Rabobank International, thwar-ted in its attempt to buy one of the nation's largest Farm Credit System lenders, is taking another tack to raise its profile with farmers.
The $500 billion-asset Dutch company, already an established lender to U.S. agribusinesses, recently launched its first advertising campaign aimed primarily at producers.
Two weeks ago it started putting ads in such magazines as Successful Farming, California Farmer, Delta Farm Press, and Western Farmer/Stockman. It has also placed 60-second radio spots on farm reports and in news programming on 20 stations in the Midwest and Pacific Northwest.
The ads and the radio spots will run through March, and Rabobank said it would spend about $500,000 on the initial effort.
It is also planning campaigns for the rest of 2005 and is expanding its marketing staff for them.
Among the new hires is Lynne Burns, who joined it Dec. 1 from the New York public relations firm Gavin Anderson & Co., where she was a Rabobank spokeswoman.
Ms. Burns, now the head of corporate communications for Rabobank International in the Americas, said one thing it learned in trying to buy the $7.6 billion-asset Farm Credit Services of America in Omaha was that "we aren't as well known as we want to be."
The message Rabobank wants to get across, she said, is that "we're not a bank that dabbles in agriculture - we're a bank that's wholly focused on it."
Until 2002 the company focused its U.S. lending primarily on large agribusinesses. The purchase in July of that year of Valley Independent Bank in El Centro, Calif., gave Rabobank its first retail operation in this country.
The next year it bought Lend-Lease Agribusiness in St. Louis; a real estate finance company that it renamed Rabobank Agrifinance; and Ag Services of America Inc., a feed and seed lender in Cedar Falls, Iowa. As a result, retail banking now accounts for nearly half of its U.S. assets.
Ms. Burns said the ad campaign is designed to build on those acquisitions. Rabobank is also hiring more sales staff; promoting new products, including an interest-only loan; and marketing its real estate lending services beyond the Midwest.
"We'd like to arrive at a point where we can provide producers with all of their financial services needs - one-stop shopping for the farmer," she said.
Rabobank had planned to become that one-stop shop more quickly with Farm Credit Services of America. But the deal, announced in July, caused an uproar in the Farm Credit System and among farmers and borrowers, and even led to a congressional hearing.
Concerns were raised over whether a foreign bank would have the same commitment to U.S. producers as a government-sponsored institution and whether stockholders were getting a fair price. (Rabobank had agreed to pay $600 million when the deal was announced and later raised its offer to $750 million. The deal also called for Farm Services of America to pay an $800 million exit fee to the Farm Credit System).
Under pressure from stockholders and lawmakers, Farm Credit Services' board called off the transaction in October.
In addition to the ad campaign, Rabobank officials plan to meet with farm trade groups to find ways to sponsor meetings and get its agricultural research into the hands of farm customers to raise its profile and demonstrate commitment, Ms. Burns said.
Bert Ely, a consultant in Alexandria, Va., said that Rabobank came across as "kind of out of touch" during its courtship of Farm Credit Services of America, and that the marketing push is probably designed to help remedy that impression.
It makes perfect sense for Rabobank to try to become better known to farmers, who are generally more concerned with rates and terms than whether a loan is originated by a Farm Credit lender, a local community bank, or a Dutch behemoth, Mr. Ely said.
The marking campaign is "a way to build awareness so that when their people go knocking on doors, farmers know who they are," he said.
