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An Old Lender for Young Borrowers

When a young Texas farmer needed financing for his new farm, his best option was a seasoned lender.

Landscapes Summer 2016
Heather and Greg Hengst with son, Kolman

Heather and Greg Hengst with son, Kolman, pictured in 2014

Photos by Jim Lincoln

Like any proud father, Texas farmer Greg Hengst gets a certain twinkle in his eye when he talks about his son, Kolman.

From the way he describes the 4-year-old playing farmer to chuckles about his son's burgeoning farm cap collection, Hengst's stories are laced with humor and pride.

"I tell Kolman that he's the most successful farmer ever because he plants and harvests his crops on the same day," he says with a grin.

However, it doesn't take much visiting with Hengst to imagine that he was much the same way himself as a boy.

"I've always had a love of farming, especially row cropping," says Hengst, who today farms 1,600 acres of corn, milo and wheat. "It's not just a profession, it's part of who I am."

But getting started took determination, the support of family and a good lender. Intent on farming after graduation, Hengst earned an agronomy degree from Texas A&M University. He then worked a few years for the Texas Boll Weevil Eradication Foundation before coming home to Thorndale, in Central Texas, to farm on leased property in 2005.

A love of farming runs in his family — his grandfather and several uncles farmed well into their eighties — but his own father, Dennis, raised cattle and worked in real estate, leaving a young Hengst with very little equipment to begin his operation.

Knowing that his son would need a good lender, Hengst's father introduced him to a trusted business contact — Tim Knesek, senior vice president in Capital Farm Credit's La Grange office. Because of his age and the fact that he hadn't been in business long, Hengst easily fell into Farm Credit's Young, Beginning and Small (YBS) farmer demographic, a category of producers that the lending cooperative strives to help break into the industry. He obtained his first operating loan with Capital Farm Credit in 2005.

Extra Help for Young Producers

Farm Credit has financed YBS customers since 1916, but in recent years, Farm Credit associations across the country have made an extra effort to extend help to these YBS producers, understanding they need more help today getting their operations started. Hengst, who in 2008 was able to add acreage by farming on his grandfather's land, was no different.

"Equipment was the biggest barrier I had to starting," he says. "My grandparents didn't farm a lot and they had smaller equipment. So to farm what I had, I had to purchase more equipment than most might."

In 2010, Hengst and his wife, Heather, found a house, grain bins, a barn and a shed on 5 acres just outside Thorndale.

At the encouragement of Knesek, the couple applied for a loan with Capital Farm Credit, with supplemental financing from the Farm Service Agency (FSA).

FSA targets many of their programs toward young, beginning and small farmers and ranchers. They provide both direct funds and loan guarantees allowing traditional lenders, such as Capital Farm Credit, with opportunities to create loan structures to better serve agriculture.

Greg Hengst with son, Kolman

Kolman "inspects" a tractor under his father's careful watch.

Handling Good Years and the Not-so-Good

"Greg is knowledgeable but he's very open to new ideas, even when we talk about finances," says Knesek. "He started farming at a time when profit margins were thin so he had to be a good budgeter. He started out experiencing some good, but also a lot of hardships, learning what to do and what not to do. When those good years came, he knew how to handle them and to realize that things aren't always going to be like this and to plan accordingly."

Planning has allowed Hengst to benefit from technological advances to make his operation more efficient. From updated equipment to GPS technology, he says that he is still in awe of how much technology has changed in just the 12 years that he has been farming.

Hengst adds that he knows there are going to be hard times, but the good times make it well worth it, as it's been a rewarding way of life for both him and his family. If he has one piece of advice for young or beginning producers, it's to surround themselves with good people.

"We can't always have $6 or $7 [per bushel] corn, but we make it through and always have," Hengst says. "That's why it's important to have good organizations like Farm Credit to work with. Anyone wants to finance you when you're having a good year, but it's the ones that stand by you in your bad years that show their character. That's important for anyone, but it's especially important for a young farmer."


The Loyalty of a Lender

Greg Hengst is quick to acknowledge that his Farm Credit lender, Capital Farm Credit, has been supportive through good times and bad. Leading that support team is his loan officer, Tim Knesek.

In 2008, Knesek nominated Hengst and his wife, Heather, to participate in the Farm Credit Young Leadership Program, an annual event that takes young borrowers to New York City and Washington, D.C., to show them how Farm Credit is funded. The couple was selected to represent Capital Farm Credit, but Hengst wasn't sure the timing was right to leave the farm, which was in the midst of a downturn.

Knesek assured Hengst that financial matters could wait and encouraged the couple to take the trip. The Hengsts participated in the leadership program, becoming even stronger advocates for Farm Credit.

Hengst and Knesek shared this story in a Farm Credit First Person video, one of many produced in honor of the System's centennial celebration. View the Hengst's story.

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Farm Credit offers loans, leases and other financial services to those involved in agriculture and rural communities. Whether you're a farmer, rancher or rural business owner - we can help.

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