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Agriculture finance 4 min read

5 ways farmers can harvest financial success

Sow the seeds for prosperity with sensible advice and flexible solutions tailored to agriculture.

A farmer’s business is unlike any other, and specialized knowledge from their banker should be considered essential. As global markets, commodity prices, land values, environmental regulations are all known to impact an operation’s success, interest rates have emerged as a leading factor in financial decision making. The Bank of Canada has increased their policy rate in short order, and with further hikes expected to come, servicing debt will be among the most pressing concerns that farmers have today.

CWB doesn’t just have the depth of expertise and a breadth of financing solutions to mitigate risk in this new economic reality, the CWB Agriculture Banking team understands just how engrained the business of farming is in their clients lives and values. "It’s their history and their legacy, where they work and live and celebrate. It’s all tied together,” says Trevor Sproule, Assistant Vice President and Head, Agriculture Banking.


Here are five ways to set your farm up for success today, and most importantly, tomorrow.


  1. Manage your input costs

    An important part of what CWB’s agriculture team offers is a deep understanding of the financial fundamentals in farming. The reality that rising costs is affecting every business, especially farming, speaks to the importance of maintaining healthy cash flow, Knitel says. “We are very mindful that farmers need enough working capital to make their best management decisions – and not be forced to make bad ones,” she adds. To help, the CWB Agriculture Team works to make sure farmers’ loan payments work in sync with the operation’s cash flow; as Sproule notes, scheduling loan payments in the spring for a cow producer that sells in November does not make much sense.


  2. Ensure payment flexibility

    Farmers might benefit from an interest-only payment schedule on loans for new farm facilities (like a barn, for example), at least until the facility is completed and productive. The Agriculture Team might also help farmers improve their cash position by offering longer amortization periods – up to 35 years – to reduce loan payments, or by providing leasing options for equipment financing. “Maybe you can arrange a five- or seven-year lease on equipment with a 40% residual and cut your recurring equipment costs in half – that’s a huge benefit to the farm,” Sproule says.

    With rising input costs expected to be a prolonged trend – especially seed, fertilizer and chemicals – Sproule and Knitel are supporting clients to buy ahead. “Many clients want to buy fertilizer now to use next year,” Sproule says. “We understand that, it’s why we need to consider loaning them the money to help them do that”

  3. Flexible leasing options

    Knitel adds that people outside the sector often do not realize how quickly technology is reshaping agriculture – or how eager farmers are to use tech not only to improve efficiency, but also to reduce their environmental footprint. She calls farmers “true early adopters,” and the CWB Agriculture Team can support them with flexible and responsive financing and leasing options through CWB National Leasing.

    With CWB’s support, one client recently bought a high-tech spot sprayer that distributes herbicides directly on weeds rather than the whole field, resulting in lower costs, less environmental impact and a 40% reduction in chemical use. Another client – again with CWB financing – is buying new headers for his combine 42 feet wide rather than 32, consuming less diesel fuel, leaving more straw in the field for moisture preservation, and resulting in less wear-and-tear on the farm tractor. When it comes to technology, “we just have to keep up with our clients and make sure we can help, whether it’s finance or lease or covered by cash flow,” Knitel says. “On tech, they are way ahead of us.”


  4. High-touch forecasting

    Sproule and Knitel acknowledge that their style of banking is a “high-touch” process, one that’s based on frequent and early conversations with farmers – dealing with issues before they become problems. In addition to the new ability to offer AgriInvest accounts – a must-have risk management tool that should in every producer’s financial toolbelt – their team is structured to make problem-solving easy: the CWB Agriculture Team works out of eight key agricultural centres throughout Western Canada, and it includes a credit specialist to make dealing with the bank efficient and simple for clients. And clients have taken notice.

    “I had one phone me last year to thank us for what we did and tell me it was the best harvest he’d ever had,” Sproule recalls. “He knew he was set up right. He knew appropriate financing was in place. Everything we did just took the stress off his shoulders.”


  5. Succession planning
    The CWB Agriculture Team can also help with financing and advice for farm families navigating intergenerational transitions (for instance, when children move back to the family farm); among her other credentials, Knitel is a certified Family Enterprise Advisor (FEA). The different experience CWB offers farmers, Sproule says, “starts with our products and structures that aren’t as widely available at other banks – longer amortizations, interest-only loan availability, easier debt service tests and other things – and then ends with the support we can give on family transitions and other long-term issues.” While the right products and services are of course important to clients of any bank, the CWB Agriculture Team offers something more: a team of dedicated experts who are committed to helping farmers and who deeply understand their unique business and family challenges and priorities.