American AgCredit has entered into an agreement to purchase Farm Credit of New Mexico, the Sonoma County-based farm lender announced Thursday.
The deal is expected to close in July 2023 following regulatory and shareholder approvals. The acquisition will add more of toehold in the American Southwest for American Ag Credit, the fourth largest U.S. ag lending cooperative out of more than 65, which make up a network of borrower-owned lending institutions.
Assets of the company formed as American AgCredit in 2000 will rise by $2 billion to $19 billion. Across the nation, the business of lending to agricultural companies accounts for $200 billion in loans.
The planned merger with the Albuquerque-based organization appeals to the Sonoma County’s farm lending specialist’s plan to grow in the West.
“The culture and values of both associations align really well,” Hudnutt said.
From the North Bay’s Noble Vineyard Management to Wiens Wagyu in Kansas, American AgCredit serves more than 11,000 clients (also referred to as shareholders) in California, Colorado, Hawaii, Kansas, Nevada, Oklahoma and New Mexico. Farm Credit of New Mexico brings in another 1,000 customers to American AgCredit’s client base.
Hudnutt noted that challenges farmers face from perilous weather prompted by a changing climate and the pursuit of more innovation on the farm create an elevated need for agricultural clients to seize investment dollars. With electric tractors and robots to reduce emissions and water use, respectively, along with the escalating costs of most goods, farming has become “a very expensive endeavor,” he acknowledged.
“Farmers are extremely resilient. (Our services) allow (them) to weather the storm,” he said.
American AgCredit provides financial services such as mortgage financing, equipment leasing and crop insurance. It also secures interest-free loans for qualifying 4-H and Future Farmers of America Ag-Youth programs, among college scholarships to advance the industry of agriculture and offer more opportunities to budding young farm workers and entrepreneurs.
With 720 employees currently, American Ag Credit will add on another 130 positions as the result of the acquisition.
“The intent is for everybody to have a role, said Hudnutt, who came on board in October 2020 — two decades after the formation of American AgCredit. Before Hudnutt arrived, the cooperative had merged with the Hawaii Farm Credit in 2019 and the Farm Credit of Southwest Kansas two years prior.
This latest planned merger pledges to combine a blossoming “talent pool” with Farm Credit of New Mexico and American AgCredit’s “technology platform that’s cutting edge,” Farm Credit of New Mexico board Vice Chairman Tom Drake told the Business Journal.
“They’re growing and need people,” Drake said, adding the California organization’s mere size provides added established stability. “We’re excited about the big picture of this.”
Susan Wood covers law, cannabis, production, tech, energy, transportation, agriculture as well as banking and finance. For 27 years, Susan has worked for a variety of publications including the North County Times, Tahoe Daily Tribune and Lake Tahoe News. Reach her at 530-545-8662 or [email protected]
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