National bank looks to make major investment in ENC farms

Is it a good time to be in agriculture in Eastern North Carolina? Wells Fargo seems to think so.

The national bank and financial services company is making a major investment in agriculture lending in North Carolina, with loan officers in a number of ENC cities, including Kinston.

Duke Piner, who oversees the area as principal agriculture industry specialist in Greenville, said the initiative began with the acquisition of Wachovia.

“When the Wells Fargo-Wachovia acquisition occurred, I think one of the things Wells Fargo recognized in their analyzing the markets, was the tremendous amount of success that North Carolina has in the agricultural community,” Piner said.

He added, “There was a focus on putting agricultural specialists in the Eastern North Carolina market.”

A number of local farms are working with or have worked with AgCarolina Farm Credit, which has an office in La Grange and offers many of the same services.

Dave Corum, AgCarolina Farm Credit’s president and CEO, said he’s noticed a lot of action among lenders who want to take advantage of the situation provided by an exceptionally good 2012. Last year, a drought in the Midwest raised prices and provided good returns for farmers on the East Coast.

“Farm Credit’s been here for 100 years, and they’re wanting to get in, in 2013,” Corum said. “But, things are good, and especially up in your area. Our growth in our branch in Lenoir County is up 9 percent in growth alone, over last year. There’s people buying new farms, and there still is expansion. Folks are trying to get bigger to get more profitable.”

Corum said he’s optimistic about the future, as farms in the United States serve needs worldwide.

However, circumstances change from year to year.

“It’s really more or less a yearly thing,” said Walter Adams, agriculture and natural resources technician with the Lenoir County Center of the N.C. Cooperative Extension. “As far as tobacco, for example, there’s not been a lot of money put into it to expand their operations, because they’re more set on a contract basis, and the price has fallen off the last couple years.”

He added, “They’re getting base premiums, but there’s not been a whole lot of interest in putting a lot of money into it. Basically, with the cost of it and everything, you’re just breaking even, more or less.”

Adams noted there was a lot more expansion 20 years ago.

On the ground, opinions are mixed. Large amounts of rain this year made a significant impact on local crops.

“Last year was a pretty good year for everybody,” said Kendall Hill of Tull Hill Farms in northern Lenoir County. “(This year) is shaping up to be something entirely different. Most all of the growers are losing a lot of their tobacco because of all of the rain we had. It’s also affected the cotton crop. I don’t know what it’s done to the corn crop, but it probably hasn’t affected it — the price of corn is down $2 from last year.”

Hill said farmers planted a large amount of corn because of the 2012 prices, but the sheer quantity of corn hitting the market is driving this year’s price down. Also, some of the tobacco is getting out of the fields later than it should.

“Actually, people are really, really behind because of the rain,” Hill said. “We had a couple weeks where we couldn’t do anything, and tobacco’s deteriorating in the field rapidly. When you see all this orange color in the field, that’s not good. That means it’s getting overripe, and you lose a lot of weight, and the yield from the tobacco is going to be off quite a bit.”

He estimates that for 1 acre of land, there’s going to be an $800-$900 profit loss in the local tobacco crop.

Warren Hardy, near Seven Springs, said on Aug. 7 it appeared the weather had taken a turn for the better.

“We’ve had a very mild summer, as far as temperature-wise, but … what we needed was sunshine and less rain,” Hardy said. “Of course, it quit raining, and we’ve had higher temperatures, and the crops look much better.”

Hardy said he’s unlikely to look for new land or upgrade equipment right now.

“I think as far as our income is going to be down, I’m going to say 30 percent, mainly due to the prices we’re getting paid for our crops,” Hardy said. “We had historically high prices last year. And, the country as a whole is looking at a good corn crop. Anytime you have a good corn crop, it puts a pressure on prices — they go down. And that’s exactly what’s happened the past three weeks.”

Wes Wolfe can be reached at 252-559-1075 and Wes.Wolfe@Kinston.com. Follow him on Twitter @WolfeReports.