spotlight
Fall 2014
MEET OUR SCHOLARSHIP RECIPIENTS PAGE 4
ELECTION RESULTS Page 5
FARM CREDIT HISTORY Page 7
spotlight WHO WE ARE One of California’s leading agricultural lenders, Farm Credit West is a cooperatively-owned lending institution providing financial services to farmers, ranchers, wineries and agribusinesses with offices located in the California Central Coast, Southern San Joaquin Valley and Sacramento Valley.
SPOTLIGHT is produced for the customers, employees and friends of Farm Credit West. Comments and story ideas can be submitted to the Marketing Department, Farm Credit West, 1478 Stone Point Drive, Suite 450, Roseville, CA 95661.
TA B L E O F C O N T E N T S President’s Message. . .................................... 3 2014 Scholarship Recipients.............................. 4 Board of Directors and Nominating Committee Election Results ........................ 5 Financial Highlights....................................... 6 Farm Credit History....................................... 7 Community Center.. .................................. 8 – 9 •
Honorary FFA Chapter Degree
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Kern Nut Festival
BOARD OF DIRECTORS
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Farm Credit West’s 25 th Anniversary FFA Project Competition
Blake Harlan, Chairman of the Board .........................Woodland, CA
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Let’s BBQ! FFA State Judging Finals
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4 th Annual Pinot & Pints Fundraiser
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California State Holstein Show
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Tulare County Farm Bureau President
Joey Airoso, Vice Chairman of the Board ...........................Pixley, CA Robert Amarel, Jr. ........................................................Yuba City, CA Alben F. Barkley ..............................................................Oxnard, CA
A Lender’s Dream.........................................10
Gregory O. (Butch) Dias, Jr. .............................................Visalia, CA
Territory and Office Locations....................... 11
Richard J. Enns ..........................................................Bakersfield, CA Douglas C. Filipponi ......................................................Creston, CA Adam B. Firestone .........................................................Buellton, CA Craig C. Gnos ....................................................................Davis, CA Robert N. Hansen ......................................................... Hanford, CA Thomas R. Heenan ......................................................Yuba City, CA
Mission Statement Farm Credit West will ensure THE CUSTOMER COMES FIRST by providing superior service
Barry Powell .............................................................Sacramento, CA
at competitive rates, in a timely, professional
Edgar Terry .....................................................................Ventura, CA
and ethical manner.
Sureena B. Thiara ........................................................Yuba City, CA Cornelius (Case) Van Wingerden .................................Carpinteria, CA
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Fall 2014
PRESIDENT’S MESSAGE Mark Littlefield, CEO
Trusted Trust is the cornerstone of business, of relationships and of life. Trust is a core element of a respected person and a successful company. At Farm Credit West we strive to earn your trust by listening to your needs, delivering high quality products, being good stewards of the equity that we manage, and providing exceptional customer service. Listening is a key element of trust and the first step we employ at Farm Credit West to earn your trust. If we do not listen to you, our customers, we cannot begin to understand your needs and provide you with high quality products. As our customers, you can trust that your voice is important, that we value your feedback, and that Farm Credit West is committed to responding to your needs. In an effort to ensure that the trust we have earned is maintained, we seek feedback from you through the customer survey. The questions in the survey are designed to allow us to understand and address your needs and to ensure that the products and services we offer meet them. Secondly, we strive to earn your trust by delivering high quality products that will help you be successful. At Farm Credit West we do not just strive to deliver a product, we strive to deliver the highest quality product possible. We work tirelessly to ensure that this is not just a slogan. Farm Credit West is committed to delivering high quality products by providing: • Superior products at competitive rates • Knowledgeable and engaged staff that strive to understand your unique business, financial situation, and f luctuations in your marketplace
• A valued resource to help you grow and transition your business to the next generation Thirdly, Farm Credit West earns your trust by being a good steward of the equity that we are charged with managing. As a cooperative lender, it is vital that we make responsible decisions regarding your equity. To ensure that Farm Credit West remains profitable, we must preserve capital, continue growing our business, and provide competitive rates and patronage payments to you, our customer-owners. We know that in order to be trusted with your equity we must continue to add value to your relationship as a stockholder. In 2013 we returned $53 million in patronage to you, our customer-owners, roughly equivalent to 0.75% of your average loan balances. Finally, at Farm Credit West, our mission is “THE CUSTOMER COMES FIRST.” Fulfilling our mission requires that we continue to meet your expectation of exceptional customer service. We are an organization that strives to enhance the overall customer experience. We work every day to be a trusted partner and resource in your business. Your kind words of support through our surveys validate that you trust us and that we are meeting our value proposition of “Superior Service at Competitive Rates.” In fact, when we ask, “How would you rate the overall service you recently received at Farm Credit West?” 94% of you, our customers, rated us as “excellent” in overall service with another 4% rating our performance as “very good.” Additionally, 98% of you stated that you would recommend Farm Credit West to others. Please know that we will continue to strive for 100% satisfaction. In closing, earning and keeping your trust is essential to the ongoing success of Farm Credit West. We are committed to improving every day to help you reach your goals. We will continue to provide you with the opportunities, resources and tools you need to be successful. We know that as long as we continue to put our valued customers first, you will continue to place your trust in us.
• Timely and professional service to meet your financial needs
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spotlight Congratulations to our 2014 Scholarship Recipients Farm Credit West congratulates our eight scholarship winners, all aspiring to make a difference in their agricultural communities. Each student earned $1,500 toward higher education. Each school year Farm Credit West awards scholarships to qualified applicants. This past year the Board approved a $500 increase in the scholarship amount, giving $1,500 to each recipient. Over the last twenty years Farm Credit West has awarded over $615,000 in scholarships.
Meet Our Scholars: Jason Couto Jr. Riverdale, CA West Hills College, Lemoore Major: Ag Business
Emma Larson Hanford, CA Cal Poly, SLO Major: Ag Communications
Previous scholarship recipients that continue to maintain academic excellence are eligible to renew their scholarship for up to three years after their initial award. This year’s students renewing their scholarships will also receive an increase to their scholarship amount, receiving $1,500 each.
Students renewing their scholarship include: Bridget Adam, Santa Maria, CA Justin Adam, Santa Maria, CA Maggie Boneso, San Miguel, CA Aaron Brown, Hanford, CA
Garrison Fernandes Tipton, CA Cal Poly, SLO Major: Ag Engineering
Tristan Rollin Riverdale, CA Purdue University Major: Ag Engineering
Gavin Chohan, Yuba City, CA Ethan Driver, Knights Landing, CA Kristen Droogh, Lemoore, CA Austin Fernandes, Tulare, CA Lauren Friend, Tulare, CA
Foster Hengst Woodlake, CA College of Sequoias Major: Plant Science
Kavin Sihota Selma, CA Fresno State University Major: Viticulture Enology
Alyssa Galhano, Visalia, CA Matthew Geis, Bakersfield, CA Mitchell Harry, Elk Grove, CA Mazie Jameson, Visalia, CA Audra Jones, Orland, CA
Hattie Jameson Visalia, CA Cal Poly, SLO Major: Ag Science
Elizabeth Talley Arroyo Grande, CA Cal Poly, SLO Major: Ag Communications
Thomas Larson, Hanford, CA Cole Martin, Tulare, CA Elizabeth Parsons, Bakersfield, CA Rumyn Purewal, Yuba City, CA Garrett Rasmussen, Dixon, CA Rajvir Sohal, Yuba City, CA
Scholarship Program Update Applications for the 2015 – 2016 school year are due February 15th, 2015. Candidates will be notified in April if they have received an award (all awards are contingent upon final transcripts). For more information about the Farm Credit West scholarship program please visit www.farmcreditwest.com or talk to your loan officer. Scholarship information can be found under Community Support on our website.
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Theresa Sweeney, Visalia, CA Kaitlin Swickard, Susanville, CA Navreen Thandi, Clovis, CA Erin VanGrouw, Visalia, CA Hannah Wilson, Clarksburg, CA Madeline Wisecarver, Hanford, CA
Fall 2014
Board of Directors and Nominating Committee Election Results Directors Elected to an Additional Term: Congratulations to Edgar Terry, Craig Gnos, and Gregory O. “Butch” Dias, Jr. who were recently re-elected to serve on the Farm Credit West Board of Directors.
Gregory O. “Butch” Dias, Jr.: Butch Dias co-manages a dairy and farming operation with his two sons. He is a past chairman of the California Milk Advisory Board and has served on that board for the past five years. Butch is looking forward to focusing on the diversity of agriculture and its ability to weather the Ag cycles over time.
The Farm Credit West Board of Directors is made up of 13 stockholder-elected directors and two appointed directors. Farm Credit West Board members are the governing voice of the Association, acting to represent the best interests of the Association’s shareholders. Farm Credit West Board members regularly participate in director development programs and trainings in addition to attending scheduled board and committee meetings throughout the year. Much of Farm Credit West’s success is attributable to the contributions of the many customers who have served as directors over the years and we extend our utmost appreciation to each of them for their leadership, insight, and many years of dedicated service.
Edgar Terry
Craig Gnos
Edgar Terry: Edgar Terry is a manager of a fourth generation family farm in Ventura, California, where he farms approximately 2,000 acres of strawberries and vegetables with his family. Terry is looking forward to representing the interests of growers and producers during his term on the board. Craig Gnos: Craig Gnos is a full time farmer who has been working with his father for the last 23 years. He is a partner in E&H Farms and an owner of Batavia Farms, growing vegetables and row crops. Craig is looking forward to giving back to the Farm Credit System as it is a vital service to the agricultural community.
Gregory O. “Butch” Dias, Jr.
Members elected to the 2015 Nominating Committee: Robert L. “Roy” Gill, Jon Cagliero, Lynette Filter, Danny Newton, Craig Reade, and Michael Dias. Members elected as alternates for 2015 Nominating Committee: Kulwant Johl, Les Graulich, Wayne Allen, Jared Fernandes, Janis Berk, and Julien Parsons. Those who participated in the election process play an important role in Farm Credit West’s success. We would like to convey our most sincere appreciation to those who agreed to serve as Board of Director candidates, Nominating Committee members, Nominating Committee candidates and to all those stockholders who cast their ballots.
2 0 1 4 H O L I D AY S C H E D U L E Columbus Day , Monday, October 13 Veterans Day , Tuesday, November 11 Thanksgiving Day , Thursday, November 27 Christmas Day , Thursday, December 25
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spotlight spotlight spotlight spotlight spotlight Financial Highlights Financial Highlights Financial Highlights Financial Highlights Financial Highlights
Farm West reported net income ofincome $83 of million formillion the Farm Credit West reported of $83 FarmCredit Credit West reported net net income $83 million Farm Credit West reported net income of $83 million first half of 2014. These year-to-date earnings were ahead of our Farm Credit West reported net income of $83 million for first the first of 2014. These year-to-date for the half half of 2014. These year-to-date for the first half of 2014. These year-to-date for the first half of 2014. These year-to-date business plan targets. Also during the first six months of 2014, earnings were ahead of our business plan targets. earnings were ahead of our business plan targets. earnings were ahead of our business targets. earnings were ahead of our business plan targets. our average earning assets and capital levels increased while our Also during the first six months ofplan 2014, our average Also during the first six months of 2014, our average Also during the first six months of 2014, our average Also during the first six months of 2014, our average earning assets and capital levels increased while allowance for loan losses remained consistent. earning assets and capital levels increased while ourour earning assets and capital levels increased while ourour earning assets and capital levels increased while allowance for loan losses remained consistent. allowance for loan losses remained consistent. allowance for loan losses remained consistent. allowance for_______________________________ loan losses remained consistent. _______________________________ _______________________________ _______________________________
Average Earning Assets Average Earning Assets
Average EAssets arning Amillions) ssets Average Earning Assets Average Earning (in
(in millions) (in millions) (in millions) (in millions)
$5,991 $5,991 $5,991 $5,991 $5,737 $5,726 $5,737 $5,726 $5,737 $5,726 $5,737 $5,726
$6,323 $6,323 $6,323 $6,323
$6,577 $6,577 $6,577 $6,577
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Jun. 30, 31,Dec. 3Dec. 31,Dec. Dec. Dec. 3Dec. 1,2010 1, 32012 1, 31, Dec. Dec. 32013 1, 31, Jun. Jun. 30, 30, 2011 Dec. 31, Dec. 31, Dec. 31, Dec. 31, Jun. 32014 0, 2014 2010 2010 2011 2011 20122012 20132013 2014 2010 2011 2012 2013 2014
Average earning assets grew $254 million, or 4%, Average earning assets grew $254 million, or 4%, during the first Average earning assets grew million, or 4%, Average earning assets grew $254 million, or 4%, during the first six months of $254 the year. The increase Average earning assets grew $254 million, or 4%, six months of the year. The increase was due primarily to higher during the first six months of the year. The increase during the first six months months of the theyear-to-date year. The The average increase wasthe due primarily to higher during first six of year. increase was due primarily to loan higher year-to-date average year-to-date average realto estate volume. loan volume. was real due estate primarily higher year-to-date average was due primarily to higher year-to-date average real estate loan volume. _______________________________ real estate estate loan volume. real loan volume. _______________________________ _______________________________
Members’ Equity Members’ Equity aas s aa % % o of f TTotal otal AAssets ssets Members’ Equity as aas a%a % o% f oTof AAssets ssets Members’ Equity f otal TTotal otal A ssets Members’ Equity as 15.6% 15.6% 15.6% 15.6%
17.7% 17.7% 17.7% 17.7%
18.1% 18.1% 18.1% 18.1%
19.9% 19.9% 19.9% 19.9%
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,31, Dec. 31, Dec. 31, Dec. 31, Dec. Dec. Dec. Dec. 2011 2012 2013 Dec. 32010 1, Dec. 31,31, Dec. 31,31, Dec. 31,31, 2010 2011 2012 2013 2010 2011 2012 2013 2010 2011 2012 2013
21.2% 21.2% 21.2% 21.2%
Jun. 30, Jun. 330, Jun. 0, 2014 Jun. 30, 2014 2014 2014
In of of thethe year, totaltotal members’ equityequity increased Inthe thefirst firsthalf half year, members’ In$109 the first half of the year, total members’ equity In the first half of the year, total members’ equity million, orof 8%, primarily duemembers’ to the netdue income of $83 increased $109 million, ortotal 8%, primarily to the In the first half the year, equity increased $109 million, or 8%, primarily due the increased $109 million, or 8%, primarily due to the million and anofincrease inor the preferred stockdue balance of $29 net income $83 million and an increase in the increased $109 million, 8%, primarily toto the net income ofof $83 million and an increase the net income $83 million and an increase inthe the were preferred stock balance of $29 million. net income of $83 million and an increase inin million. Partially offsetting net income duringPartially the year preferred stock balance of $29 million. Partially preferred stock balance of $29 million. Partially offsetting net dividends income during the year were preferred preferred stock balance of $29million. million. Partially preferred stock of $3 offsetting net income during the year were preferred offsetting net income during theyear yearwere werepreferred preferred stock dividends of $3 million. offsetting net income during the stock dividends $3$3 million. stock dividends million. _______________________________ stock dividends ofofof $3 million. _______________________________ _______________________________ _______________________________
Allowance for for Loan Losses as aa %% oof f LLoan oans Allowance LoanLosses Lossesaas Allowance f or L oan s a % o f L oans Allowance f or L oan L osses a s a % o f L oans Allowance for Loan Losses as a % of Loans 0.44% 0.44% 0.44% 0.44%
0.52% 0.52% 0.52% 0.52%
0.54% 0.54% 0.54% 0.54%
0.54% 0.54% 0.54% 0.54%
0.53% 0.53% 0.53% 0.53%
_______________________________
Nonearning Assets
Nonearning Assets Nonearning Assets (in millions) Nonearning ssets Nonearning AAssets
(in millions) $191 (in millions) $187 (in m illions) $191 (in millions) $187 $191 $187 $191 $187
$156 $156 $156 $156
$96 $96 $96 $96
$116 $116 $116 $116
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Jun. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Jun. 30, 2010 2011 2012 2013 2014 2011 Dec. 2012 2013 Dec. 331, 1,2010 Dec. Dec. 331, 1, Dec. 331, 1, Dec. 331, 1, Jun. 332014 Dec. Dec. Jun. 0,0, 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Nonearning assets (nonaccrual loan plus other Nonearning assetsincreased (nonaccrual loanmillion plus other property owned) byother $20 or 21% to Nonearning assets (nonaccrual loan plus property property owned) increased by $20 million or 21% to Nonearning assets (nonaccrual loan plus otherowned) Nonearning assetsat(nonaccrual loan plus other $116 million June 30, 2014. The increase was increased by owned) $20 million or 21% toby $116 million at June 30, to $116 million at June 2014. The increase was increased $20 million or 21% primary due to a $2030, million increase inor nonaccrual property owned) increased by $20 million 21% to 2014. increase was primarily due to increase a $20 million increase primary due toThe a30, $20 million in was nonaccrual million at June June 30, 2014. The increase was loan volume. other property owned balance $116The million at 2014. The increase inprimary nonaccrual loan volume. The other propertyowned owned balance loandue volume. Themillion other property balance due toessentially $20 million increase in nonaccrual remained unchanged. to aa $20 increase in nonaccrual essentially unchanged. remained essentially unchanged. loan remained volume. The other property owned balance volume. The other property owned balance remained essentially essentially unchanged. unchanged. remained
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Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2010 2011 2012 2013 Dec. 3 1, Dec. 3 1, Dec. 3 1, Dec. 31, Dec. 32010 1, Dec. 2011 31, Dec. 2012 31, Dec. 2013 31, 2010 2011 2012 2013 2010 2011 2012 2013
Jun. 30, Jun. 30, 2014 Jun. 30, Jun. 30, 2014 2014 2014
Our allowance for loan losses totaled $35 million Our forprincipal loan losses totaled $35 million (0.53% Ourallowance allowance for loan losses totaled $35June million (0.53% of loan and interest) at 30, Our allowance for loan losses totaled $35 million Our allowance for loan losses totaled $35 million of2014, loan principal and interest) at June 30, 2014, compared (0.53% of loan principal and interest) at June 30, compared with 0.54% of loan principal and (0.53% of loan principal andand interest) atatJune June 30, (0.53% of loan and interest) at 30, 2014, compared with 0.54% of interest loan and with 0.54% of principal loan principal December 31, interest at December 31, 2013. The principal allowance is our 2014, compared with 0.54% of loan principal and interest at December 31, 2013. The allowance is our 2014, compared with 0.54% of loan principal and 2013. The allowance is our best estimate of the amount of best estimate of the amount of probable losses interest December 31, 2013.ofas The allowance our best estimate ofloan the31, amount probable losses interest atatlosses December The isisour existing in our portfolio of allowance each balance probable existing in 2013. our loan portfolio as of each balance best estimate of the amount ofprobable losses existing inWe our loan portfolio asprobable of each balance best estimate of the amount of losses sheet date. We determine the allowance based on a sheet date. determine the allowance based on a regular existing in our loan portfolio as of each balance sheet date. We determine the allowance based on a existing in our loan portfolio as of each balance regular evaluation the loanwhich portfolio, which evaluation of the loanofportfolio, generally considers sheet date. Wedetermine determine the allowance basedon ona a regular evaluation ofrecent the the loan portfolio, which sheet date. We allowance based generally considers historic charge-off recent historic charge-off andcharge-off is adjusted regular evaluation theexperience loan portfolio, which for other generally considers recent historic regular evaluation ofofadjusted the loan portfolio, which experience and is for other relevant relevant economic experience and isfactors. adjusted for other relevant generally considers recenthistoric historic charge-off generally considers recent charge-off economic factors. economic factors. experience and is adjusted for other relevant experience and is adjusted for other relevant
economicfactors. factors. economic
Fall 2014
Farm Credit History: Embodying the Cooperative Ideal by Jim Putnam In 1913, President Woodrow Wilson pledged to help farmers obtain credit not available from commercial banks – banks that couldn’t support farmers and ranchers through the ups and downs of agriculture. Detractors claimed that putting the government behind agricultural credit would give undue advantage to farmers. Wilson disagreed. “The farmers, of course, ask for and should be given no special privilege,” he said. “What they need and should obtain is legislation which will make their own abundant and substantial credit resources available as a foundation for joint, concerted local action.” The Farm Credit System created three years later was the first organization to later bear the designation of a GovernmentSponsored Enterprise (GSE), a term not then in use; the System as implemented was also the first federally-sanctioned cooperative credit association, instituting a groundbreaking approach to providing support for the nation’s farmers and ranchers when they needed it most.
The cooperative ideal – that private citizens working together democratically could do things that the free market could not – was a century in the making by the Progressive Era, a period of reform spanning from 1890 to 1920. Marked by an economy that brought great wealth and great poverty, many reaped economic rewards while others were excluded in the free market. Progressives called on the government to allow cooperatives to meet needs unfilled by the marketplace. In 1887, L. L. Polk, founding editor of the Progressive Farmer, declared that “co-operation, organization, consolidation are the watch-words of the hour.” The prolific agriculture publisher and editor Herbert Myrick tirelessly promoted the cooperative ideal as a solution to credit problems among farmers. Although the 1916 Federal Farm Loan Act itself did not specify that the Farm Credit System would be cooperatively rather than investor-owned, the System was implemented as a cooperative, and Myrick was later honored by receiving one of the two pens President Wilson used to sign the 1916 Act. But would the System created in an era of cooperative enthusiasm endure? The first test came in 1920. In Smith v. Kansas City Title and Trust Co., early opponents of the Farm Credit System held that the Constitution did not allow Congress to approve the issuance of tax exempt bonds – for farm loans or for anything else. Litigation halted lending activities for nearly a year, but in February 1921, the Supreme Court, then generally accepting of the extension of federal power to the benefit of the citizenry, upheld the constitutionality of the Federal Farm Loan Act.
Top: Excerpt of the minutes of the first board meeting in 1917 for the East Side Paso Robles National Farm Loan Association. Above: East Side Paso Robles National Farm Loan Association, Record book of board meeting minutes beginning in 1917.
Another major test on the System immediately followed. The Great Depression could have destroyed Farm Credit, but instead, the government, System leaders, and borrower-owners strengthened it, reorganizing the System while maintaining its democratic, cooperative foundations and its GSE status. Continued on page 10
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spotlight Community Center
Farm Credit West Receives Honorary FFA Chapter Degree
Pictured with the Pioneer FFA Chapter Officers, Anna Fricke receives the Honorary FFA Chapter Degree on behalf of FCW.
In May, Pioneer High School in Woodland presented Farm Credit West with an Honorary FFA Chapter Degree. This award is given to individuals and companies who have truly made a difference in educating the community about agriculture, as well as providing continued support of FFA. Farm Credit West has been supporting Pioneer High School and their FFA program since the school was founded in 2002. Local Farm Credit West employee Anna Fricke stated, “Farm Credit West has put a lot of time and effort into supporting FFA chapters by purchasing animals, staffing and underwriting the Yolo County Fair Livestock Auction. We support Pioneer FFA fundraisers by purchasing tickets and providing raffle prizes, but it’s the youths’ commitment to agriculture that really motivates us to support their success.”
Farm Credit West was the presenting sponsor of the Fresno Grizzlies’ Farm Grown game night and post-game fireworks show in May. Twelve-year-old Hunter Seymore of Visalia is pictured here throwing the first pitch. Hunter described this experience saying, “It was the best night in my life.”
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Kern Nut Festival The Second Annual Kern County Nut Festival took place Saturday, June 7th, at the Kern County Museum. Kern County is the top nut producing county in the nation, so a nut FCW employees Cheryl Mendoza, Mary festival that celebrates Martinez and Melinda Mello, volunteering nutrition and nut in the California Women for Ag booth. cuisine is bound to be a success. This year the festival had approximately 7,500 attendees, up from about 5,500 the year before. The festival featured many events including cooking demonstrations, nutty concoctions, music, dancing, crafts, agricultural exhibits, games, health information and contests. Farm Credit West and CoBank sponsored the event, helping benefit the Kern County Museum’s Educational Programs, as well as other non-profits.
Farm Credit West’s 25 th Anniversary FFA Project Competition Farm Credit West has provided judging for the Northern Santa Barbara FFA Sectional Project Competition since 1990. Over those years Farm Credit West has donated almost $20,000 in banquet funds, certificates and awards. Farm Credit West FCW Portfolio Manager Tom Gulliver listens volunteers over 150 hours to FFA participant talk about his project. annually and travels many miles visiting the eight different FFA programs within the Section. Tom Gulliver, who has judged all 25 years, said, “We have seen some very interesting projects and most importantly watched the growth of some of the best youth these communities have produced.” Farm Credit West would like to thank all the judges that have provided not only their expertise and time, but the mentorship they have given to the FFA competitors over the years.
Fall 2014
Community Center
Let’s BBQ! FFA State Judging Finals The BBQ started over 30 years ago when Farm Credit West, San Luis Obispo Farm Bureau, J.B. Dewar Petroleum, and Farm Supply sponsored the first BBQ. Jim Brabeck from Farm Supply and Jack Dewar Hayley Loehr, FCW Templeton Branch, and from J.B. Dewar had Wayne Elias, FCW Santa Maria Branch, noticed that the State trim tri-tip for the State FFA Finals BBQ. Finals participants had to go to downtown San Luis Obispo to get lunch. Since it was too far to walk, many did not eat. Jim and Jack approached Farm Credit West and the San Luis Obispo Farm Bureau to help them sponsor a lunch for the FFA participants. Farm Credit West has continued to contribute both financially and with man power over the years and is now the major sponsor of the event. Many of those who volunteered from Farm Credit West have been involved in FFA since their youth. John Boyes from Farm Credit West said, “It is refreshing to see each new class of participants use the FFA experience to enhance their lives and the communities around them.” Many of the FFA instructors attended the BBQ as students and are now back providing leadership for their schools. FFA programs are hurting for money in California and any help is appreciated. In some cases students would not be able to participate in the event if it wasn’t for Farm Credit West and the BBQ that was started so many years ago.
4th Annual Pinot & Pints Fundraiser
Kevin Layne, FCW Dinuba Branch, showcases the award-winning Jalapeno Duck Poppers.
On Saturday May 3rd the Dinuba Branch of Farm Credit West participated in the 4th Annual Pinot & Pints Fundraiser hosted by the Reedley College Ag Backers Council. Proceeds from the event go toward providing scholarships and work study employment opportunities for students studying Agriculture or Natural Resources at Reedley
College. This represents the fourth year of involvement for Farm Credit West. Table sponsors pour either wine or beer for tasting and participate in competitions for “Best Appetizer” and “Best Decorated Booth.” For the second year in a row, Farm Credit West won “Best Appetizer” with its Jalapeno Duck Poppers and served refreshing pints of Firestone Walker beers, owned by Farm Credit West Board Member Adam Firestone and co-owner David Walker. Farm Credit West employees who participated include Don O’Dell, Ken Tatami, Kevin Layne, and Mary Tatami.
California State Holstein Show The 50th Annual CA State Holstein Show was held in Turlock, CA at the Turlock Fairgrounds on April 24th and 25th. The Farm Credit Alliance sponsored a $1,000 cash award From left to right: Dominique Germann (District 6 Dairy Princess), Lauren Evangelo (FCW Employee), to the CA State Joey Airoso, and Caitlin Lopes (District 61st Futurity Show Alternate Dairy Princess) Winner. What is the futurity? This prestigious event showcases the accomplishments of breeders across the state, selecting the best three year old cow from the females that were nominated by breeders when they were young calves. The winning entry of the 2014 Futurity was AIROSA JEEVES 14414. This cow is owned and bred by Joey Airoso, a member of the Farm Credit West Board.
Joey Airoso Elected as Tulare County Farm Bureau President Joey Airoso was recently elected President of the Tulare County Farm Bureau Board. Airoso is a Tulare County native, born and raised. His family has been dairying in the county for over 100 years. Along with his father Joe, son Joseph, and wife Laurie, Airoso manages two dairy farms near Pixley, milking over 2,000 cows. “Working together and building a louder voice will be my mission for the next two years as president,” says Airoso. “We have many issues to deal with on behalf of all Tulare County farmers and water is at the top of the list right now.”
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spotlight A Lender’s Dream Dr. David M. Kohl Professor Emeritus, Virginia Tech
At a recent weeklong ag lending school, an excellent producer panel discussed how they were planning to navigate the economic white waters that appear to be emerging. After listening to the panelists, the lenders debriefed by discussing how the producer panelists manage their businesses both in the short and the long run. I heard one of the lenders say that the panelists were a “lender’s dream!” The lender’s dream began when one young panelist under 40 years of age indicated that he not only prepares his own balance sheets and accrual adjusted income statements, but also generates projected cash flow statements. He has developed a dashboard of approximately seven key financial ratios and benchmarks his family business uses to look at trends in their business metrics and compare their business to peer businesses on state and national farm record database summaries. He then stated that he monitors his cash flow quarterly by comparing the projected cash flow to the actual results, both on the revenue and the cost side. He stated that he was so glad that he had forward priced his crops for multiple years to not only lock in a profit, but also meet his debt service requirements. Another key in being a lender’s dream was that he meets quarterly with his advisory team, which includes a retired extension agent, crop and livestock consultants, as well as his lender. Another panelist in the question-and-answer discussion indicated that he had a formal written transition plan. Yes, that includes an estate plan but also a formal transition pathway for bringing the younger generation and outside family business members into the business, and how the older generation would phase out. He and his spouse shared that it required a significant time investment of two years to complete the process, but it was a worthwhile allocation of time and money to ensure the success of the business and that the legacy was carried on. He had an interesting quote: “What is the cost of NOT doing something?”
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All producer panelists were strong advocates of disciplined growth and ample liquidity thru working capital, with a focus on cash reserves. One young panelist took a pass on rented ground this past spring when the bidding war got out of hand. Knowing his cost of production and margin scenarios in the planning process circumvented a potential big loss as commodity prices have now headed south. He stated that he was able to secure a custom harvesting contract on the same ground from the farm that had rented it, and that his profit margin in this diversified custom harvesting business was still strong. Additional attributes that impressed the lenders were the proactive decision making and the panelists’ passion for agriculture overall. All of the panelists embrace technology, but they only felt innovation, with or without technology, was a competitive edge in the balance between business and lifestyle. The panelists were advocates of education and training. The proof was in the pudding when the panelists came early to the school to listen to the educators lecture on financial analysis trends impacting agriculture. Yes, they are lifelong learners. How do you stack up to these panelists who were considered a lender’s dream? The bigger question is, what will you do to improve, execute, and follow through on management of your business?
Farm Credit History continued from page 7 Perhaps the greatest challenge came during the agricultural crisis of the 1980s. But as a Farm Credit Administration official stated, “foreclosure should be a last resort for any commercial lender, but particularly for a cooperative lender that is owned by its borrowerowners.” Leaders and borrower-owners rallied to defend the System – and the government listened. President Ronald Reagan declared the 1980s legislation “ensures that the Farm Credit System will continue as a principal source of private credit to America’s farmers.” As an embodiment of the cooperative ideal, Farm Credit has met the needs of American agriculture for nearly a century. That it has survived and grown stronger over the nearly 100 years it has served U.S. agriculture suggests that the System’s cooperative structure will enable it to continue to serve American farmers long into the future.
Fall 2014
Territory and Office Locations
Administrative Office 1478 Stone Point Drive Suite 450 Roseville, CA 95661 916.780.1166 Capital Markets 1446 Spring Street Paso Robles, CA 93446 805.237.0998
Yuba City
Carpinteria
Woodland
1135 Eugenia Place, Suite A Carpinteria, CA 93013 805.684.8771
ÂŤRoseville
Farm Credit West ACA Main Office
Dinuba 531 N. Alta Avenue Dinuba, CA 93618 559.591.9378
Hanford
Hanford
Dinuba Tulare
1111 W. Lacey Boulevard Hanford, CA 93230 559.584.2681
Capital Markets Templeton Bakersfield Santa Maria
Kern County
Carpinteria Ventura
19628 Industry Parkway Drive Bakersfield, CA 93308 661.399.7360 Santa Maria
Ventura
1178 Tama Lane Santa Maria, CA 93455 805.922.7991
2031 Knoll Drive Ventura, CA 93003 805.477.1020
Templeton
Woodland
175 Cow Meadow Place Paso Robles, CA 93446 805.434.3665
440 Pioneer Avenue Woodland, CA 95776 530.666.3333
Tulare
Yuba City
200 E. Cartmill Avenue Tulare, CA 93274 559.684.1478
900 Tharp Road Yuba City, CA 95993 530.671.1420
Territory and Office Locations
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1478 Stone Point Drive Suite 450 Roseville, CA 95661
Stewards of the Land. And the Water. Drill a new well. Repair an existing one. Improve your irrigation system. FARM CREDIT WEST IRRIGATION STEWARDSHIP LOAN PROGRAM • Flexible terms • Low interest rates • No loan origination fees Contact your local Farm Credit West branch for details.
800-909-5050 • www.farmcreditwest.com