Moody's Corporation · NYSE:MCO
Moody's — Moody's Analytics — Ag Webinar: Can Your Producers Afford to Keep Farming (March 2019)
40 slides from Moody's's conference presentation, Mar 28, 2019
Slide 1: Can Your Producers Afford to Keep Farming
Can Your Producers Afford to Keep Farming Doug Johnson, Director, Sales Moody’s Analytics | Omaha, NE March 28, 2019
Slide 2: Can Your Producers Afford to Keep Farming
Can Your Producers Afford to Keep Farming Agriculture today is at a crossroads for both Ag Producers and Ag Lenders alike. Suppressed commodity markets and financial strain are creating an uncertain future in Agriculture. • Many Producers are faced with life changing decisions to their operation and
Slide 3: Presenters
Can Your Producers Afford to Keep Farming Presenters Doug Johnson Director – Sales Management Moody’s Analytics Mike Hinton Ag Banking Consultant Midwest Cloud Computing Jason Kuzel Training Specialist Moody’s Analytics Ag Webinar: March 28, 2019 3
Slide 4: Agenda: The Year of Tough Decisions
Can Your Producers Afford to Keep Farming Agenda: The Year of Tough Decisions The challenge for Producers and Lenders going forward hinges on four critical aspects: • Financial Acumen • Understanding the Operation • Know the Numbers and Have a Plan • Understanding the Producer: Tractor Drivers or Bu
Slide 5: Who is Moody's
Who is Moody’s Ag Webinar: March 28, 2019 5
Slide 6: Moody's Analytics Loan Origination SaaS Platform
Moody’s Analytics Loan Origination rN SaaS Platform Product Solutions Integrated Tools Data Integration Lending Stress Cloud Testing Credit Document Contact Bureaus Mgmt. Mgmt. Ag Peer Ag Benchmarking Scorecard Lender App MOODY'S ANALYTICS Ag Webinar: March 28, 2019 6
Slide 7: Ag Peer Comparison: Internal & External
Ag Peer Comparison: Internal & External Ag Webinar: March 28, 2019 7
Slide 8: Ag Peer Comparison: Internal & External
Ag Peer Comparison: Internal & External Benchmark to Bank | State | Regional | National Ag Webinar: March 28, 2019 8
Slide 9: Ag Scorecard
Ag Scorecard Ag Webinar: March 28, 2019 9
Slide 10: Ag Scorecard
Ag Scorecard Ag Webinar: March 28, 2019 10
Slide 11: The Great Divide Between Producers
Can Your Producers Afford to Keep Farming The Great Divide Between Producers • Partner with those than “Are” and those that “Can” vs. those that “Won’t” • You can’t just look at the numbers – you have to look at their behavior • Some “ARE” changing • Reducing personal spending / Family Living / Vaca
Slide 12: Sustainable Farming: What Got You Here Won't Get You There
Sustainable Farming: It’s not about farming for today. It’s about farming for 10 years from now. MARQ TM Lender App What Got You Here Won’t Get You There Ag Webinar: March 28, 2019 12
Slide 13: Farming & Ranching Lifespan
Farming & Ranching Lifespan If you Farm / Ranch for 30 years, how many years do you have left? Ag Webinar: March 28, 2019 13
Slide 14: Farming & Ranching Lifespan
Farming & Ranching Lifespan If you Farm / Ranch for 30 years, how many years do you have left? Ag Webinar: March 28, 2019 14
Slide 15: Farming & Ranching Lifespan
Farming & Ranching Lifespan If you Farm / Ranch for 30 years, how many years do you have left? Ag Webinar: March 28, 2019 15
Slide 16: Do they ever Really Retire?
Farming & Ranching Lifespan If you Farm / Ranch for 30 years, how many years do you have left? Do they ever Really Retire? Ag Webinar: March 28, 2019 16
Slide 17: The Great Divide Between Producers
Can Your Producers Afford to Keep Farming The Great Divide Between Producers • Financial Acumen • Understanding their Operation • Do they truly “Understand” today’s farming practices • Are they Intellectually Curious (constantly learning & active groups) • Are they Tractor Drivers or do they run a B
Slide 18: The Great Divide Between Producers
Can Your Producers Afford to Keep Farming The Great Divide Between Producers • Remaining Relevant & Sustainable • Are they “Surviving” or finding ways to “Thrive” • Do they have a plan that shows a 1-5-10 year plan • Can they answer: • Today: Where are they at today • Need: Where do they need to be
Slide 19: The Great Divide Between Producers
Can Your Producers Afford to Keep Farming The Great Divide Between Producers • Knowing What Makes Sense • Understand Stress • Financial limits: how long can they continue like this • Emotional limits: watch for “fraud-like” behavior • Are they going for a Home-Run • Traditional mindset: this is what
Slide 20: Can Your Producers Afford to Keep Farming
Can Your Producers Afford to Keep Farming MARQ TM Lender App Ag Webinar: March 28, 2019 20
Slide 21: #1 Golden Rule
Can Your Producers Afford to Keep Farming The Great Divide Between Producers #1 Golden Rule: • Communicate Early and Often • Be Clear • Be Consistent • Remove Emotion • How’d You Go Broke: Gradually or All-Of-A-Sudden • Let Data MARQtell your story TM • Present options: show multiple scenarios • Sho
Slide 22: Peer Benchmarking: Where Are You?
Can Your Producers Afford to Keep Farming Peer Benchmarking: Where Are You? • Ag “Peer Benchmarking” • Internal • State • Regional • National • Tell the Story • Remove Subjectivity • You’re not the “Bad Guy” • Create Your Value Ag Webinar: March 28, 2019 22
Slide 23: This is where it gets dicey…
This is where it gets dicey… • When should you hold back? • Remain Relevant • When should you move forward? • Remain Sustainable Ag Webinar: March 28, 2019 23
Slide 24: Changing Technology…
Changing Technology… Ag Webinar: March 28, 2019 24
Slide 25: Technology in Agriculture
Technology in Agriculture Ag Webinar: March 28, 2019 25
Slide 26: Technology in Agriculture
Technology in Agriculture Ag Webinar: March 28, 2019 26
Slide 27: Technology in Agriculture
Technology in Agriculture Ag Webinar: March 28, 2019 27
Slide 28: Technology in Agriculture
Technology in Agriculture Improve Herd Genetics: • Implant genetic superior embryo's into cheap cows • Use as “host” Microchip & GPS: • Track Cows Steps • Movement • Body Temp • Health • Not new but being adopted Ag Webinar: March 28, 2019 28
Slide 29: Blockchain in Agriculture
Blockchain in Agriculture FSA: Know Your Farmer | Know Your Food Ag Webinar: March 28, 2019 29
Slide 30: Driverless Cars: Impact to Agriculture
Driverless Cars: Impact to Agriculture • Your kids may never learn how to drive • Transportation will be a “Service” vs. “Ownership” Ag Webinar: March 28, 2019 30
Slide 31: Technology in Agriculture
Technology in Agriculture • Rapid advancement of technology in the Ag space • How quickly it’s spreading across the globe • Computer power DOUBLES about every 18 months Ag Webinar: March 28, 2019 31
Slide 32: Ag Needs Technology and Experience
Ag Needs Technology and Experience Need BOTH to Avoid Pitfalls Ag Webinar: March 28, 2019 32
Slide 33: Business IQ: Management Factors
Business IQ: Management Factors Customer Checklist Green (3-4 points*) Yellow (2 points) Red (1 point) 1. Knows cost of production Written In head No idea 2. Knows cost of production by enterprise Written In head No idea 3. Goals- business, family & personal Written In head No idea 4. Record keeping
Slide 34: 7 Tips for a Strong Marketing Plan
7 Tips for a Strong Marketing Plan Source: ABA American Bankers Association Ag Webinar: March 28, 2019 34
Slide 35: Top 12 Lending Tips for 2019
Top 12 Lending Tips for 2019 1. In today's economic environment “base hits,” or incremental improvements, compared to “home runs” will be more sustainable moving forward. 2. Have difficult conversations early • It is best to deliver bad news early in the conversation rather than dragging it out • Do
Slide 36: Top 12 Lending Tips for 2019
Top 12 Lending Tips for 2019 5. Be on the lookout for excessive credit card debt (alternative financing) and multiple refinancing requests. 6. Look closely at a trend analysis because trends often establish a pattern • Do not rely on schedule F for trends. Farmers will hide problems by manipulating
Slide 37: Top 12 Lending Tips for 2019
Top 12 Lending Tips for 2019 9. Niche farming and value added is becoming more prominent and provides many opportunities for young and beginning farmers. • Things you would not even consider in the past you need to look at now. • Need to have a well thought out business plan before embarking on nich
Slide 38: Remember…. Never Confuse Self-Worth With Net-Worth
Remember…. Never Confuse Self-Worth With Net-Worth Ag Webinar: March 28, 2019 38
Slide 39: Thank You!
Thank You! 39
Slide 40: moodysanalytics.com
Doug Johnson 402-344-5217 douglas.Johnson@moodys.com moodysanalytics.com
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