Managing Finances Among Major Issues for Growers in a Pandemic
October 24, 2020 As Florida and the nation adapts to the COVID-19 pandemic, Florida Grower magazine is recognizing the important role businesses play in serving specialty crop producers in the state. This month, we are featuring Reggie Holt, President/CEO of Farm Credit of Central Florida.
How far back can the history of Farm Credit be traced, and what are some key services it provides Florida’s growers?
Holt: In July of 1916, President Woodrow Wilson signed legislation creating the Federal Land Bank System from which the Farm Credit System was established. For more than 100 years, Farm Credit has had a successful history of providing credit to rural communities and agricultural-related businesses. Today, Farm Credit remains an important partner of the agricultural and rural communities providing loans, leases, and other financial services.
The nationwide network of Farm Credit lending institutions are cooperatively owned by their member borrowers. This means that members share in the institution’s profits through patronage distributions, which serves to effectively lower the members’ interest rates.
Farm Credit of Central Florida, headquartered in Lakeland, serves the agricultural and rural communities in 13 Central Florida counties along the Interstate-4 corridor.
What are you hearing from grower customers on how the virus has impacted their farms and markets?
Holt: The economic shutdown in March and April touched almost every segment of our market in some way. Early on, the impacts were really dependent on the market served, like retail vs. food service due to shutdowns. Impacts included cattle being held longer on ranches due to shutdowns at meat processing plants, a decline in demand for fresh fruits and vegetables from the restaurant and hospitality industries, and an inability to easily ship and market nursery products aimed at a specific holiday, such as calla lilies for Mother’s Day.
But not all the impacts were bad. For growers who were able to supply the retail market, demand increased substantially as more consumers ate at home. Additionally, while people were staying home, they focused on improving their lawns and gardens. So growers selling into those markets have not been as significantly impacted.
Finally, while food safety has always been of paramount importance to our growers, the increased sanitation and social distancing requirements have resulted in some increased costs and inefficiencies.
From a financial standpoint, what are some key points growers need to know heading into the coming season and new year?
Holt: From a financial standpoint, it is important to understand your costs, know your market, and have sufficient capital to help get through down times in the market.
Cash flow is a top concern for many business owners, and interruptions to that can be challenging. Business owners should evaluate their working capital requirements, and if they don’t have access to a line of credit to fund temporary shortfalls, they should consider getting a line of credit to prevent cash flow interruptions.