. This likely means commodity prices and related input costs will be volatile over the next few years. As a result, risk management tools, skills and attitudes are likely to be more important than ever. And with that, there will likely be a greater need than ever for ag-based financial institutions to be able to effectively evaluate the business IQ of their customers.
ABA: Where does the opportunity lie in the agriculture field for innovation—e.g., new products, technical innovations or supply chain improvements.
Coggins: American agriculture has been a model of innovation and efficiency for many decades. When we think about how genetics, technology, nutrition and general management practices have advanced during that timeframe, we know that improved productivity has allowed U.S. agriculture to produce substantially more food on the same number of acres than it could just 20 years ago. This means that America’s farmers and the banks that finance them can play a huge role in helping to feed a world whose population is expected to be over 9 billion people at the end of the next 20 years. This presents tremendous opportunity for American agriculture in terms of jobs, technology, export demand and infrastructure. Ag banks’ fortunes are linked very much to the fortunes of its farm customers and as such, we need to continue to advocate for strong global positioning in the industry.
ABA: How do agriculture industry needs change depending upon area, crop or livestock type, or size of producer?
Coggins: American agriculture is very diverse in terms of geography, food type, species, size and systems. Because America’s land base is so diverse, there is room for all types and sizes of farms. These range from smaller lifestyle-type farms that depend entirely on family labor to much larger highly efficient commercial-size operations that produce a lot of jobs for the industry. Each different type or size of operation requires unique business models, expertise and banking needs. This provides opportunities for all types and sizes of banks with different business models to effectively serve the needs of that wide range of agricultural producers.
ABA: How do you see ABA’s Agricultural and Rural Bankers Committee and the association’s efforts making a difference for farmers, ranchers and the banks that serve them?
Coggins: The ABA agriculture committee remains heavily focused on the ongoing financial viability of its customers. A strong and viable American agricultural industry is very important to the banks that serve its producers. America’s ag banks can continue to make a difference for farmers and ranchers and their banks by helping to make sure the banking industry can remain competitive with the Farm Credit System lenders in spite of its tax subsidy. Many parts of rural America depend heavily on a healthy ag and rural banking infrastructure to get the capital they need from people and institutions who understand their unique needs.
Editor’s note: In March, ABA is celebrating National Agriculture Month. Learn more about ABA’s agriculture banking resources this month and all year long.