Leasing Option Good Business Decision for this Farmer
When weather, markets, inflation, and other uncertainties try your patience, it’s good to know there are options available that may be just what your business operation needs to keep it moving forward successfully.
That’s what Dan Hunsucker discovered with the leasing program through Carolina Farm Credit. Dan is a third and fifth generation farmer, depending on how you look at it and where he happens to be standing. On the farm where he lives, his grandfather started farming it in 1926, followed by his dad. When he travels down the road a piece through the beautiful rolling hills of Catawba County, he arrives at a farm from his mother’s side, and where he is the fifth generation to add to a strong agricultural legacy.
He farms several hundred acres of wheat, soybeans, corn, and grass for hay. He runs a 150 cow/calf operation, too. For anyone looking to buy local, homegrown, quality beef, check out his direct-to-the-consumer Rock Barn Beef or find him at the Conover Farmers Market.
Dan also represents the farm community by serving on the Carolina Farm Credit Board of Directors. Service to both the local and greater community is part of his approach to life, as evidenced by the 20 years he was a member of the Catawba County Board of Commissioners.
A few years ago, when he needed a way to enhance his farm’s capacity for handling the grain harvest, he turned to Carolina Farm Credit. As far back as he can remember, his family has been part of the Farm Credit family, securing loans for several different business transactions. Suddenly, Dan was faced with some decisions, including changing the direction of his farm.
His family had owned a dairy but that didn’t seem to be viable for the farm’s future. “When my dad passed away in 2007, we decided to get out of the dairy. We sold the dairy cows in 2010. Then my mother’s health worsened. I was looking for different options for the farm.” he says.
Grain Bin with Wet Bin Critical to Harvest
The Farm Credit leasing program opened the opportunity for him to expand his grain operation. He put up a 20,000-bushel grain bin with a wet bin, which made a big difference. Before, when the grain dryer and trucks would get full, he had to stop harvesting. That is costly when it comes to time, labor, and the potential to lose grain if it can’t be harvested in a timely manner.
“With the wet bin, we are able to keep harvesting and it gives us time to get the grain dried,” he explains. “This helps us continue the harvest and also hold onto grain longer, if needed, to wait for better prices.”
Pole Barn Replacement for Feeder Calf Operation
When a winter snowstorm dumped too much snow on the top of an older pole barn, causing it to collapse, Dan learned that his insurance covered vandalism, wind, and fire but load insurance required a special rider to his policy to be covered. Dan again turned to Farm Credit for a lease for a new barn. “It has worked out really well for us,” he shared. He outlined several benefits:
- Farm Credit uses contract financing, which means they pay the vendors as the barn is being built. That equates to minimal upfront capital outlay for the farmer, which can optimize cash flow. Only the first month’s lease amount is required.
- When the barn was completed, it was put on a lease. That is considered a business expense and the payments are fully tax deductible which helps reduce your taxable income at the end of the year. That’s another big advantage, says Dan.
- It’s 100 percent financing at a fixed rate. “With interest rates going up on everything, you can rest assured knowing what your interest rate is,” he says. “It helps you sleep a little better.”
- The payment schedule is flexible. Farm Credit offers customer-members the option to set up lease payments monthly, quarterly, semi-annually, or annually. Dan set up his payments annually to coincide when his farm income is greatest.
Reflections, Advice for Others
The leasing program has been quite beneficial for his farm operation, and Dan says it can be a good option for others, depending on what type of operation you have. His advice is for others to learn about the different products and options available to determine what might be beneficial based on your operation and business plan. It’s something he says he wishes he had done when he was a younger farmer.
Faith, Family, and Farm Credit
Leasing with Carolina Farm Credit has offered Dan many financial benefits, but something that also stands out to him about his lending institution is their culture. “Farm Credit is a really strong faith and family-oriented organization.” That is important to this farmer. After all, faith and family are ingrained in him, with his roots extending back to when his family founded St. John’s Lutheran Church in Catawba County in 1798.
In part 2 of this 2-part series, Jeremy Lee, Carolina Farm Credit leasing administrator, shares more on the benefits of leasing and how it can be an important tool for your business.
By Leah Chester-Davis