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FarmCreditEast.com
OVERCOMIN G
LABOR CHALLENGES ALSO IN THIS ISSUE:
2019 Director Candidates SPRING 2019
INSIDE
P.15
2 | News & Views
10 | GenerationNext
14 | Loan or Lease
3 | CEO Column
11 | Patronage Program
15 | Director Candidates
4 | Cover Story
12 | Public Policy Update
N EW &V IEW S S Welcome New Board Member! Insights & Perspectives Be sure to check out Farm Credit East’s 2019 Insights and Perspectives report. This year’s edition provides industry outlooks and insights from both industry experts and Farm Credit East’s knowledgeable staff.
Topics Include: • “Fire Fighting” or “Fire Prevention”?
In January, Keith Stolzenburg, of East Amherst, NY, was appointed as an outside director to the Farm Credit East Board. Keith is a certified public accountant and brings a wealth of financial expertise, having worked for PricewaterhouseCoopers LLP in a number of roles, including as Financial Services Assurance Partner, the Managing Partner of the Buffalo, NY, office and Market Team Leader. During his 36 years of public accounting experience, he served a mix of public and private clients in a variety of business sectors, with a concentration in the financial services industry. We’re pleased to add Keith’s skillset to our Board!
FFA Student Scholarship As part of Farm Credit East’s commitment to supporting the next generation of agriculture, commercial fishing and forest products industry leaders, we offer a scholarship for students involved in the National FFA Organization to support their Supervised Agricultural Experience (SAE) or educational opportunities within the agriculture, commercial fishing or forest products industries. Scholarships are awarded to students who have a strong SAE and understand their project’s impact on their future career in an agriculturally related field. This scholarship is awarded semi-annually, with four $500 scholarships awarded each cycle. Apply: FarmCreditEast.com/FFA Deadline: June 30, 2019
• Northeast farm economy • Crop insurance update • 2019 outlooks for the dairy, grain and oilseed, apple, vegetable, greenhouse and nursery, forestry, and fishing sectors To view this year’s report, visit FarmCreditEast.com/InsightsAndPerspectives
Calling All Talented Photographers! Submit your photos for a chance to win $100. We’ve received many creative images representing Northeast agriculture and country life from customers, employees and friends over the years. As the weather warms, we hope you’ll get outside to capture images representing modern agriculture, commercial fishing and forest products. Upload your creative shots for a chance to be featured in our 2020 calendar! We look for photos representing Northeast agriculture during every season, so don’t forget to send in the snowy scenes you captured this winter too! We encourage creative photos from all industries, from forest products to row crops, commercial fishing to dairy — and all other industries in between.
Ready! Aim! Shoot!
Upload photos at FarmCreditEast.com/Calendar Deadline: July 31, 2019
2
FINANCIAL PARTNER
CEO’s MESSAGE
I N N O VAT I N G F OR
TO M O RROW Bill Lipinski, CEO, Farm Credit East
Farm Credit East recently published
Some of these approaches are elegant in
Maintaining financial capacity is a
our 2018 annual report with the theme
their simplicity, but good solutions don’t
key priority of our board of directors
“Growing for Tomorrow.” It seemed
need to be complex to be effective.
who set the strategic direction for the
appropriate given how “growing” is central to everything we do in agriculture.
At Farm Credit East, I’ve tried to instill a
Association, and that’s why I hope all
culture of innovation to take advantage of
members will take the time to vote in the
As our customers execute on their
our unique opportunities and address our
upcoming director elections. Elsewhere
2019 business plans, I want to drill down
business challenges. Given the tremendous
in this issue, you can read about the
on what it takes to continue growing
advancements in the industries we serve,
seven outstanding candidates who have
and moving ahead. When I use the term
as well as in the financial services industry
been nominated to serve on the board of
growing, I’m not just talking about
where we compete, we have to innovate to
directors. Stockholders will receive their
getting bigger. I’m also using the term in
develop high value products and services
ballots in early April and I encourage you
a figurative sense to capture the ongoing
and tools that empower our employees to
to vote to fulfill your important role in the
cycle of preparation, planting and harvest,
deliver them.
governance of your cooperative.
or raising and caring for livestock, and the
We have an innovation team as well as
We don’t know what opportunities
effort it takes to do those activities better
a software platform that helps us source
or challenges 2019 will bring for Farm
each year.
innovative ideas from our employees and
Credit East and its customers, but I
The environment that Farm Credit East
I have recently named one of our top
remain optimistic. As I travel throughout
and its customers operate in is unique and
executives, John Caltabiano, to oversee
the Association territory meeting with
it’s constantly changing. What’s always
innovation efforts at Farm Credit East
customers, I see how customers are
most impressed me about our region’s
going forward. In 2019, we have several
proactively positioning their businesses
producers is their proactive and innovative
technology initiatives underway to
for long-term success.
mindset to adapt to changes in weather,
enhance the customer experience and
market conditions, consumer preferences,
our business operations.
production, information technology and the regulatory landscape, to name a few.
To be able to invest in innovation, the
I want customers to know that in Farm Credit East, you have a partner in fulfilling that mission. Your cooperative is financially
cooperative has to be financially strong.
strong and has a talented team dedicated
In recent Customer Service Council
In 2018, Farm Credit East had earnings of
to your success. And just as customers are
meetings some of those creative strategies
$178 million and distributed two separate
making the necessary changes in their
were identified and are featured in
patronage dividends associated with these
businesses, we’re continuing to innovate
this issue’s cover story, “Overcoming
earnings. In February 2019, members
to ensure we’re ready to help you keep
Labor Challenges.” Faced with a variety
received a patronage dividend of $65
growing for tomorrow.
of challenges in finding and retaining
million in addition to a one-time special
skilled employees, the operations profiled
patronage dividend of $15 million paid in
have found new ways to adapt given the
October 2018.
circumstances facing their businesses. SPRING 2019
3
OVERCOM IN G LABOR CHALLENGES Finding labor, and qualified labor at that, has been a growing concern in the U.S., especially within the agriculture, commercial fishing and forest products industries. And, the debates about how to address this issue have been going on even longer. Agriculture needs an efficient and economical solution to agricultural labor challenges. Investing in new employees and their training, only to have them leave within a few months (especially during the peak of the season), is as much of a hardship as finding them in the first place. There has been little progress in recent years on legislation to address the situation. Yet, the cows have to be milked, the fields have to be planted, and the timber needs to be harvested. Awaiting a legislative solution is not a viable solution. While there hasn’t been progress on a new ag guestworker program, there are other options for producers (see “Temporary and Permanent Options for Foreign Workers Still Exist” later in this issue). So what’s a producer to do? We recently interviewed several Northeast businesses who have deployed unique strategies in their operations to combat the labor challenges they were facing. As a result, they have found success in hiring and retaining skilled labor, or have circumvented the issue by implementing technology to cut back on labor demands. Farm Credit East will continue to work with agricultural labor coalitions to work toward new policies that could provide employers access to more agricultural workers. In the meantime, here are some strategies other Northeast employers are using to overcome labor challenges.
4
FINANCIAL PARTNER
OLSON’S GREENHOUSES, RAYNHAM, MASS.
FAIRHAVEN SHIPYARD, FAIRHAVEN, MASS.
PARTNERING WITH VOCATIONAL SCHOOLS Depending on where in the Northeast you’re located, this type of education may be termed differently, but essentially a vocational or technical school is an educational program that provides students with job skills training to prepare them to enter particular fields in the workforce. We spoke with Matt Piscitelli, owner of Olson’s Greenhouses in Raynham, Mass., who has found success in hiring students from floriculture programs, and Kevin McLaughlin, owner of Fairhaven Shipyard in Fairhaven, Mass., who works closely with the electrical,
Kevin sits
mechanical, welding and coating application vocational programs to
on welding,
train and recruit potential employees.
mechanical and
Olson’s Greenhouses operates five acres of heated, covered greenhouses and one acre of high-tunnel production. Outdoors they grow 65 acres of mums, cabbage, kale and grasses. The operation also has three retail markets. It’s a seasonal business with multiple enterprises involved, each with different seasonal requirements, so Matt says, without question, finding adequate labor is challenging. When turning to the vocational school programs, Matt’s focus was on young and local. “That turns into local and seasoned very quickly,” said Matt. “Excitement breeds education, so as long as they’re excited
marine services advisory boards. “It’s our opportunity to engage the teachers and reinforce the types of skills we’re looking for. We can’t drive their curriculum, but we let them know the opportunities we have available and the skills we need to fill those positions,” he said. “We’re also able to give teachers a sense of our future hiring needs,” Kevin added. “It’s a very good information flow.”
about the industry they’re in, or the major or career path they’re
One important thing to keep in mind with this type of employment
interested in pursuing, there’s opportunity for us. An excited 16, 17
is they are still in school and, in some cases, may be minors. This
or 18 year old is very different than a person with no experience that
comes with its own restrictions. For example, in Massachusetts, there
speaks little English, but is looking for a job. That excited young adult
is a youth employment permit process that must be completed and
grows with us.”
obtained for each position where a minor is employed. Matt mentions
That excitement is what Matt says is key to his partnership with the vocational schools. “If you bring someone in and bore them to death,
there is also a level of comfort and relationship that often needs to be established with the parents.
they’re not going to stay, even though it’s what they’ve chosen to do.
Additionally, the school schedule, in Matt’s case, often limits them
I’m offering jobs with real-world experience. That’s a benefit to their
to weekend help. “We understand the limitations and we don’t shy
education,” said Matt.
away from locking them in for two weekend days for three months.
Kevin expressed a similar sentiment. Fairhaven Shipyard is a fullservice shipyard servicing a variety of vessels, including the repairs and construction of fishing vessels. “Our hires through the vocational
It’s forcing us to work outside what our production manager or head grower wants, and instead think about the long-term — when those students are done with school, they’d rather work close to home.”
school are really just great people,” he said. “I’m about marketing, so
Fairhaven Shipyard operates under a cooperative structure with their
I’m trying to sell myself to my future employees the same way I’m
local vocational school. During students’ junior and senior years,
trying to sell myself to potential customers.”
they come on board in a trainee or internship position for four-week
Both Matt and Kevin have developed strong relationships with the schools they work with. Matt said, “We talk to admissions about students coming in to the floriculture program and they’re always willing to connect us with opportunities.”
periods for hands-on training. “That’s a really valuable tool,” said Kevin. “It gives students a sense of their career options, and it’s great for us as the employer because we get a chance to get to know them and they get a chance to know us to see if there’s a potential fit for permanent employment.” SPRING 2019
5
MECHANIZATION Pete Hionis operates Hionis Greenhouses. Located in Whitehouse Station, NJ, this family operation founded in 1985 grows 14 acres under cover and has 65 acres of outdoor production. The operation grows seasonal plants and flowers, including Easter bulbs; spring flowers, bedding and hanging baskets; hardy mums; and poinsettias. Their plants are distributed to garden centers, landscapers, grocery stores and some re-wholesalers. In recent years, the farm was increasingly facing challenges in finding labor. “Back in the day, when someone didn’t work out so well, you could easily find somebody else. That’s no longer the case.
“The
The labor pool has really dried up,” said Pete.
automation
The 2017 season was the turning point. The farm began investing in structural changes towards mechanization and automation. Last year, with the help of financing from Farm Credit East, the operation purchased a whole production line with a transplanter. Along with it, they purchased a flat filler to synchronize the production line.
has also freed up staff time to do other jobs,” Pete continued. “A job that typically took 15 people one week to complete, is now getting done in one day with just four people. That frees up their hands to do other work.”
In the last couple of years, we’ve invested in automation and infrastructure.
As Pete looks to the future, he says they’re continuing to look at new automation to eliminate other steps in their operations. For other producers looking to go this route, his advice to them is to get the automation in sooner rather than later. “We really have no choice,” he said. “Increased minimum wage laws are only going to escalate things —
They also purchased additional conveyor belts so that fewer hands
workers currently earning $15 an hour will want more. Workman’s
were needed to move things around. For example, now when it’s
comp and payroll liability will increase — it’s going to create a
time to pack the flowers, they’re all brought to a centralized area
tsunami effect.”
and put on a conveyor belt to move down the line — from potting,
IMPROVED EMPLOYEE HOUSING
to adding the UPC and then boxing them. The farm also purchased cart pullers to move the carts around
retaining employees thanks to improved farmworker housing they
versus a person manually pulling them. Lastly, they invested in
constructed in April 2017. “We’re seeing staff stay longer, we’re not
infrastructure improvements, such as loading docks. The improved
having as much turnover and we’re able to better build on our team,”
loading docks save time on shipping and receiving because trucks
said Dan Schumacher.
can be loaded more easily.
Today, the farm milks about 1,800 cows and raises heifers, along
“In the last couple of years, we’ve definitely invested a lot of money
with growing 4,600 acres of mostly alfalfa and corn. The dairy side
in automation and infrastructure,” said Pete. “And we’re going to
of the business relies heavily on hired help. They have a staff of
continue doing that because the labor situation is only getting worse.”
about 20 people who handle feeding the cows and heifers, milking,
Now a year in, when asked if these investments were the right
6
Schum-Acres, a dairy farm in Naples, NY, has found success in
maintaining the barns, and calvings.
move, Pete’s response: “Absolutely! We used to need 15 people on
Prior to building the new housing, the farm had two house trailers
the transplanting line and now we only need four. Not only have we
that were dated and getting a bit overcrowded, so everyone had to
been able to trim down on labor expenses, but we’ve also increased
share a bedroom. The business was growing, so they needed to hire
production and sales.”
more labor, but didn’t have adequate housing.
FINANCIAL PARTNER
ROBOTICS A technology that is increasingly being adopted by some Northeast dairy farmers is robotic milking equipment. Dubbed “Automatic Milking Systems” by their manufacturers, these machines can significantly reduce the labor needed for milking cows. Coupled with automated feeding and manure management systems, farms can reduce the employees needed to operate their farm. Equally important, it frees staff time to take on higher-value tasks, such as managing the herd for optimal health and production, rather than milking. In addition to saving labor, producers are realizing other benefits. By allowing cows to determine when to be milked, these systems often increase productivity. They also collect a significant amount of data that can be used to improve herd management. The number of automated milking systems in use in the Northeast has grown consistently in recent years as producers respond to the ongoing challenges relating to labor availability and turnover. It is estimated there are now more than 200 units installed in the region. All of this, of course, comes with a cost — about $175,000 per robotic unit. There can be other challenges to integrating these units into existing dairy operations but for some, it’s been worth the investment, and they have seen the benefits of the technology.
HIONIS GREENHOUSES, WHITEHOUSE STATION, NJ
SPRING 2019
7
“We were having a hard time keeping employees, especially the
Prior to this upgrade, Dan says they were seeing a lot of turnover.
good ones, since they couldn’t have their own bedroom and
“We were having issues with people showing up to work, but they
conditions in the house were less than ideal. We were also looking
didn’t want to share a bedroom with someone they didn’t know.
to be more efficient as far as heating and being able to clean them.
That was a challenge. And the house was a bit rundown, so we were
We wanted to get rid of the housing trailers and build something
losing people who could find better housing elsewhere. With the
that would be more room than we would need so that we could
upgraded housing, we feel we took that right out of the equation.”
grow into it.”
The improved employee retention has been a benefit. “Every time
So the team at Schum-Acres did some research, visited a few farms
you have to train a new employee, it’s pretty expensive. When you
and developed a plan from what they saw. They constructed a
meet a potential new employee who seems like a good fit and then
duplex with 16 bedrooms. There is a shared mudroom and laundry
you lose him or her to the housing situation that hurts.”
room and then two separate doors into each side of the house. Both sides have a kitchen and living room with a multi-stall bathroom and eight bedrooms. “Right now, everyone has their own bedroom and they can lock the door,” said Dan. “But the bedrooms were built large enough that we could adequately fit two beds, if need be.” The Schumachers utilized the New York State Farm Worker Housing
Dan’s advice to other ag employers — it’s not always about money. “The better you’re able to treat your help, and can have staff that are really invested in your business, the more it benefits everyone. The different things that you can do to make your business attractive to employees are things that you want to be doing. Housing is one of those things — certainly not the only one — but it’s a big one.”
Loan Program to fund this construction and Dan indicated it was relatively easy to use. He noted there is an inspection required at the conclusion of the project to make sure it’s up to code, but they didn’t have any issues.
NEW YORK STATE FARM WORKER HOUSING LOAN PROGRAM The New York State Farm Work Housing loan program (FWH) is administered by Farm Credit East in partnership with New York State Homes and Community Renewal (HCR), and provides no-interest loans to help finance improvement of existing housing or the construction/purchase of new housing for farm workers. There is a onetime five percent administrative fee to participate in the program. Loans are available to New York agricultural producers, including fruit, vegetable, greenhouse and nursery, equine, and dairy operations.
SCHUM-ACRES, NAPLES, NY
Loans are available up to $100,000 per year for farm worker housing projects. The program is administered as a revolving loan fund, with loan repayments made by the borrowers applied to the balance of available funds. The loans are repaid in equal, annual payments of principal. The term of the loan may not exceed ten years. Applicants must demonstrate the need to improve seasonal or year-round farm worker housing, which they own or operate, in order for the housing to comply with the applicable state building and health codes or to construct new seasonal or year-round farm worker housing. The funds cannot be used for housing for the farm owner’s family. For more information, contact a New York State Farm Credit East office. 8
FINANCIAL PARTNER
Temporary and Permanent Options for Foreign Workers Still Exist
By: L.J. D’Arrigo, Partner Harris Beach PLLC
One of the most pressing issues facing the agricultural community
adversely affect the wages and working conditions of similarly
is labor. Producers are left facing the question of how to secure
employed U.S. workers.
reliable farm labor to fill seasonal needs while complying with increased enforcement. Advertising doesn’t seem to work and if you are lucky enough to hire U.S. workers, they may not stay more than a few days.
Who qualifies? Businesses must qualify as a (1) U.S. employer (Farms/Ranch); (2) association of agricultural producers; or (3) farm labor contractor. Associations of agricultural producers can participate as a sole employer, agent
There is no perfect visa program to
with one member, or joint employer
alleviate the burdens of labor shortages,
with multiple members. This is a good
but the H-2A program is still a viable
option for farms that have the same
and workable solution. More and more,
period of need and can be a cost sharing
we are developing individual H-2A
mechanism. Work must consist of full-time
programs for farms that achieve year-
(35 + hours/week) agricultural labor
round labor solutions between separate
or services, such as planting, raising,
and distinct positions. For example,
cultivating, harvesting or production of any
some farms file a separate “Winter
agricultural or horticultural commodity.
Maintenance Worker” position covering
Beyond the seasonal labor options,
the Winter months while maintaining
there are permanent labor solutions
their regular crop-related positions for
for farmworkers and other lower-skilled
the growing season.
positions through the U.S. Department
The H-2A temporary agricultural
of Labor’s Program Electronic Review
program allows agricultural employers
Management (PERM) Labor Certification
who anticipate a shortage of domestic
program. This is essentially an enhanced
workers to bring nonimmigrant
H-2A program and mirrors many of the
foreign workers to the U.S. to perform
filing and recruitment steps. For many
agricultural labor or services of a
years, this option was not possible
temporary/seasonal nature.
because of very long waiting periods for this particular green card category (EB-3).
Employment is of a seasonal nature where it is tied to a certain time of year by an event or pattern, such as a short annual growing cycle, and requires labor levels above what is necessary for ongoing operations. Employment is of a temporary nature when the employer’s need to fill the position with a temporary worker will, except in extraordinary circumstances, last no longer than 10 months. The employer must demonstrate that: (1) there are not sufficient able, willing and qualified U.S. workers available to perform the temporary and seasonal agricultural employment for which nonimmigrant foreign workers are being requested; and (2) employment of H-2A workers will not
However, these wait times have decreased sufficiently to now make this a viable option. If timed carefully, an agricultural employer can continue to bring its H-2A workers into the U.S. and at the same time process applications for permanent resident status for these workers. In some cases after a couple more seasons on the H-2A, these workers would have independent work authorization through the pending green card process and can remain in the U.S. without further H-2A authorization. The green card process can take two years to fully complete, but workers would be able to remain in the U.S. for a significant portion of this time period. Finding the labor their operations need may require producers to consider a combination of solutions. While not suitable for every situation, the H-2A and PERM programs are two viable options agricultural employers may want to consider as they look to secure a stable workforce. SPRING 2019
9
PROFILE
JOE NUCIFORO MEAD ORCHARDS TIVOLI, NY
A
s the next generation of agriculture, commercial fishing
Joe most appreciated some of the management skills he learned
and industry leaders move into management positions,
through the GenerationNext program. “Management is constantly
developing their leadership skills and business knowledge are
being refined, so looking at it under different lenses helps to keep
imperative to their future success. To help young leaders develop
you from falling into habits,” he said. “GenerationNext really
these skills, each winter, Farm Credit East hosts GenerationNext
provided a different lens to help refine myself as a manager, and
seminars. This program helps participants identify areas for person-
because the retail manager I was working with also participated,
al growth and development; acquire tools to help manage
it helped to refine the team as a whole.”
an agricultural business; and provides opportunity to network with other young industry leaders.
Joe added that the greatest take-aways from the program were the communication strategies coupled with networking. “Whenever
Joe Nuciforo was a recent participant of a GenerationNext class.
you get a chance to sit down with farmers, particularly from other
Joe started on his agricultural career path at the ripe young age
sectors, that’s always an extreme benefit.”
of 14, working his way from the bakery counter into the field and eventually into a management role. Today, he is the orchard manager at Mead Orchards, a diversified fruit farm in Tivoli, N.Y., growing tree fruit, including apples, pears, peaches, plums and cherries, as well as berry crops. The farm operation is heavily focused on selling its products retail through farmers’ markets and a significant portion of the apple crop is sold to packing houses.
Joe continued, “While a lot of programs help businesses identify strengths and weaknesses, and challenge you to look at things critically, GenerationNext takes a different approach by focusing on how to communicate those things within the management team. That communication piece is critical. In agriculture, you spend exorbitant amounts of time with the people you work with, and if you can’t communicate effectively, you’re setting yourself up for undue stress.”
10
FINANCIAL PARTNER
FARM CREDIT EAST’S PATRONAGE DIVIDEND PROGRAM:
YOUR SHARE IN OWNERSHIP Farm Credit East is a financial cooperative, owned by the customers we serve and governed by a customer-elected Board of Directors.
Patronage Paid by Year
Our customer-owners share in the financial cooperative’s success through patronage dividends.This cooperative model enables Farm Credit East to offer
$80
competitive interest rates up front, and then through continued success, return
$75
a share of net earnings to our owners via patronage dividends. $70
$
What you should know about patronage dividends:
❖ 2019 marked the 23rd consecutive annual patronage payment we’ve
$60
paid, with $65 million in patronage dividends distributed to more than Credit East paid a special, one-time $15 million patronage dividend based on 2018 earnings.
$50
In Millions
11,400 eligible customer-owners.Additionally, in October 2018, Farm
$40
❖ Patronage payments are paid entirely in cash. Payments are taxable, so we encourage recipients to consult with their tax advisors about their specific situations.
Is a patronage payment guaranteed each year?
$30
$20
The Farm Credit East Board evaluates a variety of business factors, including earnings, growth and economic conditions, to determine if it is appropriate to
$10
pay patronage dividends in a given year. In evaluating these factors, the Board
19 20
17 20
15 20
11
13 20
20
09 20
07 20
05
03
20
20
9
01 20
on our balance sheet to help us continue serving agriculture, commercial fishing
0
19 9
be returned to customer-owners in the form of patronage dividends or retained
19 97
makes a business determination as to whether Farm Credit East earnings should
Customer-owners have earned more than $793 million in dividends from ownership of their cooperative over the past 23 years.
and forest products industries through cycles.
How does patronage impact your interest rate? On average over the past three years, eligible customers have received 25 percent of the interest earned during the year. The level of the patronage
In 2018, $60 million from 2017 earnings was paid in February and an additional, one-time patronage of $15 million was paid in October.
payment is based on the interest earned from your loan during the year. The chart below compares a rate from another bank to the Farm Credit East rate with the patronage dividend.
LOAN RATE
PAYMENT TERM
ANOTHER BANK’S TERMS $ 200,000 5.50 % $ 1,375.77
20
TOTAL INTEREST $ 130,186
FARM CREDIT EAST WITH PATRONAGE DIVIDEND $ 200,000 5.50 % $ 1,375.77 20 $ 130,186 Based on a patronage dividend of 25% of interest accrued. This is an example and actual results may vary. Patronage is not guaranteed.
*
PATRONAGE NET DIVIDEND* INTEREST
$ 32,547
$ 97,639
$793
MILLION IN DIVIDENDS SPRING 2019
11
WASHINGTON Update
Tom Cosgrove Senior Vice President for Public Affairs
Agriculture Policy and the 116th Congress The 116th Congress got off to an eventful start. Its members were sworn in on January 3 during a partial government shutdown that became the longest in U.S. history. But despite the political turmoil that
Chairman Pat Roberts called the farm bill,
winning the majority in the House,
“evolutionary, not revolutionary.”
Representatives Collin Peterson (D-MN)
Implementing the new farm bill and
roles with Peterson becoming Chairman
was hampered by January’s government
and Conaway Ranking Member. The Senate
engulfed the start of the 116th Congress,
shutdown. The federal government is
committee leadership remains the same
just two weeks earlier there was a glimmer
funded through 12 annual appropriations
with Chairman Pat Roberts (R-KS) and
of bipartisanship in Washington with the
bills. Five of the fiscal year 2019 bills
Ranking Member Debbie Stabenow (D-MI)
signing of the 2018 Farm Bill on December
passed and were signed into law, which is
continuing in their roles, though there will
20. The farm bill was completed just before
why it was not a complete shutdown, but
be a new Chair in the 117th Congress, as
time ran out, or the new Congress would
USDA is one of the agencies that was not
Senator Roberts has announced he won’t
have had to restart the farm bill process.
funded. So although FSA offices opened
run for reelection in 2020. Chairman
In the end, the farm bill passed both
for part of the month, they were operating
Peterson has indicated that his focus will
houses earlier in December with strong
on a limited basis and direct loan and
be on implementation of the farm bill and
bipartisan support, by margins of 386-47
loan guarantee applications were put on
oversight of USDA. Chairman Roberts has
in the House and 87-13 in the Senate, in
hold along with processing applications
indicated similar priorities, although he
part because it didn’t make major changes
for the second round of trade assistance
said he will also be holding hearings on
to the Supplemental Nutrition Assistance
payments to producers. In addition, crop
agricultural trade.
Program (SNAP; formerly known as Food
and commodity reports were delayed along
In terms of the makeup of Congress
Stamps), crop insurance programs or most
with implementing new farm bill programs,
and the Northeast delegation, although
commodity support programs. The changes
like the DMC.
there is still one House race pending, the
to the dairy program, now called Dairy Margin Coverage (DMC) have generally been well received by dairy producer
12
and Mike Conaway (R-TX) have switched
carrying out existing USDA programs
116th Congress will have 90 new House
THE 116 CONGRESS TH
Given the farm bill has been completed,
members, including 14 Democrats from the states served by Farm Credit East. Four
organizations and Farm Credit was pleased
what will be the focus of the agriculture
of those new members were appointed
with the improvements in the USDA Farm
committees in the 116th Congress? The
to the Agriculture Committee, making
Service Agency (FSA) loan guarantee
leadership of the two committees has not
a total of seven from the Northeast. In
program. Senate Agriculture Committee
changed, though given the Democrats
addition to returning members House
FINANCIAL PARTNER
Rules Committee Chairman Jim McGovern (MA-2) and Sean Patrick Maloney (NY-18), freshman representatives Anthony Brindisi (NY-22), Antonio Delgado (NY-19), Jahana Hayes (CT-5), and Jeff Van Drew (NJ-2) were all appointed to the committee as well. The seventh Northeast member on the committee is Representative Chellie Pingree (ME-1) who is starting her sixth term in Congress, while Ann Kuster (NH-1) who was a member in the last Congress has left the committee. Another House Agriculture Committee member in the last Congress, John Faso (NY-19) lost his reelection bid to Delgado.
HOUSE AGRICULTURE COMMITTEE MEMBERS FROM THE NORTHEAST: Anthony Brindisi (NY-22) Antonio Delgado (NY-19) Jahana Hayes (CT-5) Sean Patrick Maloney, (NY-18) Jim McGovern (MA-2) Chellie Pingree (ME-1) Jeff Van Drew (NJ-2) There are nine new Senators, but no newcomers from the Northeast in the Senate or on the Agriculture Committee, as Senator Kirsten Gillibrand (D-NY) and Patrick Leahy (D-VT) were reappointed to the committee.
Whether your members of Congress
With the farm bill completed there are
are new or returning, it’s important for
still other important policy discussions on
Farm Credit East members to reach out
tap for the year ahead. Finding a workable
to them to discuss the importance of
solution to ensure a stable supply of labor
agriculture, forest products and fishing to
for Northeast agriculture, including a new
the region and their local communities.
agricultural guestworker program, will
Having so many members on the agriculture
be a top priority. There are also important
committees from the Northeast provides
regulatory efforts underway such as the
a great opportunity to connect with those
Administration’s proposal to overhaul the
policymakers who will have a voice on
Waters of the United States (WOTUS) rule.
one of the key committees impacting
With an agreement reached on funding
our industries. Farm Credit East will be
the federal government through the rest of
engaging with new and returning members
the fiscal year, hopefully the 116th Congress
to let them know about the important work
can overcome its rocky beginning because
our members do and how Farm Credit
it will need to start work on fiscal year 2020
supports them.
appropriations soon. And without the nearterm prospect of a government shutdown, it will allow USDA to do its work in carrying out existing and new farm bill programs and, now that the farm bill is complete, allow Congress to focus on other policy priorities.
SPRING 2019
13
LOAN
OR
Leasing is a financing option that Farm Credit East offers to its members through Farm Credit Leasing, a separate entity operated by CoBank, Farm Credit East’s funding bank. It’s always best to talk with your Farm Credit East relationship manager and/or tax advisor when evaluating loan or lease financing, but in some cases, a lease may be a beneficial
LEASE
option to preserve operating capital, especially when taking on a new project or making a large purchase. Mike Fleming, senior relationship manager with Farm Credit Leasing, and Scott Andersen, Farm Credit East branch manager in Bridgeton, NJ, recently discussed some situations when leasing may be a good fit.
PRESERVE LIQUIDITY Leasing offers 100 percent financing with one down payment. This allows for some flexibility in preserving capital for other projects without having it tied up in the leased asset. This can be particularly helpful during an expansion project to be able to finance 100% of a new building or processing equipment, because capital can be preserved for down payments on the property or other operating costs.
OPERATION UPGRADES Leasing offers an entry point for operations looking to update equipment or take advantage of new technology. This may include modernizing processing equipment to comply with new food safety regulations, or the purchase of a new custom harvester or other equipment to enhance productivity.
TAX ADVANTAGES Leasing may offer a faster write-off than owning the asset and taking depreciation. An example is when purchasing a general purpose farm building. Depreciation might be for as long as 20 years, whereas leasing can offer a shorter-term financing option, so the operation is able to accelerate the write-off. This allows the operation to offset their tax liability on an accelerated basis.
14
“Loan or lease, we have both options available, so it’s really just what makes sense for your operation and your particular situation,” said Scott. “A lease discussion typically makes the most sense when financing buildings since they have longer depreciation, and on specialty equipment. Traditional equipment can be leased through vendors, but the smaller companies with specialty equipment don’t typically have a financing arm, so Farm Credit Leasing can be a good fit.”
for more than 10 years,” said Mike. “In the Northeast, state incentive programs have really come a long way over the past several years, and our program has been growing along with it. The benefit to leasing through us is that you can monetize the value of tax benefits. Being that we are the tax owner, we pass the value of those tax benefits on to the borrower via a lower rate. We also work with a knowledgeable outside consultant who reviews the solar proposals.”
In addition to buildings and equipment, Farm Credit Leasing also offers solar financing options. “We’ve been leasing solar
If you’re interested in learning more about leasing, talk with your Farm Credit East relationship manager.
FINANCIAL PARTNER
2019
CANDIDATES FOR THE BOARD OF DIRECTORS On behalf of the nominating committee, Farm Credit East is pleased to present the 2019 candidates for the association’s Board of Directors. There are four open director seats to be elected for four-year terms, and seven qualified candidates seeking election to these seats.
EVERY VOTE
COUNTS! This is your opportunity to
• One from the Eastern Region
• One from the Eastern Region (Maine stockholder)
• One from the Central Region
• One from the Western Region
At the close of the current election cycle, the Farm Credit East Board will consist of 16 directors: 13 elected directors, one appointed customer director and two appointed outside directors.
The Board The Farm Credit East Board sets a clear direction for the cooperative on behalf of all customer-owners. The Board works closely with CEO Bill Lipinski to set policy, establish long-term business plans, evaluate business results and
express your voice in ownership
provide feedback to the management team. It does not make day-to-day manage-
and direction of the cooperative.
to employees.
ment decisions, including actions on individual loans or matters relating
By voting, you convey your
The Nominating Committee The nominating committee is composed of 23 Farm
continued commitment to
Credit East members and 23 alternates. The association membership elects the
Farm Credit East and thanks
hard to identify qualified candidates to ensure that the association attracts a skilled
to fellow members who are seeking election to the Board.
nominating committee at the annual stockholders meeting. This committee works and diverse Board. In addition, the committee makes every effort to recommend two qualified candidates for each open seat.
Election Process You’ll find the information you need to make an informed voting choice for the 2019 Farm Credit East Board of Directors, including:
The following overview
information is provided
received in the mail
by each candidate.
• This article’s profile of each candidate
• Information on our website at FarmCreditEast.com/DirectorElections
• An annual meeting information statement, which voting members
Ballots will be mailed to voting members after the annual meeting on March 29, 2019. Return ballots must be received by 5:00 p.m. on April 15. SPRING 2019
15
SEAT ONE
Nominated from the Eastern Region: Auburn, Bedford, Bridgeton, Dayville, Enfield, Flemington, Middleboro, Presque Isle and Riverhead offices. Two candidates are running for a four-year term.
KURT W. ALSTEDE
HENRY LYON HUNTINGTON
Alstede Farms, LLC 1 Alstede Farms Lane, P.O. Box 278 Chester, NJ 07930
Pleasant View Gardens, Inc. 7316 Pleasant Street Loudon, NH 03307
AlstedeFarms.com
pwpvg.com and lef-farms.com
Business Experience: Kurt is founder, owner and general manager
Business Experience: Henry is owner, partner and president/CEO
of Alstede Farms, LLC, a 600-acre vertically integrated fruit and
of Pleasant View Gardens, Inc., a 15-acre wholesale floriculture
vegetable farm. The farm includes extensive tree fruit, small fruit,
greenhouse business. Henry is also founder and owner/member
vegetables, ornamentals, a year-round retail store, processing,
of Proven Winners, LLC, a floriculture and consumer branding
pick-your-own and agritourism.
marketing company started in 1992, and founder and president/CEO of lef Farms Corp, a 1-acre Hydroponic grower of leafy baby greens
Leadership/Community experience: Kurt is member of Flemington’s
started in 2015.
Customer Service Council. He is on the County Tourism Bureau and appointed by the governor to the NJ Highlands Council
Leadership/Community experience: Henry is member of the Bedford
Regional Planning Authority, serving as vice chair. He is member
Customer Service Council and current Farm Credit East director,
of the NJ USDA Farm Service Agency State Committee, active
serving on the Audit Committee. Previously, Henry served as Board
in the Farm Bureau and County Board of Agriculture, and was a
vice chair as well as Audit Committee Chair and member of the
Chester Councilman, serving on the Open Space and Ag Advisory
Compensation Committee. Henry also serves on his local planning
committees. He is a life member of the Chester Volunteer Fire Co. #1,
board and is a director for Phenix Mutual Fire Insurance.
trustee in his church and president of the local cemetery association. been an important partner to my family in our farm business. Using
farmer, I believe that adequate access to capital, consulting and
good solid credit to help us grow our capital-intense business has
business services is critical to the future and long-term viability of
been critical to our success. I have always had a strong opinion that
our industry, and our farm business. The vitality of Farm Credit East
we need to give back to those that have supported us. This is my
is critical to fulfilling this need.
chance to do that.
Why I am seeking election to the Board: I have a passion for
Why I am seeking reelection to the Board: Completing my
Northeast agriculture combined with the desire to serve. I have
second term on the Farm Credit East Board has been a highlight
experience and expertise that would positively contribute to the
of my personal and professional life. I have seen firsthand what it
Farm Credit System’s mission and I would be an asset to the Board.
means to be a part of a cooperative. Solid member participation
I have a vision to build quality loan volume by continuing to serve
is a key element to remain strong and successful. I would like the
long-established farm businesses and beginning and young farmers,
opportunity to continue my service to our great organization.
as well as further engagement with mid-sized operations that may be transitioning into new commodities and niche agricultural opportunities.
16
Why Farm Credit is critical to my business: Farm Credit East has
Why Farm Credit is critical to my business: As a first-generation
FINANCIAL PARTNER
SEAT TWO
Nominated from the Eastern Region: Candidates must be from Maine. Two candidates are running for a four-year term.
THOMAS QUALEY
JAMES ALVIN ROBBINS II
Three Oak Farms 1088 Benedicta Road Sherman, Maine 04776
Robbins Lumber Inc. 53 Ghent Road Searsmont, Maine 04973 RLCO.com
Business Experience: Thomas is owner and partner of Three Oak
Business Experience: James is president of Robbins Lumber Inc.,
Farms, a 1,200-acre commercial farm operation producing 350-400
a fifth-generation, fully integrated sawmill that produces Eastern
acres of chipping potatoes and 500-800 acres of rotation crops,
White Pine lumber and manages 27,000 acres of timberland. James
including oats, barley, hay and wheat.
is also the manager of Georges River Energy, LLC, a biomass power plant that burns wood waste in order to produce electrical power.
Leadership/Community experience: Thomas is past president and director of the Maine Potato Board, member of the Agricultural
Leadership/Community experience: James previously served on
Bargaining Council and past director of Maine Potato Growers.
the Farm Credit East Board (2016-2018) and on the association
Thomas is also past member and chair of the United States Potato
nominating committee. He is past president of the Maine Wood
Board as well as having served as chair of its Finance Committee and
Products Association and a member of the Northeastern Lumber
co-chair of its Industry Communications and Policy Committee.
Manufacturers Association. James is also a Scout leader and is actively involved in his church.
Why Farm Credit is critical to my business: Farm Credit East supplies our company with a well-priced and convenient line of
Why Farm Credit is critical to my business: Farm Credit plays a
credit, which allows us to have the needed cash flow to remain
very important role as our lender and has been a key player in our
competitive in today’s economy. I feel that it is important to invest
success. Because of this key role, it is mutually beneficial to be
in Farm Credit East to ensure that other organizations have the
actively involved on the Board. I feel that Farm Credit East is so key
opportunity to receive the benefits that Farm Credit provides to
to our business that it is worth sacrificing time and energy to give
continue the stability of agriculture, forestry and aquaculture.
back to the Board.
Why I am seeking election to the Board: I am seeking election
Why I am seeking election to the Board: I believe that the Board
to the Board to assist in serving the cooperative and its members’
needs representation from a sawmill owner to enhance its diversity
various interests during the challenging business climate along
and represent the unique lending cycles of forest products. I bring
with succession and transition planning for future generations. My
experience from the forest products sector with log buying, lumber
experience serving on state and national boards has given me great
manufacturing, exporting and biomass generation. I believe I can
insight into the diverse challenges that affect individual areas and
give back to our institution by representing manufacturers and
industries, but also how we share the very same common goals
forest products businesses, which is an important sector of Farm
throughout the region.
Credit’s portfolio.
SPRING 2019
17
SEAT THREE
Nominated from the Central Region: Burrville, Claverack, Cooperstown, Greenwich, Middletown and Potsdam offices. One candidate is running for a four-year term.
LAURIE KEENE GRIFFEN Saratoga Sod Farm 1670 Route 4 Stillwater, NY 12170 SaratogaSod.com Business Experience: Laurie is co-owner and operator of Saratoga Sod Farm, a 700-acre turfgrass sod farm, also growing 500 acres of corn and soybeans. The operation also offers seed and fertilizer products, a sod installation service, and sells retail bagged garden soil in The Big Yellow Bag.
Leadership/Community experience: Laurie is a current Farm Credit East director, serving as the vice chair. She previously served on the Greenwich Customer Service Council and the nominating committee. She has been involved with Farm Bureau, Cooperative Extension, 4-H and Cornell Advisory Councils. Laurie is also a graduate of LEAD NY, serving on its Board of Directors and as president.
Why Farm Credit is critical to my business: “WE ARE YOU� speaks to the heart of Farm Credit East and its strong culture that enables employees to work with owner-borrowers through commodity cycles. This is critical to our business. From competitive financing and tax advice to consulting, appraisal and payroll services, Farm Credit has been there from the start. I want to ensure that Farm Credit is there to support others in the same way.
Why I am seeking reelection to the Board: My original goals of service and giving back to an organization important to me, my business and Northeast agriculture, remain as important as when I first sought election. However, I now seek election as a more experienced and tenured Board Member. I understand the time, energy and commitment necessary to learn the depth and complexity of our association. I would like the opportunity to continue to help lead our association into the future.
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FINANCIAL PARTNER
SEAT FOUR
Nominated from the Western Region: Batavia, Cortland, Geneva, Hornell and Mayville offices. Two candidates are running for a four-year term.
PETER R. CALL
DAVID M. VOTYPKA
My-T Acres, Inc. 8127 Lewiston Road Batavia, NY 14020
Votypka Farms 8663 Strutt Street Wayland, NY 14572
Business Experience: Peter is president of My-T Acres, Inc., an
Business Experience: David is owner of Votypka Farms, a second-
8,500-acre farm operating in Genesee, Orleans and Livingston
generation, 650-acre crop farm growing winter wheat, soybeans, and
counties. Crops include peas, snap beans, carrots, cabbage and
snap beans and peas for processing. David also runs Springwater Ag
red beets for canning and freezing, sweet corn for fresh market,
Products, which sells crop protection materials including SeedWay®
and potatoes for chips. The farm also grows corn, wheat, rye, oats
and NK® products.
and alfalfa.
Leadership/Community experience: David is member of the Hornell
Leadership/Community experience: Peter is a current Farm Credit
Customer Service Council. He has served on the Cornell University
East director, serving as the Governance Committee chair and on the
Alumni Board, the Upstate Potato Board and the IPM Vegetable
Compensation and Executive committees. He is a graduate of The
Research Committee. He is past president of his local Lions Club
Executive Program for Agricultural Producers (TEPAP) and LEAD
and member of the Board of Assessment Review for the town of
NY Class III. Peter is also a director of Seneca Foods and Farm Fresh
Springwater, NY. He is also member of Farm Bureau and Cornell
First, as well as a trustee of Genesee Community College.
Cooperative Extension.
Why Farm Credit is critical to my business: Our farm has been a
Why Farm Credit is critical to my business: Farm Credit has a long,
Farm Credit member for more than 50 years. Their agricultural
strong history with our family farm. Without Farm Credit’s help and
expertise, willingness to work with us during difficult periods as
services, I would not be vying to be a Board member today. I want to
well as supporting us in new investments, has been a very important
help a system that has made it possible for us to successfully farm for
part of our farm business.
72 years. I have a long-time dedicated employee and my fiancée does all of the office work, including deliveries. These all allow me the
Why I am seeking reelection to the Board: My one term as a
time to do the best possible job as a director.
director has given me a greater understanding of just how important Board governance and leadership are to the success and future of
Why I am seeking election to the Board: I have always been
Farm Credit East. I believe that my Board experience and history
interested in the Board of Directors since my father served for 19
of working in agriculture make me a qualified candidate who
years in the ‘70s and ‘80s. I’ve been intrigued with the process and
can best represent our constituents’ needs. I think this is a great
would like to learn about it. I have served as a board member for
responsibility, which I take very seriously.
multiple organizations and enjoy the responsibilities. I could add insight from my experiences and gain knowledge at the same time.
SPRING 2019
19
FINANCIAL PARTNER is for the customers, employees and friends of Farm Credit East. Farm Credit East is a customerowned lending cooperative serving the farm, commercial fishing and forest products businesses in Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York and New Jersey. Part of the national Farm Credit System, Farm Credit East is a full-service lender dedicated to the growth and prosperity of agriculture.
Farm Credit East 240 South Road Enfield, CT 06082-4451 Address Service Requested
HOW TO REACH US: Whether you want to praise us, complain, ask our advice or just let us know what’s on your mind, we’d like to hear from you. WRITE: K ristie Matuszewski, Editor, Farm Credit East, 240 South Road, Enfield, CT 06082-4451 CALL: 860.741.4380 E-MAIL: kristie.matuszewski@farmcrediteast.com ©2019 by Farm Credit East, ACA. All rights reserved. Farm Credit East is an affirmative action, equal opportunity employer. FINANCIAL PARTNER is printed on recycled paper.
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