Ep. 80 Supporting Ohio Ag with Ag-LINK with Treasurer Robert Sprague
In this episode of AgCredit Said It, host Libby Wixtead discusses the Ohio Ag Link program with Ohio's 49th Treasurer of State, Robert Sprague. The conversation focuses on the enhancements made to the Ag Link program to help farmers maximize their return on investment (ROI). Treasurer Sprague explains the program's history, its recent changes, and how it aims to support farmers facing financial hardships due to rising costs and environmental challenges. The episode highlights the program's increased funding, higher loan caps, year-round access to capital, and specific relief measures for farmers affected by drought and avian flu. The discussion underscores the importance of listening to farmers' needs and adapting financial programs to better serve the agricultural community.
- Transcription
Speaker 1 (00:08):Welcome to AgCredit Said It, your go-to podcast for insights on farm finance and maximizing your return on investment. Join us as we talk to industry leaders, financial experts, and area farmers, bringing you skillful advice and strategies to grow your farm's financial future Ag credit setting where farm finance goes beyond the balance sheet.
Libby Wixtead (00:39):Welcome to Ag Credit Said It where we take you beyond the balance sheet of farm finance. In this season, we are focusing on ROI, helping your farm operations return on investment. I'm your host, Libby Wickstead, and today's topic is an excellent example of taking advantage of programs available to capitalize on cost savings, which has a direct impact on your ROI am fortunate to have with me. Ohio's 49th treasurer of state Robert Sprague in his role since 2019. He serves as the chief investment officer for Ohio's investment and debt portfolios overseas. The daily cash flows of state monies in the fall of 2021, treasurer Sprague unveiled changes to the Ohio's AG Link program, increasing funding and parameters. In December, 2024, the program was enhanced to include savings for farmers impacted by last summer's drought, and as recent as February of this year, the program focused on operations facing hardships caused by the avian flu outbreak. Mr. Sprague, welcome.
Robert Sprague (01:46):Hey, thanks for having me, Libby. Now, you told me earlier that you're from Marion, Ohio and that's where you do your work and approve those loans for Ag Credit. And I'm from Findlay, Ohio, so we're fellow Flatlanders, so I already like you. So we're going to have a great podcast here and a great time together. So thanks for having me on.
Libby Wixtead (02:08):Yes, you're welcome. For us to get started, can you tell us a little bit about your role as treasurer of the state?
Robert Sprague (02:16):Sure. I mean, we invest, we protect and we issue debt. We have a 25 billion portfolio and one of the things that our ag credit program does for ag credit, our Ag Link program, and I just gave you a ton of credit there, and our Ag Link program does for lenders like Ag Credit is it allows us to use our balance sheet on your behalf and really on the behalf of the farmers of the state of Ohio. So I got to tell you, Libby, I'm a challenge farm guy. I really am. I'm kind of more of a city slicker and it's tough for me to understand exactly what the farmers are going through, but we're good listeners and so we've changed some of our programs. I'm sure we'll get into that when we listen to our farmers because they're the expert and we've created some programs that are very good and really meet their needs and I'm excited to talk to you about it today.
Libby Wixtead (03:11):Well, I will tell you there will not be any agricultural tests today, so you'll be safe on that.
Robert Sprague (03:16):Good. I'm good with debits and credits. It's when I get into soil types and things like that and tiling and all those kinds of things that I start to lose it.
Libby Wixtead (03:26):Hey, you're already starting in on the lingo. That's great. So you have talked about the AG Link program as one of your many programs at your office administers. Can you share with our listeners what its purpose has been and how long you guys have had the AG Link program out there?
Robert Sprague (03:42):It's been open a long time, Libby, we've had it about 30 years in the treasurer's office, but you remember right around covid when the price of everything started to skyrocket, we began to have round tables because frankly I had a conversation with the Missouri treasurer and his balances for his version of the agne program were a lot higher. And so I sat down with my team and I said, Hey, listen, Scott's doing a great job down there. What could we do to make our program more relevant? And so we had some round tables, some of the farmers up in our neck of the woods, they told me that they used to spend 30,000 a year on diesel fuel. Now they're spending 60,000. This is when the fuel prices were really high. And then you remember what happened with the natural gas prices, they exploded. And so the anhydrous ammonia, the fertilizer went through the roof and then we had trouble getting Roundup and you couldn't even find Roundup. And the price had gone from $11 a gallon to some farmer told me it was $84 a gallon table. And so this sort of stuff, again, I'm not a farmer, but I'm a finance guy, I understand numbers,
(04:55):I'm just thinking I don't see how you make a profit. So I went back to our team and the treasurer's office said we have to do something about this.
(05:03):Our great team sat down and really sharpened their pencils and they said, alright, we can make the following modification. So the first thing we did was we had some farmers that came to us and said, look, your program is great, but nobody's planting anything in the state of Ohio for $150,000 this year. So you really need to raise the caps if you want to make this thing relevant. We said, okay, alright, great. And then the second thing was instead of getting access to capital only in January and February, which is traditional for our grain farmers in the state of Ohio, a lot of the livestock farmers said, we'd like to use the program too, but we need access to capital year round whenever. See, I'm going to mess this up whenever the animals finish or whenever the hogs finish or whatnot, we're getting ready for the next group. We need access to working capital. Then we said, okay, and then the final thing they said was nobody buys anything necessarily directly anymore. It's all bought through co-ops. We're using share purchasing power because we're really smart in the way we buy things. So we went back to the drawing table and we introduced something to the Ohio General Assembly, which by the way was supported by your representatives up there.
(06:18):I mean almost unanimously, I think maybe unanimously. And we presented something at the general assembly called the Ohio Gains Initiative and we said, let us change the program. So we added cooperatives, we increased the limit up to half a million dollars, $500,000, which is substantial, and we increase the interest rate reduction to up to 3% on any loan that qualifies for the program. And we made it applicable so that you can access the capital year round. So we have four different windows around the year that you can access the program. And for your listeners standpoint, I know you're going to ask me anyway, but for your listeners who are listening today or watching, they simply go into their local lender like Ag Credit and they apply for the program through Ag Credit. And you, by the way, I got to tell you ag credit, one of my favorites around the state. Okay. Because you do such a great job, I think you may do just as many of these loans as anyone else in the state, if not more. You've been great on the Ag Link program. We really appreciate that. So you just go into your local lender, they apply through all the kind of back office plumbing. The farmer doesn't have to do it, and it kind of takes care of itself, goes through an application process, we get it approved and we get all the deposits made and everything taken care of. So
Libby Wixtead (07:44):Yeah, thank you for that compliment. We really appreciate that we have welcomed all of those changes. I know I was really excited when you had some of your staff going around to some of the agricultural meetings and trying to get our input on what we thought the changes would look like and how that would impact our farmers. And I remember talking about the amount and I said, one 50 is just not enough anymore. And when you guys came out for that
Robert Sprague (08:12):Half, that was you, Libby, you're responsible for the whole thing. I love it. Yeah, right.
Libby Wixtead (08:19):When you guys came out with a half million, I think I was jumping up and down because that just had helped our farmers so much. And I will tell you, especially last year, this year, that interest rate savings for them has been incredible. And I mean, that is the first question. If we have anybody coming in for operating loans, it's like, I am going to be able to get a link for this, right? And we're just like, yes, because it is that impactful. So we really appreciate and welcome those changes that you guys have made and doing your research on how impactful that is to each of the farmers, whether it's grain, livestock, and having that access to it year round. So thank you very much.
Robert Sprague (08:58):Absolutely. And Libby, I just want to say you're so right in the current interest rate environment, this is meaningful. It's not only meaningful, it's almost necessary. And particularly with the crop prices Now, I was just with a farmer down to Arlington last week, and again, I'm farming challenged a little bit, so I'm going to get the prices wrong, but I know they need a higher price for soybeans even almost to make or break even The corn prices are not great. They're going to plant a lot of corn in the United States this year. It's going to be a bumper crop that has potential push the corn prices down. So look, I think our farmers need every advantage they can gain right now. Absolutely 3% interest rate reduction is huge. And I'll just throw in there. I mean, but all your farmers that are listening to this already know this, but they're carrying their grain for longer,
Robert Sprague (09:51):So they're using that working capital for longer. So that interest rate reduction is even more valuable holding onto that money for longer. So it's a good thing what we're trying to do here.
Libby Wixtead (10:01):Yes, absolutely. Can you talk a little bit more of, with the recent changes that you guys have made with the drought relief and the avian flu, how has it been more flexible to adjust to agricultural needs? Can you tell me how or why this happened?
Robert Sprague (10:22):Sure. So lemme tell you first of all the problem. So I just got done with my 16-year-old. He was writing an essay. I was like, Tate, man, you can't tell people the solution until you tell them the situation and the problem. So just for everybody that doesn't know, you may be a grain farmer up in northwest Ohio, like from Arlington, and you may not know that the farmers in dark and Mercer are dealing with this horrible, potent, avian fluid that's killing entire flocks. And it's a huge, huge problem. So we've opened up a new window specifically for the four counties where a lot of this avian flu is just decimating the flocks and it's over in that area. Highly contagious stuff, really bad stuff. And we wanted to try to help them out. And so what we did is we opened up an eight week window and they qualify for an even bigger loan. So the cap for this window is $750,000.
Libby Wixtead (11:22):Oh wow.
Robert Sprague (11:23):The interest rate reduction is actually a little bit over 3% right now. So it's an enhanced interest rate reduction as well to try to help those farmers. And normally you can only get the ag link for one year. We've extended it to two years. We want to make sure that everybody's able to get back on their feet
Libby Wixtead (11:39):If
Robert Sprague (11:39):They need that kind of assistance. So that window is open right now for those counties that are affected by the avian flu. And the reason that it came about was because we called a couple of the county commissioners, we talked to a couple of the farmers over in the area that have been affected by the avian flu. And we thought, holy cow, this is terrible. And I mean, look, as a consumer, you see the price of eggs. And as a finance guy, I know Libby, that it's not just inflation because then the price of everything would be going up. But I look at the price of gasoline that's going down, so it's not more money chasing fewer goods. It clearly is a change in the supply of eggs. So if you want to look at it, just look at the supply of eggs and you look how much under stress the farmers are. So we're doing everything we can to help 'em. And again, it was a listening tour and we listened to people like you, Libby, and farmers and agricultural experts, and they said, we need to do something. And so that's why we opened up the window.
Libby Wixtead (12:44):Yeah, that is so gracious of you guys to do that and to listen, that impact on those poultry farmers and the people that have suffered from that drought relief, I mean that is very impactful to them and could take them out of their operation. So this is awesome that you guys are doing this. So now can, is the application process the same as it is for the traditional operating ag link operating for this poultry and the avian flu people and the drought?
Robert Sprague (13:18):It's exactly the same. It's the same process. It's just an enhanced, enhanced window, and it's only open for a limited amount of time. And I want to talk just very briefly also about the drought, right? Because up in northwest Ohio, we had decent rain last year,
Speaker 4 (13:35):But
Robert Sprague (13:35):Down in southeastern Ohio, if you're talking about places like Noble County or Jefferson County or Harrison County, they did not get the water that we did in northwest Ohio and they were devastated. I was talking with farmers down there. I mean, they're hauling an unbelievable amount of water, literally six hours a day, they will have a huge bladder in the back of their pickup truck where they're trying to haul water for their herd. And you're talking about cattle, I think I'm getting a terminology right. You're talking about cattle, you're talking about lambs blocks of, we talked to one farmer down there where one of the lambs was purchased by his great-great grandfather from James Madison. I mean,
(14:25):You're talking about hers that have been in existence for a long period of time, and they're under terrific stress because they would just let them graze into the next field. They close off the current field. See, again, I'm not the farmer, right? I don't understand all the technicalities, but I know that when you don't have grass, the lambs can't eat. And that's not good. And so now they're having to import the hay and get some of the more expensive and higher protein stuff, and that just costs a huge amount of money. So they're having to add a lot to their working capital. And the last thing they want to do is have to take members of their herd out and or lose them. So it's a huge deal. And so we opened up also that drought window for those counties that are affected by the drought. We did have some in northwest Ohio, but mostly it's in southeastern Ohio. And again, the parameters of the program are the same as for the poultry program. It's $750,000 cap, a little bit more than a 3% interest rate reduction right now in three year period.
Libby Wixtead (15:37):Well, we really appreciate your commitment to agriculture. I know that agriculture is our number one industry in the state and in most of our counties. And so your guys' commitment to helping our farm operations continue on is just very welcomed and very, very appreciated. And this time with the interest rates as Ag credit, like you said, we were jumping right on that because we care about our customers and we, of course, we want them to borrow money, but we don't want them to be overextended and have that interest cost just sky rike on them, especially when they're holding those balances out on their operating loan, like you said. So we really appreciate your time today, and we are, again, so thankful for the Ag Link program and the changes that you made, and we hope to continue that conversation and you guys listening to us and reaching out. And I think for any farmers that are listening, treasure Sprague wants to hear how you're being impacted. And like you said, they are listening and they want to have those conversations so they can make their programs better for you guys. So thank you so much, treasure Sprague, we really appreciate your time.
Robert Sprague (16:48):Absolutely. Libby, I got to tell you, we appreciate you and the way that you use our program in your business each and every day and the way that you're helping farmers. I have to mention in closing that today is National Poultry Day. So I don't know it's Merry Christmas or Happy Hanukkah. I dunno if you say Happy Poultry Day. Merry Poultry Day. But it's a good day and I just hope that you didn't feel like I was winging it too much on the interview. I hope I didn't lay an egg or anything, but we're very grateful for all of our farmers around the state, and you're right, agriculture is Ohio's number one industry, but only when we all work together and pull on the ORs together, are we able to make it be successful. And that's our commitment in the Treasurer's office.
Libby Wixtead (17:38):That's awesome. Thank you so much.
Robert Sprague (17:40):Thanks, Libby.
Libby Wixtead (17:41):Yep. If you're interested in learning more about the Ag Link loans and how they could help your operation, contact your Ag credit account officer or visit AgCredit.net to find an AgCredit office near you. We'll talk to you next time.
Speaker 1 (18:03):Thank you for listening to AgCredit Said It. Be sure to subscribe in your favorite podcast app or join us through our website at AgCredit.net so you never miss an episode.