Top: Paxton Pointevint gestures while telling Dougherty County Kiwanians about Southwest Georgia Farm Credit.
Bottom: Paxton Pointevint and Kiwanian Tommy Padgett discuss ag funding after the July 21 Kiwanis meeting at Hilton Garden Inn.
Agriculture is the leading economic sector in Southwest Georgia and has an impact, direct or indirect, on many businesses, as well as consumers.
On July 21, Paxton Pointevent of Southwest Georgia Farm Credit spoke to the Kiwanis Club of Dougherty County about his organization and current conditions for major area crop commodities.
Pointevent began by differentiating SWFC from Farm Bureau or the Farm Service Agency. “We are not Farm Bureau,” he explained. “Farm Bureau, they sell insurance. Farm Service Agency is a division of the United States Department of Agriculture. We are Farm Credit and we make loans, we basically lend to agriculture.”
The national farm credit system began in 1916 when the Farm Loan Credit Act was signed into law by President Woodrow Wilson. “Farm Credit is a nationwide network, a borrower-owned entity,” said Pointevint. “We share our profits at the end of every year. Twenty-two out of the last 25 years we’ve made a profit, (with a resulting) dividend distribution.” There are currently almost 90 farm credit associations around the country and in Puerto Rico, serving every county in all 50 states. Loans are primarily to farmers, agribusinesses, aquatic producers – “even though there aren’t very many aquatic producers in Southwest Georgia” - and other agricultural cooperatives.
Farm Credit is not a government entity, said Pointevint, but is government-sponsored, like Fannie Mae and Freddie Mac. It is not funded by taxpayers; it generates its own capitalization and pays its own regulator.
“The Farm Credit Funding Corporation in New Jersey,” said Pointevint, “is out selling debt instruments every day.” A lot of investors like farm credit because it carries an implied guarantee that trades very competitively, he added. “You can actually go to your investment adviser and secure farm credit bonds. Some of our largest investors are going to be the Chinese government” and Japan is very large also.
The funds generated are then passed on to a “funding bank” for farm credit associations, of which there are four in the U.S. AgFirst, based in Columbia, S.C., is funding bank for Southwest Georgia Farm Credit. “We’re part of AgFirst, so what happens is the debt comes into AgFirst. Once the debt is sold the funds come into AgFirst. AgFirst provides us with shared services like IT (Internet technology), accounting, things like that. They put a spread on those funds, then those funds are passed on down to us at our cost of funding. We then take those funds and make loans to people in Southwest Georgia.”
Southwest Georgia Farm Credit is headquartered in Bainbridge, with branch offices in Americus, Camilla, Dawson, and Thomasville. Overall, 31 counties are served stretching to Chattahoochee County on the north, eastward to Talbot County, and back south to Thomas County. SGFC has about 1,000 members and assets of around $500,000,000. The average loan size, said Pointevint, is about $500,000, “so we’re a pretty large lending institution compared to some of the local banks.”
As far as commodity crop prices, he said, “It’s been a really good five years. You think about our primary commodities – cotton, corn, and peanuts – those prices have been doing really well over the last three to five years. We’re starting to see some softening of those prices over the last several weeks, couple of months. If you’re doing business with a farmer, some of this might impact your business.”
Profit margins are down from 2012 for both corn and cotton, he said. One thing that is up is feeder cattle. “This is where you grow the steers up to about 750 pounds before you sell them. The profit there has increased about 60 cents a pound over the last two years.
Southwest Georgia is fortunate to be located above the Floridan Aquifer, one of the largest in the country, said Pointevint. “I think sometimes we don’t realize how valuable our land is here in Southwest Georgia,” despite a current moratorium on agricultural well drilling in place for almost two years. “”If you have irrigated land, you can imagine how valuable it is right now. I would say irrigated land, especially in the Mitchell and Calhoun counties area, is trading for $4,500 to $5,000 an acre. But, that’s seen as a deal compared to some of the land out in the Midwest, where it’s $9,000 to $11,000 an acre in the cornbelt.” The drilling moratorium will likely remain in place until state officials determine that the aquifer is recharging properly, Pointevint predicted.
The area’s crop diversity is also a plus, he said. “We are a hotbed of diversity. You can grow a very diverse crop mix even though we focus on cotton, corn, and peanuts. Sweet corn, you see a lot of sweet corn here. Potatoes are becoming really big in Mitchell and Decatur counties (especially the variety used in potato chips). It’s just a real diverse use of our property down here. We should be proud of that.”