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FarmCreditEast.com
THE BIG PICTURE
ECONOMISTS’ PERSPECTIVES ON THE AG ECONOMY IN THE NORTHEAST AND BEYOND
INSIDE FALL 2018
2 | News & Views 3 | CEO Column
4 | Cover Story 11 | FarmStart
12 | Fruit of the Fungi 14 | Farm Bill Update
N EW &V IEW S S
FarmCreditEast.com
Farm Credit East’s Customer Assistance Program 2019 Director Elections and 2020 Nominating Committee Process As many of you know, we hold our director elections each spring, but what you might not realize is that this annual process actually starts each fall when our Customer Service Councils meet to identify and recommend potential director candidates to our Nominating Committee. As part of this process, Customer Service Councils also recommend the slate for the following year’s Nominating Committee (both members and alternates). Any borrower eligible to own voting stock is welcome to nominate themselves to be considered for a position on Farm Credit East’s Nominating Committee. If you or someone you know is interested in serving on the 2020 Nominating Committee, contact your Customer Service Council representative, your local branch manager or visit FarmCreditEast.com/Elections to learn more. Nominations must be received no later than December 31, 2018.
As a customer-owned cooperative, Farm Credit East is committed to providing the services and resources that our members need. That is why this past spring we began offering a customer assistance program at no cost to you. Farm Credit East customers, their families and their employees, may access the services of ESI Group by calling 800-252-4555 or visiting theEAP.com. This service, the same that is available to Farm Credit East employees, has a wide range of HR, legal, financial and personal wellness resources available. All you need to indicate to use this complimentary service is that you are a Farm Credit East customer. Learn more: FarmCreditEast.com/CAP
Careers with Impact If you’re looking for more than a job — s omething you can truly commit to, believe in and feel good about — F arm Credit East is the career choice for you. When you join Farm Credit East, you have the opportunity to provide impactful financial, business and risk management solutions to farmers, foresters, fishermen, agricultural business owners and rural property owners across the Northeast. Both full-time and internship opportunities are available. We’d love to get the conversation started. Learn more: FarmCreditEast.com/Careers
Farm Credit East’s Annual Photo Calendar Contest Congratulations to all of the talented photographers whose photos will fill the pages of Farm Credit East’s 2019 Agricultural Views calendar. And thank you to the more than 800 entries we received representing unique views of the Northeast’s diverse agricultural industries. For a copy of the 2019 Agricultural Views calendar, please contact your local branch office. And believe it or not, we’ve already begun collecting photos for our 2020 calendar! The deadline may be months away, but we encourage you to submit your photos as they’re captured – including those snowy winter scenes. We look forward to seeing your submissions!
FarmCreditEast.com/Calendar Deadline: July 31, 2019 2
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“
At Farm Credit East, our staff is equipped to work with customers to address both short and long-term needs.
”
CEO’s MESSAGE
THE LONG VIEW Bill Lipinski, CEO, Farm Credit East As I read this issue’s feature story
consultants can work with customers to
operate or capitalize the business, and is
interviewing four economists, I
help them assess their profitability and
part of the value proposition of being a
appreciated their perspective as they
improve it. We have a range of financial
cooperative member. A strong patronage
discussed the issues facing U.S. and
services that can help producers better
program is part of our commitment to
Northeast agriculture. Though they
understand their business, manage risk
staying financially strong and being a
opined on current issues like the ongoing
and stay in compliance.
trusted financial partner to Northeast
trade and tariff disputes and the current
Farm Credit East can also help
status of the farm bill, they also provided
producers tackle long-term priorities,
In this issue’s feature story, the
a longer term view on the impact of
whether it’s a loan to buy the farm or
economists’ views on the future of
extended trade disruptions and the
timber parcel next door, or assistance
Northeast agriculture are in line with
outlook for Northeast agriculture.
with a generational transfer plan. In
what I believe — that there is a bright
The demanding daily tasks of running
agriculture today and tomorrow.
today’s industry, stepping back to
future for Northeast agriculture,
a business can sometimes cause owners
evaluate the big picture of your operation
commercial fishing and forest products.
and managers to have a shorter term
and develop its long-term plan has never
Yes, there are challenges, but we have
focus. After all, in the short term, they
been more important.
the natural resources and infrastructure
may have to concentrate on planting or
That’s why at Farm Credit East we
required for long-term success, and our
harvesting crops, taking care of livestock,
seek to recruit and develop a talented
region’s innovative producers are well
or day-to-day employee management.
staff who understand producers’
positioned to meet the needs of a
businesses and can help them find the
diverse customer base in the Northeast
stress, the short-term challenge may be
financial solutions they need. It’s also
and beyond.
generating enough cash flow to make
why our board and management team are
ends meet at the end of each month. We
committed to maintaining a financially
to step back and take the long-term
know it’s easy to let the long-term view
strong cooperative. That strength allows
view. The economists’ comments
slip to the back burner when there are so
us to work with producers who are facing
remind us that the decisions that are
many immediate concerns to focus on.
financial challenges and gives us the
made today will impact what happens
capacity to assist members in growing
tomorrow. I hope that as the calendar
and evolving their businesses.
turns to 2019, we will keep in mind that
For those managers facing financial
But as producers navigate day-to-day challenges, it’s important to maintain
We don’t always have the luxury
there are great opportunities ahead of
a long-term perspective to keep their
Given our strong financial position,
businesses on track for the future. At
the Farm Credit East board approved a
us, and Farm Credit East looks forward
Farm Credit East, our staff is equipped
special, one-time patronage dividend of
to working with our members to take
to work with customers to address both
$15 million that was paid to stockholders
advantage of them.
short and long-term needs. In the short
in October. The board’s philosophy is
term, our loan officers and business
to return funds that are not needed to FALL 2018
3
THE BIG PICTURE ECONOMISTS’ PERSPECTIVES ON THE AG ECONOMY IN THE NORTHEAST AND BEYOND
There’s no question that there’s a lot going on in agriculture right now. Dairy prices have been low for a number of years. There is anxiety over changes from the North American Free Trade Agreement (NAFTA) to the U.S.-Mexico-Canada Agreement (USMCA) and how it will impact agriculture. There are growing concerns over whether a farm bill will be passed, and longstanding issues regarding the availability of agricultural labor. In many cases, the long-term impacts of how these various issues will affect agriculture are unknown. We know this can cause concern and uncertainty in the minds of many Northeast producers. Yet, there are some bright spots in agriculture — consumers have a growing interest in where their food comes from and purchasing local; per capita consumption of dairy products is increasing; and possible enhancements to farm bill programs. Let’s not forget the strategic and progressive producers we have here in the Northeast, who are creatively thinking through ways to overcome challenges and adapt their businesses to the changing marketplace. To get more insight into the current state of some of these issues, such as trade, labor and dairy markets, and their forecasted long-term impact, Chris Laughton, Farm Credit East Director of Knowledge Exchange, recently interviewed four leading economists to give both local and national perspectives. As it turns out, even though agriculture is facing some challenging times right now, they’re in agreement that the long-term outlook for Northeast agriculture is pretty bright. Read on to find out what they had to say.
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FINANCIAL PARTNER
C O V E R
S T O R Y
FALL 2018
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TRADE Trade issues are on everyone’s mind today. What are your thoughts on the current trade environment and how it’s affecting agriculture? JOHN NEWTON: It’s no secret that the current trade situation significantly affects agriculture. The administration recently responded with an announcement of three separate programs to try to offset the impact of the trade situation on farmers and
JENNY IFFT: A fair share of the specialty crops that we grow in New York are exported at the national level, by other states if not New York, so trade is definitely a concern. For example, not quite a third of U.S. fresh apples get exported. Mexico is a big customer. So there’s a lot of uncertainty with our specialty crops sector here in the Northeast.
DAIRY Dairy is facing some real challenges at the moment, what is
ranchers. Those three programs include (1) the market facilitation program, which delivers direct payments to growers; (2) foreign
your short-term and longer-term outlook for this industry?
market development funds; and (3) purchase of commodities for BEN: Dairy’s been in an extended period of difficult prices. A
distribution into food banks and other avenues. This is impacting a lot of Farm Bureau’s members — even those who have seen the
lot of what we’re dealing with comes down to a few factors: 1. High exports: We’re seeing high levels of exports, at least
prices for crops fall substantially before. It’s a very real issue. BEN LAINE: What we’re going through right now is challenging for agriculture. Trade affects everybody. If product
for now, which brings both the good and the bad that
comes with that. We’re much more susceptible to pricing
on the world markets than we would be otherwise. 2. Decline in fluid milk consumption: A decline in milk
starts backing up in the U.S., whatever the commodity, it’s going to affect markets whether the specific product was initially going
consumption has been going on for quite some time, yet
to the export market or not. So if you have dairy products piling
overall, per capita consumption of dairy in all products is
up in the U.S. that were supposed to go to the export market, that
going up. People are consuming more milk, they are just
starts weighing on prices. Everybody feels those impacts.
doing it in things like cheese or butter or ice cream or
yogurt. 3. Segmentation: We’re seeing a lot more segmentation from
NATE KAUFFMAN: Another piece that I don’t think is getting
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enough attention are the long-term implications. Everyone’s
the traditional plastic jug, staple milk into premium
concerned about what the environment is right now. But if this
products, and I think that’s being mirrored on the farm
environment were to play out over a long horizon, then asset
side. So we’re seeing segmentation into a group of much
markets like farmland values would presumably need to correct.
larger farms that are producing the vast majority of
If farmland markets begin to correct over the long term, that
commodity milk and then we’re seeing smaller producers
presents a significant additional stress for the sector.
focused on specialization. I think that segmentation is going
to continue to shift how the dairy industry operates.
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In the near term, we’re starting to find a little more balance
NATE: Producers need to think more about how to add
in supply and demand. We’re seeing prices climb a little. Nothing
value to their operations and to their products. Increasingly,
phenomenal, but we’re moving in a slightly positive direction
we are seeing limited profit opportunities for producers of bulk
in terms of milk price and I think that’s going to continue into
raw commodities. That goes beyond dairy and includes major
next year.
grains and other commodity products. There very well could be opportunities that exist in the processing/value-added space, but
JOHN: A few other things that I think are important for the industry to think about are:
I think there’s still a decent amount of transition that’s required in order to get there.
1. Farm Bill. There’s a lot of things that the farm bill
potentially has in it that may help the dairy industry. First,
the farm bill really improves the safety net for small to
mid-sized dairy operations. The MPP program is made much
more affordable and coverage is expanded. 2. Risk management. The Bipartisan Budget Act of 2018
removed the subsidy cap on livestock insurance products.
Most of the major field crops have been using crop
insurance as a risk management tool for decades, but
we haven’t seen that level of adoption in the livestock
space, especially not in dairy, partly because there was
a financial cap on the amount of premium subsidies that
were available. 3. Milk donation program. This is an issue that has impacted
the Northeast quite a bit. Because of the federal milk
processing order, there’s a financial incentive to dump
surplus milk instead of bottling and donating it. The farm
bill creates a milk donation program. For those who donate
milk, the Secretary of Agriculture will give them back a
credit to the pool. JENNY: Here in New York, while we have a lot of farms
under stress, we also have some farms that are very resilient. Here at Cornell, we calculated breakeven milk prices and it varies
FARM BILL While the farm bill’s two versions have significant differences on nutrition programs, the ag provisions seem more in alignment. What do you see impacting producers in the coming bill? JOHN: Many called the 2014 farm bill revolutionary in that it got rid of direct payment programs and introduced new safety net programs that required farmers to have more skin in the game, or need-based programs based on prices and/or revenue. Everyone knew this current farm bill would be more evolutionary. We weren’t going to have the opportunity to make substantial changes to the programs due to financial reasons. I don’t think there’s anything too revolutionary in this farm bill for production agriculture. In general, we’re just hoping that the farm bill gets done to provide certainty. NATE: In addition to that aspect of uncertainty, we’re getting to the point when lenders start thinking about the next loan renewal season. Lenders have already had a lot of difficult conversations with producers over the last few years and some of these producers’ working
greatly across all the farms we had data for. That’s the general environment we’re seeing.
FALL 2018
capital has gotten to a point where they can’t be pushed any
to get into more specialty fresh fruits and vegetables, but that can
further. Producers are restricted in finding ways to make it work
be more labor intensive, so it’s a tradeoff. There’s a lot of creative
if the cash flow just isn’t there. Elements of uncertainty will only
strategies, varying from working with refugees to working with
push that conversation further. I think that’s probably where
high-schoolers. There’s a lot of adjustments going on at the
there’s some risk, at least in the eyes of the lenders.
farm level and there’s an overall greater focus on better human resource management.
JENNY: Here in New York, we’re seeing a particular challenge in producer education. Our focus is on explaining the changes
NATE: I agree that this is an issue that extends well beyond
the farm bill will have on existing programs. MPP would change,
farming. Usually the first thing businesses tell us today is that they
LGM, Dairy-RP — there’s going to be different ways that producers
can’t find workers. There’s just a dramatic labor shortage in general,
can use these programs in conjunction, so we’re trying to help
and that’s generating a lot of challenges. It causes operations to think
producers understand those changes. Also, there’s a lot of mistrust
a little bit more, and maybe more creatively, about what they might
after what happened with MPP. We’re hearing people don’t want
do in the way of labor-saving technologies and capital purchases that
to bother with MPP even knowing that they’ll get payments. We’re
could offset some of those labor pressures.
trying to think of how to get this new information out there in a way that is sensitive to that.
BEN: Agreed, it is an issue across the board. I think the reason we’re seeing it impact agriculture, maybe even disproportionately,
LABOR CHALLENGES Labor markets are extremely tight, with low unemployment, immigration enforcement pressure, and remote prospects for any kind of guest worker reform in the current environment. How is this affecting agriculture and what are the implications? JENNY: This is a general economic condition. Any employer you talk to is facing this. There’s also a lot happening at the state level, so in many places, minimum wage is increasing and overtime rules are changing. It’s a restrictive environment. We’re seeing a lot of adjustments to invest in labor-saving or labor-enhancing equipment. On one hand, some producers want 8
FINANCIAL PARTNER
is that jobs in fields like construction or manufacturing or other rural industries are looking for workers too. That pulls workers specifically from the pool of agricultural jobs. That’s forcing agricultural employers to increase their wages at a faster rate in order to find and retain workers, which puts significant strain, especially in crops, commodities and dairy, where there’s already pretty slim to negative margins. JOHN: When we talk to our folks around the country, we can talk about the farm bill or taxes, regulatory reform or trade issues, but the number one thing that has most of our members concerned is who’s going to be there to help them milk the cows at 3AM?
Who’s going to be there to help pick the fruit off the trees? It’s the
the part of the consumer about what agriculture really means and
labor challenge that’s the biggest concern.
looks like, and why it’s important. There’s also a lack of producer
Another important issue I’ll note is global development. We know that by 2050 some of the fastest growing economies in the
understanding about what consumers are actually interested in. There are big opportunities in trying to bridge that gap.
world are going to be in Sub-Saharan Africa. What can we do from
The Northeast is particularly well positioned to have that
a research and development initiative, from a marketing initiative,
interaction between farmers and consumers. As we go forward,
from a trade initiative, to help bring some of our expertise to
and fewer people come from agricultural backgrounds, there’s a
farmers in those countries and help improve their rural economies?
need to continue that education and communication.
This is an opportunity for U.S. agriculture to have a footprint in some of the fastest growing economies around the world. It not only provides an opportunity for agriculture to market and sell products, but it provides food security, and food security ultimately provides national security.
CONSUMERS Consumers today have a higher level of interest in
NORTHEAST AGRICULTURE That’s a great segue into our final question. The Northeast is a somewhat unique region for agriculture. Any concluding thoughts on Northeast agriculture and the road ahead? JENNY: I’ve been impressed with how many progressively managed farm operations there are of all different sizes, across
agriculture and how their food is produced. This is both an
all different parts of the Northeast and all different types of
opportunity and a challenge. How do we take advantage of
production. A lot of farms have invested in specialized processing,
consumer interest?
direct marketing or other types of production. That’s going to be increasingly important going forward and I think that’s one of the
JOHN: Sustainability is becoming a big issue. Increasingly,
Northeast’s biggest comparative advantages.
consumers want to know how something’s produced throughout the supply chain. With the rapidly increasing speed of technology,
NATE: I’ll add two opportunities that pertain to the Northeast.
it may be something agriculture needs to deal with sooner rather
The first is recognition that the Northeast is a very different place
than later.
as it relates to proximity to population centers. So when you think about shifting consumer demand and variability, the Northeast’s
BEN: I work with both folks on the production side of dairy
proximity to population centers will position it well.
and processors who are responding to consumer concerns. There is a pretty big disconnect. There’s a lot of misunderstanding on FALL 2018
9
The other has a longer-term impact — water and climate
that sense and being in areas where there are people, producers
change. Those are going to be at the forefront of concerns on the
know what consumers want and they’re able to respond quicker —
west coast and even parts of the south-central plains, but that’s not
that’s a big advantage.
really an issue that the Northeast deals with. JOHN: I’ve had the opportunity to visit the Northeast on many BEN: Coming from the Northeast originally and then heading
different occasions, and as everyone else has pointed out, it truly
west and seeing the variety in the different types and scales of
is a unique agricultural system and culture that positions it well to
agriculture, I think it’s important to be aware that the Northeast
market and meet the needs of consumers in that region. There’s an
does things differently from other parts of the country. For
incredibly bright future with the farm-to-table movement and with
example, other parts of the country have much larger dairy
value-added processing. All of agriculture has great opportunities
operations that are getting efficient at doing things at a low cost
ahead of it, including the Northeast.
commodity basis. However, I think there is value to both sides of that spectrum. The Northeast has a great advantage in terms of being progressive and innovative, both in higher-valued products and in the management of their operations. The Northeast farm is much more suited to be agile and able to respond. And, in many cases, producers are much closer to consumers. Being connected in
MEET OUR ROUNDTABLE
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Director of Knowledge Exchange, Farm Credit East
JENNY IFFT ASSISTANT PROFESSOR
BEN LAINE SENIOR ECONOMIST
Charles H. Dyson School of Applied Economics and Management, Cornell University
Dairy Processing and Production, Knowledge Exchange Division, CoBank
NATHAN KAUFFMAN VICE PRESIDENT, ECONOMIST & BRANCH EXECUTIVE
JOHN NEWTON CHIEF ECONOMIST
Federal Reserve Bank of Kansas City
10
CHRIS LAUGHTON MODERATOR
American Farm Bureau Federation
FarmStart’s 275th investment was to J&S Brothers Farms LLC, in Mullica, NJ. Pictured at the farm are farm owners Salvador and Jose Constantino with farm manager Bobby O’Sullivan and their FarmStart advisor James Hoffman.
FARMSTART’S 275TH INVESTMENT IN STARTUP FARM, FISHING AND FOREST PRODUCTS BUSINESSES Jose and Salvador Constantino grew up around farms and have worked on farms their entire adult lives. When the
most. Farm Credit East is really there to help
insight provided by FarmStart advisors like
farmers get started.”
James, improves startup businesses’ odds for
Both Jose and Salvador are committed
long-term success.”
opportunity to go from workers to owners
to creating a successful farm that can
presented itself last year, they decided to
provide for their families. They have strong
Farm Credit East, Yankee Farm Credit
make the transition to form J&S Brothers
work ethics, positive attitudes and an overall
and CoBank to fulfill Farm Credit’s long-
Farms LLC. They currently farm 200 acres
thirst to become knowledgeable in all
term commitment to support a vibrant,
in Mullica, New Jersey, growing a variety of
facets of commercial vegetable farming and
entrepreneurial Northeast agricultural
vegetables, including peppers, cucumbers,
business. As a unique program established
community. The program invests
green and yellow squash, butternut squash,
to provide the critical last dollar essential
working capital of up to $75,000 to help
asparagus, and turnips.
for beginning agricultural ventures to get
beginning Northeast farm, forest products
started, J&S Brothers Farms LLC epitomizes
and commercial fishing businesses and
FarmStart’s mission.
cooperatives become operational. Since
The brothers turned to FarmStart after being denied other financing due to lack of business experience and production history.
“It’s rewarding to work with beginning
FarmStart, LLP is a joint initiative of
the first investment approved in August
“The season was starting and we needed to
farm operators like Jose and Salva,”
2006, FarmStart has invested more than
get plants in the ground,” explained Jose.
commented their FarmStart advisor, James
$12.7 million with over 275 agricultural
“We had already invested our own capital,
Hoffman. “Producers like them are the next
and fishing entrepreneurs throughout
so we just needed that additional bit to get
generation and FarmStart gives them an
the Northeast.
everything in the ground and growing. The
opportunity to get started.”
FarmStart investment provided that capital
“Additionally, I work closely with
Each FarmStart participant completes a business plan and monthly cash flow
at the right time, and it was an incredibly
FarmStart customers to provide advice and
budget to serve as a roadmap for the
simple process.”
guidance,” James continued. “I help startup
startup business. A FarmStart advisor
producers transition from just planting
works with each participant to help
Salvador have stepped up to the plate in
vegetables to really looking at farming as a
the new business stay on track toward
their respective roles to ensure the best
business — making sure the i’s are dotted
achieving its objectives. Additionally, Farm
chance at success, working sun up to sun
and t’s are crossed.”
Credit East’s Knowledge Exchange program
During this first season, Jose and
down. Jose manages the day-to-day activities
“The FarmStart program is unique in its
offers resources for these startup producers
and Salvador is responsible for planting and
focus working with beginning entrepreneurs
via hot-topic webinars and industry reports
harvesting decisions.
to establish successful businesses,” said
and analysis.
“We’re here today thanks to the
Scott Andersen, Farm Credit East senior vice
FarmStart investment,” said Jose. “The
president based in the Bridgeton, N.J. office.
capital was available when we needed it the
“Working capital, along with the valuable
For more information on FarmStart, please visit FarmCreditEast.com/FarmStart.
FALL 2018
11
FRUIT OF THE FUNGI NEW YORK OPERATION EXPANDS ITS UNIQUE MUSHROOM PRODUCTION Mushrooms are a unique aspect of
They got started part time, seasonally
sales value has increased by 83 percent to
growing Shiitake mushrooms on logs
here in the Northeast, although that
more than $1.9 million annually.
and selling to a few restaurants and at the
trend is changing. Back in 2007, New
12
percent to 1.79 million square feet; and
agriculture, and one not done by many
Fruit of the Fungi, owned by KC
local farmers’ market. They toured other
York and Rhode Island were the only two
Mangine and his wife Kristi, are one of
New York State mushroom farms and
Northeast states producing mushrooms.
those Northeast operations. Straight out
went to seminars in the western part of
Today, all Northeast states have a share
of college, KC interned on a vegetable
the country to learn more.
in the industry. According to the 2012
farm that cultivated a small amount of
Census of Agriculture, the total number
log-grown mushrooms. In 2005, KC
of trial and error,” said KC. “There is no
of mushroom-growing operations in
and Kristi purchased their own farm
blueprint for the best way to do this, so
the Northeast has more than doubled
in Lebanon, New York, and used that
we’ve run some trials to figure out what’s
to 90 farms; square footage growing
experience and interest in a unique
working and what’s not. It takes time to
mushrooms has increased by nearly 100
product to begin their farming adventure.
really get things efficient.”
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“More than anything, it’s been a lot
THE GROWING OF FUNGUS:
HOW MUSHROOMS ARE GROWN When people think of agriculture, they typically think of raising plants or animals — but mushrooms are a unique farm product because they are neither! There are two types: the more common mushrooms, such as button and portabellas, which are grown on a composted mixture. Then there are more specialty varieties, such as those grown by Fruit of the Fungi, which are grown on wood substrates. To expand production, the Mangines switched their wood substrate from logs to enriched sawdust.
In 2012, Fruit of the Fungi produced
operation. They made sure to have
national Farmer Veteran Coalition, which
1,300 pounds of high-quality specialty
solid footing before signing on to
is supported by the Farm Credit System.
mushrooms. They had plans to grow
additional obligations.”
The label serves to inform consumers that
and realized that outdoor, seasonal log
In addition to helping finance their
the agricultural product was produced by
production wasn’t going to allow them
expansion, the Mangines also switched
to do that. They decided to switch to
from preparing their own taxes to using
year-round indoor production. Working
Farm Credit East’s tax specialists who
has helped to start conversation,” said
with Farm Credit East and the USDA
made sure they got all the deductions
Kristi. “We’re proud to use the label and
Farm Service Agency (FSA), they built a
they were entitled to. “Especially in the
it’s enabled us to create some meaningful
mushroom-growing facility with space
first three years, we were able to get some
market connections.”
for incubation, growing and processing.
state credits that probably would not be
The new facility was completed in 2015
apparent to me,” said KC.
and in addition to allowing them to grow
Today, Fruit of the Fungi is one of only
a U.S. military veteran. “The Homegrown By Heroes label
Those connections are what KC says is part of what he loves most about farming. “I’ve always been interested in growing
mushrooms year-round, it also enabled
about half a dozen producers in New York
things and watching things grow, but
them to expand into new varieties.
State growing mushrooms indoors on a
talking to people and making connections
large scale. The farm grows eight varieties
is what I enjoy the most. We have a
said KC. “The new facility gave us the
of mushrooms, including Maitake, Lion’s
unique, high-quality product, so it’s great
capacity to grow about seven times more
Mane, Oyster and Shiitake. They sell their
to tell someone about your product when
mushrooms, so over the past few years,
mushrooms, including dried mushroom
you’re confident with what you’re selling
we’ve really grown into the additional
products, wholesale to small groceries and
and you know that they’re going to be
production space.”
restaurants, as well as direct to consumers
happy with it.”
“That was a pretty big jump for us,”
“The Mangines were strategic in
at farmers’ markets and via a small CSA.
their growth, progressing at a measured
Another unique aspect of the Mangine’s
“I also like the flexibility,” KC continued. “The ability to make the most
pace,” commented Craig Pollock who
operation is that they market under the
of the years we have together with our
worked with the Mangines while they
Homegrown By Heroes label. Kristi is
children has been great. So flexibility is
were developing their business. “They
an army veteran, having served in the
the greatest advantage, and the sales and
established their markets and then sought
early 2000s, and Homegrown By Heroes
marketing aspect is the most fun.”
counsel on the best way to develop their
is the official branding program of the
F A R M E R V E T E R A N F LY- I N In July, Farm Credit East joined with other Farm Credit associations and more than 30 farmer veterans during a Farm Credit Farmer Veteran Fly-in in Washington, D.C. Farm Credit East representatives Tom Cosgrove and Kyle Bell, along with John Lemondes, owner of Ellys Acres Farm in Jamesville, New York, and president of
the New York Farmer Veteran Coalition, Inc., visited multiple Northeast legislative offices to help policymakers understand the importance of programs that enable returning service members to forge meaningful careers in agriculture. They’re pictured here with Congressman John Katko (NY-24).
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13
WASHINGTON Update
HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH
Tom Cosgrove Senior Vice President for Public Affairs
Update on the 2018 2019 Farm Bill
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When lawmakers left Washington prior to the mid-term elections, they left behind some unfinished business for the 115th Congress when it returns from recess. For many in agriculture, topping the list of unfinished business is completing the 2018 Farm Bill. Early in the summer, it appeared there was a window for completing the farm bill with both the House and Senate passing the legislation in June. At that point, however, the process bogged down. There has been little progress by the House and Senate conference committee members tasked with negotiating a single version of the bill. Underlying the lack of progress by
have comparable changes to SNAP and
uninterrupted. In addition, some of the
the conference committee are major
passed 86-11. While the SNAP changes are
commodity programs, while expired, will
policy differences between the two
the biggest sticking point, there have been
continue through each crop’s marketing
chambers’ versions. The biggest policy
disagreements between the two chambers’
year, and thus are effectively in place into
differences relate to the House’s proposed
negotiators over some of the farm program
2019. The lack of a major disruption may
changes to the Supplemental Nutrition
provisions as well.
be one reason why Congress was able to
Assistance Program (SNAP), formerly known as food stamps.
term extension of the 2014 Farm Bill.
With Congress unable to pass a new
While USDA indicated it could keep
about 80 percent of farm bill spending.
farm bill, the 2014 Farm Bill expired on
many programs operating, a number of
The House version would make changes
September 30. What are the impacts of
programs are now on hold due to lack of
to SNAP eligibility and add new work
its expiration? Perhaps less than you
authorization, funding or a combination of
or job training requirements along with
might think, which contributed to
both. These include certain conservation
providing funding for state training
Congress’ inaction.
programs; beginning farmer assistance;
SNAP and nutrition programs comprise
programs. These changes were strongly
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leave Washington without passing a short-
2014 FARM BILL EXPIRES
Since major programs such as SNAP
value-added, export market development
opposed by House Democrats, which led
and crop insurance have funding and
and organic technical assistance programs;
to the bill passing the House by a narrow
authorization outside of the farm bill
and some nutrition assistance programs
213-211 margin. The Senate version didn’t
itself, those programs have continued
other than SNAP. In most cases, where
FINANCIAL PARTNER
H
FA R M CR EDIT A DMINISTR ATION VISITS THE NORTHEAST HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH Jeff Hall, board member of the Farm Credit Administration,
manager Rob Yurkewecz, Mr. Hall and Mr. Kramp visited
Farm Credit East’s regulator, and his executive assistant
Schoharie Valley Farms, operated by NYS Commissioner
Kevin Kramp, recently made a visit to the Northeast to learn
of Agriculture Richard Ball, in Schoharie, N.Y., and Saratoga
more about the diversity of the region’s agriculture. Along
Sod Farm, owned by Farm Credit East board vice chair Laurie
with CEO Bill Lipinski and Cooperstown, N.Y., branch office
Griffen and her husband, in Stillwater, N.Y.
funds have been disbursed, activities can
tariff under NAFTA will maintain zero
the recent election results. Though both the
continue, but USDA will not take new
tariffs. The agreement could provide
Chair and Ranking Members of the House
applications or disburse funds for these
additional market access to the Canadian
and Senate agriculture committees have
programs until Congress reauthorizes them.
dairy market as well as eliminate part of
indicated they intend to complete work on
Canada’s pricing system that was used to
the farm bill following the election, now
through the end of the calendar year
disadvantage certain U.S. specialty dairy
that the Democrats have taken control of
so Congress must act before then. For
product exports to Canada. The agreement
the House, they may want to put their own
example, the Dairy Margin Protection
could also provide some additional access
mark on the farm bill.
Program will run through the end of the
for eggs, chicken and turkey products,
calendar year but it is not authorized for
but maintains a provision protecting the
unable to complete work on the 2018 Farm
2019. Extending the current dairy program,
Canadian lumber industry. Many industry
Bill by September 30. Both chambers’
or authorizing a new one before December
groups view the agreement as a positive
versions of the farm bill maintained a strong
31, is viewed by many as a “must pass” for
step, but others have taken a “wait and
crop insurance program and other risk
Congress, but then many thought the same
see” attitude.
management options for producers as well
Other programs’ authorizations run
thing about passing or extending the farm bill before September 30.
as improved the USDA Farm Service Agency WHAT HAPPENS NEXT? When Congress returns post-election,
NAFTA[USMCA
It is disappointing that Congress was
loan guarantee program. And though there was significant activity on the ag labor issue
it will have to address another piece
in 2018, Congress’ continued failure to
of unfinished business — funding for
pass a workable agricultural guest worker
the expiration of the 2014 Farm Bill, but it
the government. Congress has passed,
program is a major concern.
also marked the announcement of the new
and the President signed into law, five
Here’s to hoping that the 115th
U.S.-Mexico-Canada Agreement (USMCA),
of the 12 appropriations bills that fund
Congress completes the farm bill and
which may create an item of “New
the government annually, along with a
other critical legislation, so that it doesn’t
Business” for Congress when it returns.
temporary spending bill to fund the rest
leave its unfinished business for the
USMCA, the trade agreement to replace
of the government through December 7.
next Congress.
September 30 was notable not only for
NAFTA, needs to be approved by Congress before taking effect. Agricultural products that had a zero
How Congress deals with continued government funding for the farm bill, and approval of the USMCA, could be shaped by
FALL 2018
15
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