It’s unfortunate, but it happens — farmers sometimes get turned down for loans. But in the digital age, farmers are starting to flip the script by researching and scrutinizing lenders more than ever, says John Barlow, president of Barlow Research Associates. Tech-driven expectations of immediacy have complicated the farmer-lender relationship.

“With customers looking more and more to convenience, bankers will have to work a lot harder for repeat business,” Barlow says.

How farmers communicate with lenders has changed considerably over the past two decades. There are more options than ever — in-person visits, phone calls, voicemails, emails or even texts. What level of service do farmers expect in each of these communication outlets?

Barlow surveyed farmers to find out. The research suggests that farmers prefer roughly one in-person visit from their lender annually, and about two calls per year from their account officer. They expect a phone call to be returned in 1.7 hours, on average, and expect their emails to be answered in about 2.1 hours.

Farmers “touch” their bank an average of 18.6 times monthly, Barlow’s research found, but over half of these connections are done through a computer or mobile device.

Why you leave

But when farmers leave a bank, it usually has nothing to do with technology, Barlow says.

“They leave because of general service,” he says. “They don’t feel appreciated; they don’t feel respected.”

Even so, of farmers surveyed, Barlow found only 7% who added a bank in the past year did so due to dissatisfaction with their current lender. Instead, farmers tend to add lending sources for more pragmatic reasons. More than a third (35%) did so for credit and lending purposes, with 26% pursuing lower fees and 23% seeking more convenience.

Capital is a bit more costly now, with interest rates ticking higher. “When farmers go looking for a bank, they simply want someone who can lend them money,” Barlow says.

On the flip side, banks must look at risk management when balancing risk among their farmer-customers, says Nathan Kauffman, assistant vice president with the Federal Reserve Bank of Kansas City. In the fourth year of a downcycle, farmers should be carefully guarding their assets, he says — and banks carry a somewhat similar attitude, too.

“Borrowers and banks alike need risk management practices in place in a downturn,” he says.

Pressure varies by region

Larger-than-expected production in some parts of the Corn Belt has proved a silver lining for some community and regional banks.

“That has helped cash flow and working capital, which has given some lenders some room to grow,” he says, adding, “No one’s out of the woods yet, though.”

Some predict 2017 may have only been year four of a nine-year downcycle. “A lot of liquidity is already gone,” concurs Curt Hudnutt, head of rural banking for Rabobank.

Increasingly, Hudnutt sees his customers embrace diversification. That means spreading risk and broadening income streams by raising a mix of different crops or livestock. But it doesn’t stop there.

“We’re also seeing diversity on the balance sheet,” he says. “Diversity with lending sources. Diversity with loans, with leasing arrangements, and even with farm equipment strategies.”

Keeping it personal

The value of personal connection isn’t any less important in the digital age, Barlow says. Lenders need to prove they’re accessible, and perhaps even more importantly, they need to know their farmer-customers.

“The worst thing you can do when introducing yourself is asking about their operation,” he says. “Farmers expect you to know a little.”

Hudnutt is even more firm on that opinion. “If your lender doesn’t have any insights on your business, it’s time to find a new one,” he says. “This is a critical time in the industry. Lenders should be bringing more to the table now than they did 10 years ago.”