2008 Annual report for Arkansas Farm Bureau

2008 a n n u a l r e p o r t ark ansas farm bureau federation

‘Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.’ — c. william pollard

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president’s report executive vice president’s report new days, new ways babe dabbs: ‘old dog, new trick’ jeremy allen: ‘one man’s junk’ pat schaefers: ‘if you build it, they will come’ andrew sharpley: ‘the science of stewardship’ terris & kim matthews: ‘how sweet it is!’ board of directors

e x e c u t i v e v i c e p r e s i d e n t ’s r e p o r t

p r e s i d e n t ’s r e p o r t

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lawmakers and federal officials for an interactive discussion about the details of this federal legislation.

Sen. Blanche Lincoln was awarded the Golden Plow Award by the American Farm Bureau, in recognition of her tireless work in support of the Farm Bill, and the commitment she has shown to the men and women of American agriculture.

We led fact-finding missions to Wisconsin to view that state’s Discovery Farms project. We also were able to tour Monsanto’s laboratories and headquarters, where our board met with the company’s senior management to discuss biotechnology issues and help Monsanto understand the impact its products have on the farming community.

As always, we looked for ways to reach out to those outside of agriculture, redesigning the educational material that we make available through our Ag in the Classroom program. We also created a new Public Service Announcement program, providing radio stations across the state with non-commercial radio spots that highlight the impact Arkansas agriculture has on our state’s economy. We also have begun placing Farm Bureau Update on the iTunes store, making these video stories available for free download.

We, of course, were actively engaged with our congressional delegation, leading a county presidents’ tour to Washington, D.C. Also, for the first time, our Young Farmer & Rancher Committee traveled to D.C. as well, providing educational and leadership training for those who will lead our organization in the future.

Understanding that foreign trade is the long-term key to continued growth in American agriculture, we hosted the Arkansas-Africa trade conference, bringing in foreign ministers from nine African nations to discuss ways in which we might create new trading opportunities between Arkansas agriculture and those countries. I also was involved in trade missions to Peru, Brazil and Russia.

Though I no longer plan to hold office, I plan to be involved with Farm Bureau, and I know Farm Bureau will always be with me as we all look forward to New Days and New Ways.

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rkansas Farm Bureau completed another successful year on behalf of its members, implementing and enhancing programs and services that benefit the Arkansas families that make up our membership.

Despite a challenging economic environment, we were able to increase our membership to 227,759 Arkansas families and had 93.7 percent of our existing members renew their Farm Bureau relationship, the highest renewal percentage our organization has seen since 1974. Seventythree of the county Farm Bureaus met their membership objective for the year, a clear indication that street-level activity was an integral part of reaching this goal.

This is the first time in four years that we have been able to reach our annual membership objective. I thank the many state and county leaders who worked so hard to ensure that Farm Bureau enjoys a positive position in communities across the state. Renewal percentage is one way in which we measure the perception our members have toward our organization.

The role of Arkansas Farm Bureau is to enhance the lives of our members, and I take pride in the fact that our staff works diligently to deliver that promise to our members. There is something wholly and uniquely fulfilling about working on behalf of Farm Bureau members, and hopefully that has been on exhibit during the past year.

On the financial front, as you well know, the financial markets have not been kind this past year. Our investment portfolio is no exception. Accounting standards require us to present our investments at market value, resulting in an unrealized loss on our investment portfolio of $1.477 million.

Our investment portfolio is structured mainly with fixed income securities and certificates of deposits that will be

worth their par value at maturity. Our current strategy is to hold these items to maturity and to recoup the unrealized loss. We did endure a realized loss of approximately $32,000 on our Lehman Brothers holding which we liquidated before its bankruptcy filing Sept. 15. This loss is substantially less than it would have been had we been holding the investments when Lehman Brothers filed for bankruptcy. As of our Oct. 31 year-end, all fixed income securities held an investment grade rating from Standard and Poor’s and Moody’s rating services.

Total income for the year, including the previously mentioned adjustment of investments, was $8.4 million. Operating expenses totaled just under $9 million and income tax expenses were $80,000, resulting in a net loss for the year of $700,000. If not for the required market value adjustment, net income would have been in the $800,000 range.

As with last year, we have a required Financial Accounting Standards Board adjustment relating to pension and post-retirement benefits. This year that amount was a benefit of $283,000. This adjustment, with a net loss from operations, results in a total decrease in unrestricted net assets of under $400,000.

Your contributions to the Voluntary Issues Fund were $42,000. This results in a decrease of total net assets of $340,000 for the year.

Arkansas Farm Bureau Federation remains a strong organization financially, approaching $19.5 million in assets, in spite of the required accounting adjustments.

Throughout this annual report, you can read about how Farm Bureau members are adjusting to “New Days, New Ways.” The staff of Arkansas Farm Bureau will continue to support those efforts that keep agriculture a vibrant, active part of our state’s economy, culture and identity.

I look forward to continued success in 2009 on behalf of the members of Arkansas Farm Bureau.

‘Seventy-three of the county Farm Bureaus met their membership objective for the year. ... This is the first time in four years that we have been able to reach our annual membership objective.’

ewell welch

stanley reed

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he theme of this annual report, New Days, New Ways, is particularly meaningful to Arkansas Farm Bureau as we move beyond 2008 and into the coming year.

As you are likely aware, I have chosen not to seek reelection, ending a five-year tenure as president and 21 years on the board of directors of an organization whose noble cause is to serve the needs of farmers, ranchers and rural communities across this great state.

Serving as your president has been one of my life’s most rewarding experiences. However, now is the time for other leaders in your organization to have the same privilege of service I have enjoyed.

Arkansas Farm Bureau is a strong, viable, grassroots organization, affecting every Arkansan, many in ways they do not even realize. This organization represents the values of integrity, hard work, community involvement, family and is the voice of reason and common sense in public dialogue.

The true power in Farm Bureau, however, does not reside in its state officers or staff, but in you, the membership.

Your organization enjoyed another successful year, in my view. We implemented, for the first time in our history, a Voluntary Issues Fund, allowing members the opportunity to contribute to a perpetual fund that will be used to support and defend Farm Bureau positions in ballot and judicial matters.

We also rolled out a new member benefit involving a private offer with General Motors, where our members can save $500 on a number of different vehicles in the broad array of brands available through GM. Since implementation, Arkansas Farm Bureau members have saved more than $1 million because of this arrangement, especially meaningful in tight economic times.

We also utilized new technology to host an interactive video conference discussion on the Farm Bill. Accessing an advanced network that the University of Arkansas for Medical Sciences has in place to communicate with local hospitals, we connected farmers, agribusiness leaders, state

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‘Innovation distinguishes between a leader and a follower.’ — steve jobs

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s agriculture heads toward new days, those involved day to day in feeding, clothing and fueling the world have found new ways to remain relevant, competitive and, most importantly, in business.

New days, new ways is the theme of this year’s annual report, designed to highlight some of the creative ideas being put into action across the landscape of Arkansas.

The tightening national and worldwide economy is felt as acutely in agriculture as any other industry sector.

This pinch, though, has brought out new ways of doing business for many Arkansans.

Across the landscape of Arkansas agriculture, innovation is being implemented alongside agricultural practices that have been in place for generations, a mixture of tried-and-true and innovative spark, resulting in example after example of “new ways” thinking.

We’ve profiled five examples of Arkansans who are employing creativity and ingenuity during this time of new beginnings and needed adjustment.

• Consider 79-year-old E. R. (Babe) Dabbs of Humphrey (Arkansas County), who has cut down on water usage and pumping costs by planting some of his rice crop in rows, a practice normally reserved for soybeans, cotton or corn. But rice? This old dog has learned some new tricks.

• Try to catch up with 28-year-old Jeremy Allen of Bismarck (Hot Spring County), who is buying bulk com-

modity by-products wherever he can find them, custom mixing those for cost-effective feedstuffs for his own cattle. Furthermore, he’s building a successful feed business by connecting directly with others also looking for more efficient ways of feeding livestock.

• Pat Schaefers of Mayflower (Faulkner County) was convinced her family needed to diversify its farm holdings and launched a successful agri-tourism business that is educating others about the role agriculture plays in her community and our state.

• Dr. Andrew Sharpley, professor of crop, soil and environmental sciences at the University of Arkansas, is defining new ways for Arkansas farmers to be good stewards of the land. Under increasing pressures to manage nutrients in an environmentally sustainable manner, agriculture is relying on Sharpley’s research team to define best management practices that will ensure its continued place in our state.

• And, Terris and Kim Matthews of Wynne (Cross County) have engaged in a voluntary certification process through GLOBALGAP, enabling them to sell their sweet potatoes around the world, the only sweet potato farm in Arkansas to have this certification.

Each of the subjects profiled in this 2008 annual report have pursued a new way of keeping agriculture alive during challenging times. Such ingenuity and action is a necessity in this New Days, New Ways world.

Welcome the new days. Embrace the new ways.

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babe dabbs

old dog, new trick

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ld dogs can learn new tricks. Seventy-nineyear-old Babe Dabbs knows that for a fact. A lifetime coon dog trainer and Arkansas County farmer, Dabbs learned a new trick when he began planting “row rice” three years ago.

“My nephew, Terry, was doing it, so I told him I’d try it if he could get me some seed,” Dabbs says.

Dabbs wasn’t convinced it would work. He’d heard someone had tried it some 30 years ago with little success, so he wasn’t real optimistic when Terry suggested he try it.

Row rice goes against the standard system of levees and flooded fields that most Arkansas rice farmers use.

The rice is drill-seeded on dry ground, much like any other row crop.

Dabbs says a sandy soil that drains easily works best.

The crop is only irrigated when necessary. This eliminates maintaining a levee system and costly pumping to keep fields flooded.

The result, Dabbs says, is a 25 percent overall cost savings. Those savings come in less fuel and water needed to grow the crop, and less labor because there are no levees to build and maintain.

“I like not having to worry about floods knocking out my levees in the middle of the night,” he says.

Row rice requires a hybrid seed that is more expensive than regular rice seed. However, it only takes 28-30 pounds of seed per acre to plant it instead of the 90-100 pounds per acre to seed conventional rice.

Dabbs says a conventional rice yield is somewhere between 170-190 bushels/acre. During his three years trying row rice, Dabbs’ yields were 194 bushels (dry), 196 bushels (green) and 165 bushels when grown behind wheat.

He fertilizes with chicken litter.

He chuckles when he recalls rice yields of 65-70 bushels per acre when he began farming the same ground in 1947.

“We thought we were doing pretty good back then,” he says. “We didn’t know any better.”

Overall, his farming operation is split 50-50 between rice and soybeans. Row rice isn’t feasible for all soil types.

Dabbs has the necessary sandy base soil that drains easily to grow 47 acres in row rice.

Dabbs has just about seen it all in 61 years of farming.

Yet as he stands waist-deep in a field of row rice, the plant heads bending under the weight of a bumper crop, he smiles.

“It’s never too late for an old dog to learn new tricks,” he says. “Even an old dog like me.”

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jeremy allen

one man’s junk

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hrough the centuries, major technological advances have helped make farming more productive.

The hoe.

Livestock-drawn plows and wagons.

The tractor.

Pesticides and herbicides.

For 28-year-old Jeremy Allen, it’s his cell phone. Allen can’t do without it. It’s the engine that drives his entire farming operation.

The phone rings. Allen answers.

“This is Jeremy.

“Yes, sir.

“Yes, sir.

“I have a truck that will be out that way next week. I can pick it up then. Will that work for you?

“Yes, sir.

“Thank you, sir.”

It’s an example of a conversation Allen has some 1,500 times a month. His cell phone is always within arm’s reach. He says the calls start daily at 6:00 a.m. and often go until 10 at night.

For Jeremy Allen, one man’s junk is his treasure.

The Hot Spring County farmer found a way to take what other people don’t want and make it into something useful.

Corn gluten from Illinois.

Gin trash.

Rice and soybean hulls.

Twenty tons of rejected boxes of cereal; a toy included in each package.

“I paid some high school kids to tear open every box and separate the toys and packaging from the cereal,” he says. “That was some job.”

Like some modern-day agricultural alchemist, Allen then mixes these byproducts into feedstock gold. He keeps three trucks on the road regularly and contracts to haul whatever byproducts are out there that no one else wants.

He mixes the different items in a mixer wagon mounted on an old cement truck. He buys a small percentage of whole grains for his feed and grinds them with a grinder mixer he bought used from another farmer. It’s powered by a 1974 Allis-Chalmers tractor with a busted clutch.

Like many young farmers, he can’t buy new, so Allen makes do with what he can get his hands on and fix.

His mixes provide the necessary protein to feed livestock, and his prices are affordable to smaller operators who can’t buy enough commercial feed in bulk to get a discount.

A farmer arrives and gets 1,500 pounds of feed augered into a giant feed sack in the back of his pickup. He says the price is right for the small cow-calf operation he runs.

Whether on the phone or in person, Allen’s demeanor is always polite and respectful. He says he calls people every day, whether he needs something or not, just to see how they are doing.

“They remember me when they have something or hear of something that someone else wants to get rid of,” he says.

His feed and trucking operations are just one part of his farm. He also has three breeder hen houses, runs cattle and grows hay.

The phone rings again.

“Excuse me,” he says. “I’ve got to get this.”

For Jeremy Allen, the sound of his cell phone ringing means there’s money to be made.

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pat schaefers

if you build it, they will come

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egotiating farming’s many variables is like trying to make your way through a maze.

Weather. Commodity prices. Land. Bank loans. Debt. Personal health.

Add to that all of the other day-to-day things life throws at you. Start down one promising path only to find out it’s a dead end and you have to retrace your steps and choose a new way to go. You keep trying and working harder, but you never know if you’re going to make it out of the maze. Yet, for one Faulkner County farm family, it’s a maze of a different kind that led them down a profitable path.

For about 10 years, Pat Schaefers had an idea she wanted to try. But like so many good ideas, life’s immediate needs shoved hers aside as she and husband, Bob, and their two sons struggled to make their farm in the Lollie Bottoms along the Arkansas River work.

Soybeans, wheat, hay, corn, and beef cattle kept them all busy. But Pat never gave up on her idea – a corn maze.

Instead of plowing all of the corn under and building a baseball field, a la the movie Field of Dreams, she wanted to cut paths through the corn and charge people money to try and find their way out; almost as wild an idea. Regardless, the same premise of faith was at play.

“If you build it, they will come.”

“The economy was so bad back then — it still is — and we had two sons farming with us. It’s tough to keep three families farming fulltime on a thousand acres,” Pat says.

“I finally convinced them to do this.”

She’d seen pictures and read articles about mazes in farming magazines and thought it might work in a place close to population centers like Conway and Little Rock.

“We started off in 2005 not knowing what we were doing, and just learned as we went,” Pat says.

She scoured Web sites and read as much as she could about the families around the country who were successfully running corn mazes. The maze is in its fourth year, and the ground it’s on is a money maker. Everyone in the family helps. Grandchildren, nephews, nieces and in-laws.

Each year, the Schaefers improve the maze area with new activities for visitors; a playground, tractor-pulled cart, hay rides and concessions. Their oldest son and daughter-inlaw run a you-pick pumpkin patch business next door.

Now, Pat is a leader in the field and is working with an agri-tourism committee funded by a Rockefeller Institute grant looking to create more agri-tourism opportunities in Arkansas.

Pat Schaefers believed in her idea. She built it and they came. And she’s working hard to make sure they keep coming for years to come.

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andrew sharpley

the science of stewardship

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ood science is critical to making defensible agricultural management and policy decisions that protect the farming community and the environment. Without science, we are blind, naive and sometimes a liability to unintended consequences of our decisions.

Dr. Andrew Sharpley is a professor of soil and environmental sciences at the University of Arkansas. He is developing research and demonstration programs that will help farmers operate in a cost effective and environmentally sound manner.

Sharpley is presently developing the Discovery Farm Program in Arkansas. A Discovery Farm is an actual working farm. Researchers and the Extension Service partner with farmers and landowners to determine the effectiveness of conservation practices designed to reduce nutrient and sediment runoff on the farms.

Initially, four Discovery Farms are planned for Arkansas. The goal is to expand to 10–12. The farms will be located throughout the state to address production, water quality, water conservation, and economic issues that are part of Arkansas’ diverse agriculture systems.

“The idea is to see which on-farm conservation practices are most effective,” Sharpley says. “Right now, farms in nutrient surplus areas are required to have nutrient

management plans, but farmers need more information on how effective these conservation practices are in the real world.”

Sharpley says the Discovery Farms will help answer these questions in a scientifically defensible way.

“Armed with this information and knowing where and which conservation practices decrease nutrient and sediment runoff, farmers will be able to document their role in protecting the environment,” Sharpley explains.

Sharpley is also involved with another new program. It is the development of the Watershed Research and Education Center. The fledgling Center is part of the University of Arkansas’ Division of Agriculture in Fayetteville.

Water quality monitoring on the site is already underway. Stream corridor restoration is also underway to show what different types of riparian buffers are effective. Plans also call for an education building as part of the 250-acre site.

Sharpley says the research will allow farmers to take advantage of the lessons learned at the Center, as well as the Discovery Farms. This will help them document the benefits of their conservation practices on water quality and showcase and promote their environmental stewardship to the non-farming community.

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terris & kim matthews

how sweet it is!

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oneymooners” TV show comedian and Hollywood star Jackie Gleason’s signature line was “How sweet it is.” In the youth slang of today, if something is really good, kids say it’s “sweet.” No matter what generation you’re from, “sweet” is the key word to describe Matthews Ridgeview Farms in Wynne.

Terris and Kim Matthews are living the sweet life farming 800 acres of sweet potatoes in Cross County. The 2008 Cross County Farm Family of the Year, their operation is the largest sweet potato farm in the state. The effort is all about good ol’ American hard work and the couple’s savvy approach to marketing.

Before the couple met, Kim worked for Wal-Mart. Her work involved buying products for several of the retail giant’s stores in Tennessee. (That’s how she met Terris.)

The experience gave her great insight on how big companies choose products and the producers they buy from.

That knowledge led to the Matthews’ deciding to get the sweet potato side of their farming operation GLOBALGAP certified. (GAP stands for Good Agricultural Practices.) The food safety effort took about a year and a $100,000 investment to ensure good agricultural and safe handling practices on the farm and its 150,000-squarefoot headquarters and processing plant in Wynne.

The certification allows Matthews Ridgeview Farms to sell its sweet potatoes internationally.

“It’s opened up a whole new group of customers for us,” Kim says. “They never would have considered us without this certification.”

GLOBALGAP is a third-party private body that sets voluntary standards for the certification of agricultural products worldwide. It covers everything from seed to finished product and includes annual inspections once a farm’s product is certified. The standard reassures consumers about the food’s on-farm production concerning environmental impacts, reduced use of chemicals, animal welfare, and ensuring worker health and safety.

“This type of certification is essential when trying to attract major buyers. They won’t do business with you unless you have it.” Terris says. “It’s critical to expanding our market and the farm’s business.”

Terris, 39, is a fourth-generation farmer who struck out on his own from the family’s Matthews Brothers Farm in 2006. Like most successful farms today, diversification is critical to the farm’s success. The farm also grows wheat and soybeans. However, Kim took that diversification a little further when she opened Stones Custom Creations at the farm’s headquarters. The store features her custom jewelry and women’s accessories.

That’ll probably be a sweetheart deal for Terris and Kim’s daughters, Jaylie, 7, and Taycie, 5, when they reach dating age and need a few wardrobe accessories. Dad, Terris, though, isn’t commenting on it just yet.

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ark ansas farm bureau board of directors

editor

s te ve e d d i n g to n profiles by

gre g g p a t te r s o n profile photography by

j a m e s grove s scenic photography by

d av i d d o d s o n layout/design by

chris wilson

front row (from left) Joe Christian, Jonesboro; Susan Anglin, Bentonville; Ewell Welch, Executive Vice President, North Little Rock; Stanley Reed, President, Marianna; Randy Veach, Vice President, Manila; John Andrews, Secretary/ Treasurer, Walnut Ridge; Denelda Michaelis, Goodwin. middle row Troy Buck, Alpine; Leo Sutterfield, Mountain View; Tom Jones, Pottsville; Dennis Ritchie, Nashville; Todd Allen, West Memphis; Jeremy Allen, Bismarck; Bryan Swinney, Rison; Johnny Loftin, El Dorado.

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back row Richard Armstrong, Ozark; Rich Hillman, Carlisle; Terry Dabbs, Stuttgart; Rusty Smith, Des Arc; Allen Stewart, Mena; Billy Sharp, War Eagle.

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