AgTexas Farm Credit and Great Plains Ag Credit Announce Merger
On an icy December morning where most farmers and ranchers would be scrambling to save crops, livestock and equipment, two West Texas-based agricultural lenders announced a merger at the Bayer Museum of Agriculture in Lubbock.
Lubbock-based AgTexas Farm Credit Services and Amarillo-based Great Plains Ag Credit have merged as equal partners into the new AgTexas Farm Credit comprised of 120 employees in 16 offices servicing 40 counties in the South Plains and Central Texas regions. According to outgoing- AgTexas CEO Mitchell Harris, the area reflects $10 billion of agricultural purchasing power.
Hall of Fame Rodeo Announcer and spokesman of the newly-merged AgTexas Farm Credit Services Bob Tallman said of the weather, “I’m big on snow and ice because when it melts off I’m going to have some moisture.”
Tallman said small farmers and ranchers understand more intimately than factory farms how to produce quality products, while maintaining the health of the land and community surrounding it. He said those farmers and ranchers are, “stewards of the land and AgTexas Farm Credit is the steward of the funding of the stewards.”
Tallman is not only the spokesman of AgTexas, but also a producing member of the institution.
Mergers and acquisitions can reduce competition and hurt the free market, but Tim McDonald, CEO of GPAC and the new CEO of AgTexas, said combining the two lending institutions allows them to better serve their co-op members with their increased resources.
“One great things about this merger is we don’t have overlapping territories. So we’re able to retain all of our employees, and able to keep those people in those capacities so they can serve the membership moving forward.”
McDonald said the largest benefit he perceives for the individual consumer is the expansion of programs such as crop insurance, leasing and cash management services, and pushing for legislation in support of farmers and ranchers. Legislation includes passing farm bills and maintenance of funding to programs that act as a backstop to farmers during low-production periods.
Both AgTexas and GPAC’s original companies were formed in the 1930’s during the Depression and Dust Bowl era as a result of the Farm Credit Act of 1933 before eventually being purchased from the government.
Farmers and ranchers in America faced many hardships during that time and since, including problems with overproduction, falling commodity prices and parity which led to the American Agriculture Movement in the late 1970’s.
According to McDonald, area farmers and ranchers in the region have recently enjoyed years of success with good commodity prices and production.
“Our farmers are well positioned today to be able to continue to weather the storms that are out there and the ups-and-downs that are ahead. But you never know, in this business markets can cycle quickly and weather can impact us,” said McDonald. “Having a resource that is dedicated and there for the principal purpose of providing good, stable capital to the area’s farmers and ranchers is critical to the long-term success of our agricultural industry.”
Bob Tallman, spokesman and member of AgTexas, said the bank will be bigger than ever before post-merger and will continue to grow. However, he believes the money will stay in the region to the benefit of the farmers and their communities rather than returning to centralized lending institutions or the government.
“Any time that you get Big Government in agriculture that has no understanding of faith in agriculture,foundation in agriculture… try to regulate production, agriculture starts going backwards,” said Tallman. “AgTexas is not a government. It is a peoples’ way of being successful while earning money for the bank.”
The post-merger AgTexas serves more than 1,800 members and reportedly has more than $1.3 billion in assets.