spotlight FALL 2017
COMMITMENT TO SERVE DEAN OWEN, ON THE RANCH AND IN THE AIR Page 6
2017 DIRECTOR AND NOMINATING COMMITTEE ELECTION RESULTS Page 5
TAX LAW UNCERTAINTY SHOULD NOT DELAY SUCCESSION PLANNING Page 12
Spotlight
President’s Message 3
Financial Highlights 4 2017 Election Results 5
6 – 9
10 – 11
Commitment to Serve: Dean Owen on the ranch and in the air Community Center
WHO WE ARE One of the West’s leading agricultural lenders, Farm Credit West and its wholly owned subsidiaries are cooperatively-owned lending institutions providing financial services to farmers, ranchers, and agribusinesses. Our offices are located in Arizona and California’s Central Coast, Imperial Valley, South 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 by email to the Marketing Department at marketing@farmcreditwest.com.
BOARD OF DIRECTORS
Tax Law Uncertainty Should Not 12
Chairman of the Board Joey Airoso............................................. Pixley, CA
2017 Renewal Scholarship 13
Vice Chair of the Board Sureena B. Thiara.............................Yuba City, CA
Delay Succession Planning
Recipients
California-Style Rajas 14 Why Mechanize? 15 Balancing the Passion 16
and Economics of Farming
DocuSign 17
Robert Amarel, Jr.............................Yuba City, CA Teresa Castanias.................................... Dixon, CA Mark A. Cook..................................... Willcox, AZ Gregory O. (Butch) Dias, Jr..................Visalia, CA J. Dick Eastman................................... Powell, WY Catherine Fanucchi........................ Bakersfield, CA
Protect your online accounts 18
Douglas C. Filipponi...........................Creston, CA
Territory and Office Locations 19
Robert N. Hansen..............................Hanford, CA
with smart password practices!
Craig C. Gnos........................................ Davis, CA
Blake Harlan...................................Woodland, CA Tom Ikeda................................Arroyo Grande, CA
MISSION STATEMENT Farm Credit West will ensure THE CUSTOMER COMES FIRST by providing superior service at competitive rates, in a timely,
professional, and ethical manner, and by delivering a meaningful return on equity through our patronage program.
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SPOTLIGHT | Fall 2017
Colin Mellon.......................................... Yuma, AZ Barry Powell..................................Sacramento, CA Brian Talley..............................Arroyo Grande, CA
PRESIDENT’S MESSAGE Mark Littlefield, CEO
Your Success Is Our Success Building trusted relationships with our customers
As a professional in the agricultural industry, you understand the importance of building a trusted relationship with your lending partner. Unlike other industries, farm and ranch
programs designed to equip staff with the
bring our collective voice to the agricultural
operators have a unique set of challenges
tools and knowledge required to better
industries we serve.
(such as weather, labor, and food safety)
meet your needs. Additionally, we have
that fluctuate regularly throughout a
focused efforts on leadership development
harvest season. At Farm Credit West, our
for younger staff to ensure that we have
staff understands this and is committed
a deep bench for future management
to learning about you as individuals.
of the Association. Combined, these
As a member-owned cooperative, our
efforts enable Farm Credit West and Farm
association has the flexibility to stand by
Credit Services Southwest staff to truly
you in good times and bad, providing
understand your operation and better
steady access to credit while maintaining
meet your financial objectives.
our committment to provide a robust and consistent return on investment through an active patronage program. For over 100 years, we have carried out our mission that the CUSTOMER COMES FIRST, helping countless farmers and ranchers achieve their personal and financial goals.
Last quarter we said farewell to one of our dedicated directors, Adam B. Firestone. Mr. Firestone has given much of his time and talent to provide effective governance and oversight to Farm Credit West. We appreciate his many years of service. As we say goodbye to Mr. Firestone, I would like to welcome Tom Ikeda, a newly elected Board member. Mr. Ikeda resides in Arroyo
Our commitment to providing the best
Grande, where he works for a third-
service possible does not stop with our
generation farming operation of vegetables,
staff. Every decision your association’s
citrus, and avocados. I would also like
Board of Directors makes is done with
to congratulate Blake Harlan on his re-
the purpose of better serving you, our
election to the Board. Mr. Harlan resides
member-borrowers. Your directors
in Woodland, where he farms processing
are each highly qualified industry and
tomatoes, alfalfa, almonds, and various
We pride ourselves on maintaining an
community leaders committed to ensuring
other crops. Much of Farm Credit West’s
expert staff comprised of dedicated
the success of Farm Credit West and
success is attributed to the contributions
individuals, each of whom are recognized
our member-borrowers. Most of your
of the many customers who have served
as having high integrity and a passion for
directors are fully certified graduates of
as directors over the years, and we extend
helping our customers meet their financial
the “Premier Governance Series,” a state
our utmost appreciation to each of them
needs. Furthermore, many of our staff
of the art development program designed
for their leadership, insight, and many
members have direct experience in farming
specifically for high performing directors.
years of dedicated service.
or ranching. This unique experience allows
In addition, each of these individuals are
our team of experts to truly understand
active participants in NACD, a nationally
your agricultural operation, and the
recognized director development
nuances related to running a farm and
program. Your directors have the skills
ranch. For many years, Farm Credit West
and experience needed to provide the
has invested in developing training
association with sound leadership and to
At Farm Credit West, our staff and Board of Directors are dedicated to helping your business succeed. We are committed to you as a partner in agriculture, because your success is our success.
Farm Credit West | Fall 2017
3
Financial Highlights Farm Credit West reported net income of $110 million for the first six months of 2017. These year-to-date earnings are ahead of our business plan target. Also, during the first six months of 2017 our average earning assets and capital levels increased and we strengthened our allowance for loan losses.
$6,323
$6,722
$7,627
$9,206
$9,441
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2016
Jun. 30, 2017
19.9%
20.4%
18.8%
19.3%
20.7%
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2016
Jun. 30, 2017
Members’ Equity as a % of Total Assets
Average Earning Assets (in millions)
Average earning assets increased $235 million, or 2.6%, during the first six months of the year. The full impact of the Southwest merger and significant loan growth during 2015 was recognized in the average earning assets calculation during 2016. Farm Credit West is experiencing modest
In the first six months of 2017, total members’ equity increased $123 million, primarily due to net income of $110 million and an increase in the preferred stock balance of $17 million. Partially offsetting net income during the six months were preferred stock dividends of $4 million.
loan growth in 2017.
$96
$72
$120
$142
$132
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2016
Jun. 30, 2017
0.54%
0.53%
0.50%
0.59%
0.64%
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2016
Jun. 30, 2017
Allowance for Loan Losses as a % of Loans
Our allowance for loan losses totaled $61 million (0.64%
Nonearning Assets (in millions)
of loan principal and interest) at June 30, 2017, compared with
Nonearning assets (nonaccrual loans plus other property
0.59% of loan principal and interest at December 31, 2016.
owned) decreased by $10 million or 7.6% to $132 million
The allowance is our best estimate of the amount of probable
at June 30, 2017. The decrease was primarily due to a $9
losses existing in our loan portfolio as of each balance sheet
million decrease in nonaccrual loan volume as a result of
date. We determine the allowance based on a regular
$16 million in net repayments partially offset by $7 million in
assessment of the loan portfolio, which generally considers
transfers to nonaccrual during the year. The other property
recent historic charge-off experience, collateral evaluations
owned balance decreased by $1 million.
and adjustments for other relevant economic factors.
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SPOTLIGHT | Fall 2017
2017 Director and Nominating Committee Election Results Board of Directors
2018 Nominating Committee Sam Nevis, Matt Mariani, Nicholas Miller,
Congratulations to Blake Harlan and Tom Ikeda, who were recently elected
Dana Merrill, Louis Pandol, Michael Dias,
to serve on the Farm Credit West Board of Directors. Farm Credit West
Kim Grizzle, and Mike Blohm
Board members are the governing voice of the Association, acting to
2018 Alternates for Nominating Committee
represent the best interests of the Association’s shareholders.
Kulwant Johl, Rajeev Davit, Mike Richardson, Craig Reade, Julien Parsons, Jared Fernandes, Bill Plourd, and Larry Ott
Retiring Director: Adam Firestone Adam Firestone Blake Harlan
Blake has been reelected to the Farm Credit West Board. His family has a sixth-generation family ranch which farms processing tomatoes, alfalfa, wheat, corn, sunflowers, and almonds in the Yolo County area.
Tom Ikeda
retired from the
Tom is a new member to the Farm Credit West Board. His family has a third-generation diversified farming operation of vegetables, citrus, and avocados in the San Luis Obispo area.
Farm Credit West Board this year. Adam represented Farm Credit West stockholders with
Thank you to those who participated in the election process. You play an
the utmost integrity.
important role in Farm Credit West’s success. We would like to convey our
We thank him for his
most sincere appreciation to those who agreed to serve as Board of Director
dedicated service and wish him well in all future
candidates, Nominating Committee members, Nominating Committee
endeavors. Adam Firestone started on the
candidates and to all those stockholders who cast their ballots.
Central Coast Farm Credit Board in 1997.
Seeking qualified candidates to run for the Board of Directors of Farm Credit West, ACA Directors serve on the boards of Farm Credit West, ACA and each of its subsidiaries. If you are interested in running for a board seat in the 2018 Farm Credit West director election, we would like to hear from you. The following regions will have one director seat available:
Sacramento Valley | Southern San Joaquin | Southwest If you are interested, please contact Chris Brumfield at 916.780.1166 no later than November 3, 2017.
Farm Credit West | Fall 2017
5
Commitment to Serve Dean Owen, on the ranch and in the air By John Frith
Lt. Col. Dean Owen is firmly rooted in two worlds. When on 30- to 60-day deployments with the Arizona Air National Guard, he flies KC-135 Stratotankers above trouble spots around the world — filling stations at 25,000 feet to refuel Air Force bombers, reconnaissance planes, and other aircraft. But when not on duty, he’s likely to be
Owen grew up in a farming and ranching
piloting a horse as he runs a small cattle
family in southeastern Arizona and knew
ranch and a feed lot in rural Yavapai
he wanted a career in agriculture from an
County, some 100 miles north of Phoenix.
early age. But his dad was among the
“It’s kind of funny,” Owen drawls. “When I’m flying everyone wants to ask me what it’s like being a cowboy. When I’m on the ranch, everyone wants to ask me what it’s like to fly.” One thing’s for certain: Col. Owen is on the ranch thanks in large part to Farm Credit, which actively seeks out qualified veterans to help them get started in farming, ranching, or agricultural-related fields.
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SPOTLIGHT | Fall 2017
few family members who had chosen a non-farm career path, choosing to serve in the Air Force and then as a full-time member of the Air National Guard. So he knew he was going to have to figure out a way to acquire land and capital. He helped put himself through the University of Arizona by working on ranches and shoeing horses, and after graduating in 1997 with a degree in animal science, he worked as a cowboy
on various ranches and continued serving with the
Farmer Veteran Coalition, a nationwide nonprofit based
Air National Guard, which he had joined while in
in Davis, California that’s funded in part by Farm Credit.
high school. In 2000, he was offered a pilot position that would allow him to save more to eventually buy livestock. Six years later, after serving in the Middle East on active duty and then as a Guard reservist, he had enough set aside to lease nearly 13,000 acres,
“There’s a resoluteness about them, a willingness to stand up when they’re knocked down that ties in well with the ups and downs of farming. They’re drawn to the challenge.”
allowing him to raise 125 head of cattle. But of course, he needed financing, which most banks were reluctant to offer somebody just starting out. “I barely had enough money to buy my cows, and every time I visited a bank loan officer they wanted my first-born as collateral. I called my college professor and he said to come down to Phoenix and visit him and to bring all the documents I would bring into a bank interview,” he recalled. After reviewing Owen’s situation, the professor thought his business model penciled out and suggested they go to lunch with a friend of his, Frank Shelton, a former vice president with Farm Credit Services Southwest (now a subsidiary of Farm Credit West). “He looked at my portfolio, shook my hand and said he’d give me a line of credit and $40,000 to start…
Len Monaco is a Marine veteran and a retired
I love Farm Credit,” Owen said.
Farm Credit West Portfolio Manager who currently
In return, Farm Credit West loves veterans.
serves as the association’s veteran coordinator
The cooperative and several other farm-based organizations are working hard to connect returning veterans with agricultural careers, believing that
supervises a companywide mentor program and where he reaches out to veterans wherever he can. He says the financial institution has found veterans to be great employees.
He looked at my portfolio, shook my hand and said he’d give me a line of credit and $40,000 to start … I love Farm Credit. veterans’ skill sets blend seamlessly with the
“We’re always looking for qualified people, and we
demands of farming and ranching.
feel veterans, for the most part, exhibit the character
“We found from our own internal data over the years that once a veteran makes a decision about a career
and honor and integrity we want in our workforce,” Monaco said.
path, there’s a certain tenacity about sticking with it,”
He said in California it’s more difficult for a veteran to
said Michael O’Gorman, Executive Director for the
acquire the land needed to make farming or ranching Continued on next page
Farm Credit West | Fall 2017
7
It’s always a bonus if we can help someone who is a veteran and has served our country. work, unlike other parts of the country
to help people getting started to obtain
O’Gorman said he launched the program
where land and regulations are less
that capital.”
in 2008 after surveys showed that while
expensive. So part of the outreach effort is to encourage veterans to pursue careers in farm-related services, such as lending, chemicals, transport, and appraisals. Monaco visits colleges such as Chico State, Fresno State, and Cal Poly San Luis Obispo to reach out to veterans, which he compares to finding needles in a haystack as there may be 200 veterans on a campus of 20,000 students. Farm Credit also offers scholarships for veterans and others to attend the Center for Land-Based Learning’s California Farm Academy, which trains young farmers and ranchers. Monaco also said the cooperative’s recruiters also look for veterans to hire. Doug Norton, a Farm Credit Services Southwest vice president who works with Owen, said the organization makes it a point to help younger, smaller operators.
“It’s always a bonus if we can help someone who is a veteran and has served our country.”
them get into agriculture. He said that was a glaring omission since so many people from rural areas join today’s all-
notes, has a number of programs
volunteer armed forces.
available to help finance a veteran’s transition to agriculture, including educational conferences and small grants
And he said linking veterans and farmers is a win-win for both.
averaging between $4,000 and $5,000 to
“For every veteran we’ve helped find
pay for such things as pregnant heifers,
purpose in a meaningful career and
drilling wells, and greenhouses. The $1.5
perhaps helped them overcome traumatic
million in grants made so far has been
experiences, we get a good person into
donated by a number of sponsoring
the agricultural industry, which is in dire
organizations, including Farm Credit and
need of new blood and talent,” he said.
the Newman’s Own Foundation. Another major sponsor, Kubota, donates four tractors each year that the Coalition can give away.
Like many professions, farming is rapidly aging as the baby boomer generation nears retirement. But unlike others, farming is often passed from generation
The organization is now ramping up a
to generation, and about half of all
membership program that links veterans
American farmers left their fields during
with vendors willing to offer discounts
the farm crisis of the 1980s.
and also holds career fairs and even has
out and make credit available to young,
a small 6-acre training farm in San Jose
beginning or small operators who have a
where four veterans are now learning the
desire to be in agriculture,” Norton said.
ropes. And it has created a Homegrown
“We understand that it takes upfront
by Heroes label that participants can put
capital to do that and we look for ways
on their packaging materials.
SPOTLIGHT | Fall 2017
help veterans, none were there to help
The Farmer Veteran Coalition, O’Gorman
“It’s one of our focus areas to reach
8
there were 40,000 groups organized to
“Farming is not usually something you decide to start in your 20s by saying to yourself, ‘I’m going to work twice as hard as everyone else and maybe I’ll make a little money and maybe I won’t.’ Typically, farms are handed down to the next
generation, but we can no longer rely
opened a feed lot where they custom-
home, I focus on ranching, the feed lot
on that,” he said.
feed up to 1,000 calves being weaned.
and my family.”
Owen agreed that agriculture needs to get more young people involved, but said financing is usually a problem if you’re not inheriting an existing operation. “The problem is that young people need to be financed. I’d give anything to be able to leave the military and do this full-time, but can’t do so yet. But if a guy goes into Farm Credit with some money
And while his children are still young – he and his wife, Jessica, have three girls ages 6 to 11 and an 18-month-old boy – he said the kids already love ranching so there’s hope a new generation will become ranchers as well.
contact them. For more information
working with me.”
the two worlds parallel each other in many ways, even though he is able to compartmentalize them.
work vaccinating calves one time. They’ve
“They both take the same skill set –
helped me work my way out of tough times
attention to detail, leadership, integrity,
and I know they’re on my side.”
and the feeling that the buck stops with
at 125 head of cattle, Owen recently
916-780-1166 and Len Monaco will
call 530-756-1395.
vs. being a cattle rancher, Owen says
Unable to obtain more land and capped
at HR@farmcreditwest.com or call
about the Farmer Veteran Coalition,
As for what it’s like flying a military jet
meet with you. I even put Doug Norton to
them to reach out to Farm Credit West
help already,” he said. “The kids love
you 100 percent,” he said.
earth. And they’ll drive out to your place to
interested in a career in agriculture, ask
“My older daughter in particular is a big
and a good business plan, they’ll back
“They know agriculture and they’re down to
If you know of a veteran who might be
you,” he said. “But when I’m on duty, I focus on flying and when I’m back
Farm Credit West | Fall 2017
9
Community Center
Passing the Gavel: Arizona FFA Annual Meeting In June, 2017, Farm Credit Services
invites a past state president to begin the
year’s kick off ceremony was particularly
Southwest Portfolio Manager, Mark
meeting by directing a ceremonial kick
meaningful as he passed the gavel to the
Brawley, attended the 2017 Arizona
off in place of the current state president.
current State President, his daughter,
FFA Annual Meeting and presented a
This year, Farm Credit West Director Colin
Makenna Mellon. This event was a surprise
scholarship to a deserving student.
Mellon (Arizona FFA State President in
to Makenna and there was more than a
Each year at this event, the Arizona FFA
1987) was asked to serve in this roll. This
few tears in the audience.
Congratulations to David Gill
Recipient of Western Grower’s 2017 Award of Honor David Gill will be presented with the 2017 Award of Honor during the Western Growers Association Annual Meeting in October of this year. Western Growers notes that Gill’s visionary leadership has played an integral role in the success of Rio Farms, Gills Onions, Growers Express, True Leaf Farms - Church Brothers Farms, American Farms, G&H Farms and Mission Ranches, growing the capacity of each company to bring fresh produce to the state, nation and world.
10 SPOTLIGHT | Fall 2017
Community Center Farm Credit West Sponsors the Epicurean Esprit Farm Credit West staff, in addition to members of the Yolo County community, joined together earlier this year at the “Epicurean Esprit – A taste of Yolo County’s Finest Wine and Cuisine” located near Woodland, CA. This prestigious wine and food tasting event, sponsored in part by Farm Credit West, is one of two major fundraisers sponsored by Friend of Meals on Wheels. Funds collected during this event ensure continued daily meal preparation and delivery to over 350 seniors in Yolo County. Unique to the Yolo County program, the Elderly Nutrition Program operates a full restaurant style kitchen to prepare fresh cooked meals daily. Volunteers from the community, including Woodland Portfolio Manager Chuck Moore, deliver noon time meals five days a week to the homebound elderly.
Farm Credit Washington D.C. Fly-In As part of our commitment to serve our member-owners, six Farm Credit West Board members and two Executive Staff traveled to Washington D.C. this summer to meet with Arizona and California lawmakers. This event was orchestrated through a larger “Farm Credit Fly-In,” coordinated by the National Farm Credit Council. As such, representatives from
California State FFA BBQ
Farm Credit associations across the nation were present to communicate the value the Farm Credit system brings to rural America
Earlier this year, Farm Credit West joined with Farm Supply, and J.B. Dewar
and specifically, young, beginning, and
to sponsor the annual BBQ at the California FFA State Finals at Cal Poly, San
small farmers. The highlight of the week
Luis Obispo. Approximately 28 Farm Credit West volunteers from several
was a reception hosted by Farm Credit at
branches (many of whom are FFA alumni) donned their Farm Credit West
the Great Hall of the Library of Congress
aprons and got to work trimming and slicing approximately 2,300 lbs. of Harris
for Legislators and their staff. Customer
Ranch Beef Tri-Tip and slicing, buttering, and toasting hundreds of loaves of
photos, stories, and products were
French bread. This was the 37th year Farm Credit hosted the FFA BBQ.
featured at this event.
Farm Credit West | Fall 2017
11
Tax Law Uncertainty Should Not Delay Succession Planning By Sil Reggiardo
President Trump promised and will pursue tax reform, but Congress must agree to any proposal. For the most part, a majority vote in both houses would allow tax reform for about a decade, and at least sixty Senate votes would be required for “permanent” tax reform. Getting even a majority vote in both
special use valuation rules may apply).
estate will not be subject to transfer taxes
houses could be a chore. Therefore, any
This leads to valuation discounts because,
due to the large exemption now in effect,
tax reform is likely to be temporary. Tax law
for example, a buyer would not pay 25%
discounts reduce tax basis without saving
uncertainty, however, should not prevent
of a property’s value or company’s value
transfer taxes – a bad result. Current
farming business succession planning as
for a 25% interest. That buyer would not
estate planning often focuses on the
part of overall estate planning.
have control of the property or company
interplay of valuation discounts and basis
Relevant Tax Law Changes and Overview
and could not easily market the interest.
adjustments (along with some income
Due to valuation discounting under rules
tax planning). It is more complicated than
that ignore whether family members own
ever and involves uncertain outcomes.
Federal gift, estate and generation-skipping transfer taxes may apply to farmers and others. (California has no such transfer
the entire property or entity, estates that would initially appear taxable are actually
President Trump wants to eliminate the “death tax” and change the basis
taxes.) There is one unified exemption for
below the exemption.
gift and estate taxes, and an identical one
Although these valuation discounts are
his plan are not clear.
generally good if they reduce transfer
Importance of Non-tax Planning
for generation-skipping transfers. Two decades ago, these exemptions were a mere $600,000 and the top tax rate was 55%. Today, the exemptions are $5,490,000 (rising with inflation) and the top tax rate is 40%. Spouses may now transfer their gift/estate tax exemption to each other. Interests in closely-held businesses and fractional interests in real estate are valued based on what an informed and motivated buyer would pay (although certain farm
12 SPOTLIGHT | Fall 2017
taxes, these days they can actually be bad. As property passes through estates, it generally receives a new market value income tax basis. This basis adjustment can, among other things, reduce or even eliminate taxable gains if the next generation sells. The valuation discounts have a dampening effect on market value and, therefore, this basis adjustment. If the
adjustment rules in estates. The details of
Farmers like other family business owners cannot simply stop succession planning as part of their estate plans because we have significant tax law uncertainty. Uncertainty about the laws and everything else will exist. In many ways, uncertainty creates a need for good planning. Tax laws are relevant but should not drive planning. Focus first on business and family issues. Run a mental movie regarding how
2017
the farm or other business might stay within the family. Think about how family members might interact with each other and whether they
Holiday Schedule
are likely to stay in the business. Some may remain in (and even run) the business, while others might be a poor fit. Family members who do stay should be treated fairly (not necessarily equally) and in a manner that does not drive non-family key personnel away.
Labor Day
Consider limiting business ownership to those involved in operations
Monday, September 4, 2017
while allowing a broader family group to own the land and even equipment. Choosing appropriate ownership structures and having
u
proper agreements can be important. Centralizing ownership
Columbus Day
and decision-making in long-term trusts can promote long-term
Monday, October 9, 2017
family ownership.
u
Conclusion
Thanksgiving Day
Good succession planning requires a focus on estate planning
Thursday, November 23, 2017
and business planning, and in the family farm context it involves family members and real estate. It is complicated, and tax laws
u
are just one factor.
Christmas Day
Sil Reggiardo is a Partner in Downey Brand’s Sacramento office.
Monday, December 25, 2017
His practice focuses on estate planning, taxation and transactions. He can be reached at sreggiardo@downeybrand.com
2017 RENEWAL SCHOLARSHIP RECIPIENTS Congratulations to all of our 2017 renewal scholarship recipients! These students continue to maintain academic excellence in an agricultural related major. Scholarship recipients are eligible to renew their scholarship for up to three years after their initial award. This year’s students renewing their scholarship will each receive $1,500 towards their education. Cameron Abatti Brawley, CA
Angelica Fernandes Tipton, CA
Markus Kasbergen Woodland, CA
Stephanie Pandol Delano, CA
Kavin Sihota Selma, CA
Remington Campbell* Brawley, CA
Eleanor Harlan Woodland, CA
Kaycee Larios* Holtville, CA
Matt Pandol III Delano, CA
Kelsey Swall Tulare, CA
Jason Couto Jr. Riverdale, CA
Foster Hengst Woodlake, CA
Alexandra Lavy Yuba City, CA
Sydney Parsley* Buckeye, AZ
Elizabeth Talley Arroyo Grande, CA
Joshua Cramer Lemoore, CA
Anna Hinrichs San Miguel, CA
Macy Lavy Biggs, CA
Olivia Rome El Paso, TX
Logan Taylor Yuba City, CA
Lauren Danna Yuba City, CA
Hattie Jameson Visalia, CA
Maggie Madden Paso Robles, CA
Harleen Sandhu Yuba City, CA
Caroline Van Ruiten Robbins, CA
Sarah Dreyer Exeter, CA
Cory Kasbergen Woodland, CA
Elena Montemagni Visalia, CA
Allison Schindler* Buckeye, AZ
*Recipient of FFA renewable scholarship
Farm Credit West | Fall 2017
13
From the Farmer’s Kitchen
Photo: Bottle Branding
California-Style Rajas
Found on page 110 of Our California Table: Celebrating the Seasons with the Talley Family By Brian Talley
Classic Mexican Rajas consist of strips of grilled poblano peppers sautéed with onions, herbs, and a little cream. They are so good and so common in Mexico that it’s surprising that they aren’t on more menus in Mexican restaurants in the United States. I was first introduced to them at a restaurant called La Super-Rica Taqueria in Santa Barbara, which Julia Child made famous when she declared it her favorite place in town. La Super-Rica’s version is made in the traditional manner and served atop a fresh corn tortilla. My version incorporates red and yellow bell peppers, which adds a nice bit of sweetness that plays off the bit of heat from the poblanos. This dish is versatile and can be served as a side dish or turned into a main course with the addition of shrimp or chicken. It’s also great with pasta.
SERVES 3 PREP TIME: 1 hour if roasting peppers, 30 minutes if peppers are already roasted and peeled
Add bay leaves and herbs. Deglaze with
2 poblano peppers
vegetables. The idea is to do this fairly
1 red bell pepper
white wine. Add broth and sour cream, and simmer until most of the liquid is gone and the remainder simply coats the quickly so the peppers don’t get too soft.
1 yellow bell pepper
Check seasoning, add salt as needed.
1 medium onion, sliced
To Roast Peppers
2 tablespoons olive oil 2 cloves garlic 2 bay leaves ½ teaspoon mixed dried herbs: marjoram, thyme ¼ cup white wine ¼ cup chicken broth 2 tablespoons sour cream Kosher salt, about ½ teaspoon Roast and peel peppers according to the directions below. Remove seeds
Sauté sliced onions in oil over mediumhigh heat until it begins to brown, about 7 minutes. Stir in garlic and pepper strips and cook an additional 2 minutes.
The Austrian variety of Gruner Veltliner is excellent with this dish and the vegetables in general. If you want something less obscure, try Reisling or Sauvignon Blanc.
Cut the peppers in half, and remove the entire stem and core. Flatten the halves. Toss the pepper halves in canola or olive oil to coat. Place them on a baking sheet and roast, skin-side up, at 350° F for 10 – 15 minutes, until the skin turns black. Or grill the pieces, skin-side down, until the skin turns black. Either way, watch them carefully, and remove from heat as soon as the skin is charred all over. Place the blackened peppers in a covered bowl — not a bag — and allow them to steam for at least 5 minutes. When they are cool enough to handle, the skins will slip right off. Reserve all the juices that comes out of the peppers and add it back into whatever recipe you’re using.
Brian Talley on the farm
For additional seasonal recipes, seek out Brian Talley’s book Our California Table: Celebrating the Seasons with the Talley Family, available on their website: www.talleyvineyards.com/Our-Wines/Cookbook.
Photo: Bottle Branding
and chop into strips about ¼ inch wide.
What to Drink
Why Mechanize?
Challenges Managing Field Labor By Kevin Layne, Vice President — Key Relationship Manager (Tulare)
As a grower or rancher, you are not a stranger to regulations and their impact on your business. Perhaps the most challenging set of regulations to manage are those relating to farm labor. Regardless of where your operation is
the U.S. Department of Labor verifies that
In addition to loans, Farm Credit West
located, you are subject to many layers
migrant worker regulations are being met,
also offers several leasing programs for
of regulation from local, state, and federal
as well as the Migrant Seasonal Protection
the same types of equipment. Our leasing
entities. To comply, growers must sift
Act (MSPA), I-9 inspections, joint liability,
program provides options with no down
through each of these layers frequently
and discrimination and retaliation claims.
payment, interim funding for large projects,
to determine the most conservative
All the above regulations are further
competitive pricing, flexible payment
regulation, particularly as they relate to
compounded during labor shortages.
terms, and choice of residuals. Leasing
labor wage and hours, safety, and hiring/ terminating employees. Typically, taking a conservative approach is the most successful path to avoid a violation.
To mitigate potential violations, you may be looking for an alternative to hiring field labor. The solution can often be found in mechanizing your field labor.
In California, the regulatory environment
By purchasing or leasing equipment,
can feel overwhelming. Adding to the
your up-front costs may be higher, but
complexity is the fact that these regulations
in the long-run, your money is usually
are dynamic, changing significantly every
well spent. Not only is mechanization
year. It is important to note that several
cost effective, but it also reduces the
new laws received wide spread publicity
risk of violation, and can greatly simplify
in early 2017. These include regulations
your operation and reduce headaches.
related to sanitation and field safety
Furthermore, you are reducing the risk
(enforced by Cal/OSHA). Specifically,
of labor shortages and creating
Cal/OSHA inspectors now include in
consistency in your end-product.
their review the following items when
How Farm Credit West Can Help
evaluating grower operations: incidents of valley fever, heat illness prevention, nitrates in groundwater, night lighting, and sexual harassment and abusive conduct trainings. Through the U.S. Department of Labor, regulators review grower operations to identify violations as they relate to payment of non-productive time, minimum wage increases, paid sick leave and the Affordable Care Act (ACA). Furthermore, the California Department of Pesticide Regulations evaluates grower operations for new worker protection standards while
can be a great tool for tax planning.
At Farm Credit West, we offer a variety
REGULATORY ENVIRONMENT RESOURCES AND PUBLICATIONS:
of equipment financing options. We offer
• Bureau FELS and Ag Alert
loans for both new and used equipment
• CA Association of Winegrape Growers
such as tractors, trailers, implements, harvesting equipment, packing and processing equipment, cold storage equipment, winery equipment and facilities,
• Western Growers • A gricultural Personnel Management Association (APMA)
systems, and solar systems. We offer
• F arm Labor Contractor (FLC) 9-Hour Continuing Education Courses
competitive interest rates, both variable
• Leginfo.legislature.ca.gov
dairy equipment, above-ground irrigation
and fixed rates, with several different options including no pre-payment penalties.
• AgSafe
Farm Credit West | Fall 2017
15
Balancing the Passion and Economics of Farming By Dr. David M. Kohl
The agriculture industry is being transformed at an accelerated rate by global and domestic economics. Coupled with major megatrends such as consumer taste, demographic and generational shifts, technology, and a widening disconnect between farm and city, the landscape is definitely evolving. So, what is required of today’s producer to be successful? In short, the answer is balance. While facilitating a young farmer
recently celebrated the 50th anniversary
solutions and teamwork. Interestingly,
conference, I asked participants to
of the boys basketball team’s 104
each of these skills has a direct business
name some topics that they would
winning streak; a modern-day record.
connection.
consider industry opportunities, even
One teammate was critically injured on
if some may view the same topics as
the front lines in Vietnam and returned
industry challenges. The topics they
home. He served as an inspiration to all
listed included: the local fresh organic
the players during the streak.
movement; farm transitioning, whether
One of the keys to being a viable and sustainable agricultural business is balancing the passion and desire of farming with the logic of economics.
For the veteran group, we asked how
In other words, how does one translate
military experience and training could
passion into an actual and viable
be advantageous in operating a farm
business? That is where the logic of
business. Clearly energized by the
economics comes in. So, let’s examine
question, the responses included critical
the necessary elements of the economics.
This same session included a group
thinking skills, strategic planning and
of military veterans looking for ways to
execution, contingency planning, global
Goalsetting
reconnect with agriculture and the land.
awareness, attention to detail, coping
This group struck me as special; in part
with adversity, strong work ethic, good
because alumni from my high school
communication, and the ability to develop
generational or retirement; multi-complex businesses; entrepreneurial endeavors inside and outside of agriculture; and a younger group that often multitasks.
16 SPOTLIGHT | Fall 2017
Before embarking on any business adventure, one should articulate one’s goals in writing. In other words, a working document that can be reviewed is
necessary. This process should include goals that are one to five years out, and separated by business, family and person. In order to maintain focus and balance in your goals use the S.M.A.R.T. principle (specific, measurable, attainable, reasonable and rewarding, and timely). This goal setting process establishes the mission and vision of the business.
Cash Flow The next step is a cash flow statement. This step exercises one’s critical thinking skills. In essence, the cash flow is simply an outline of your production plan and timetable with numbers. Specifically, use different
DIGITAL STRATEGY
scenarios of price and cost. For example, conservatively estimate different levels (low, average, and high) of bushels per acre and price per bushel, or production and price per pound of meat or milk, to develop a cash flow for the farm. For the military, this is similar to contingency planning, or planning for the unknown.
Balance Sheet The development of a balance sheet, both business and personal, allows one to determine the net worth, examine debt levels, and identify the assets and resources available to generate earnings. Often, the processes of developing cash flow and the balance sheet require one to work side-by-side with a lender, spouse, partner, mentor or team of advisors. Financial documentation such as credit scores and reports for each type of business entity adds reality to the pursuit of dreams and goals.
Projected Income Statement Finally, a projected income statement can be a useful tool in monitoring results. One of the keys to a successful strategy is monitoring results because it reveals the tweaks needed along the way. This attention to detail in production, marketing, finance, and risk management increases the probability of long term success. Whether it is on the basketball court, in a military operation, or in business, long term sustainability requires a balance between one’s passion and the logic of economics. Undoubtedly, farming is a passion and those in the industry, either young or older, share a passion for producing. However, in a rapidly evolving industry, the economics must be present to turn passion into profit; and specifically, the elements of setting goals, projecting cash flow, and developing balance and income statements. The critical thinking and planning on the economic side of the scale balance the passion, but remember that neither passion nor economics are as strong without the other.
Farm Credit West has joined forces with DocuSign to develop an e-signature platform. What is DocuSign? DocuSign is an e-signature product that allows customers to view and sign documents electronically. No longer is there a need for paper, fax, shipping and re-keying errors. The DocuSign platform helps manage every aspect of every transaction from preparing and sending documents to signing and managing them. Using DocuSign, we can have faster turnaround times. And, you can rest assured that everything stays secure, legal, and visible, with a complete audit trail.
What are the benefits? • S AVE TIME FOR CUSTOMER Instead of emailing, faxing or others ways to present a paper document, you can have the information signed in a matter of minutes and not days. • PAPERLESS No more printing, finding an envelope, postage, locating a post box and waiting for your document to be returned to the office. • E ASIER FOR YOU DocuSign ensures the signing process between the lender and customer is seamless. It’s a great way to make things easier for both parties. • S AFE AND SECURE PROCESS Electronically signed and sealed documents are more secure than their paper counterparts because they tend to contain more information about who signed them, and they can be protected from unauthorized tampering.
DocuSign is expected to be released in late 2017.
17 Farm Credit West | Summer 2017
TECH WATCH
Protect your online accounts with smart password practices! By Michael Levin, CEO / Founder of the Center for Information Security Awareness Many businesses and websites enforce password requirements and best practices. If your workplace or website account does not have a password policy, use the following tips to help make stronger passwords: • Passwords should be at least eight characters in length and include both upper and lower case letters • Passwords should include a number • If possible, passwords should include special characters or symbols such as the dollar sign or percentage symbol. Every additional character you add to a password makes it more difficult for a hacker to guess or break your password. By using a mixture of letters, numbers and symbols, you make password discovery, whether by guessing or using password cracking tools, EVERY DAY IN THE NEWS we are reminded that cybercrime is on the rise. Recent global ransomware and phishing attacks indicate that security awareness training is now required for everyone. Think about how you secure your home at night. Many homeowners use three layers of security, including a standard lock plus a deadbolt and alarm system to feel safe. But what about securing your online accounts? Your passwords are like the locks on your home, and without strong passwords, your data and financial accounts are left wide open for any hacker. Passwords are the most valuable prizes to any hacker — it gives them opportunity to enter your accounts and spend as much time as needed to steal your data. That’s why it’s vitally important to develop strong password practices and to protect your password at all times. Not only do intruders exploit easy-to-guess passwords, they also try to take advantage of the ways many users fail to protect their passwords, such as: • Never changing a password • Not changing a password after being notified that a site was hacked • Using one password for everything • Using home and personal passwords at work • Sharing passwords with others • Sending passwords by email without encryption • Writing down a password and keeping it near the computer • Hiding a password in a desk drawer
more difficult. There are various password security recommendations to consider. Many security experts recommend avoiding the use of words that are found in a dictionary. One option would be to pick a word, replace one or more letters in the word with a number and add some special characters. You can also consider a pass phrase — a short phrase that is easy for you to remember, but would be almost impossible for an intruder to predict. Once you have such a phrase, you can easily create a complex but memorable password simply by using the first character or letter in each word of the phrase. For example, the sentence “I wish my brother Tom was here too!” could create a nine-character password — IwmbTwh2! — that contains uppercase letters, lowercase letters, numbers and symbols. Just select the first letter or number in each word, and include a couple of uppercase letters. Michael Levin has a long and distinguished career in computer forensics and cybercrime investigations. He is the founder of the Center for Information Security Awareness (CFISA), an organization offering online and in-person security awareness training. To read more from Michael, log in to your myFCW account at FarmCreditWest.com, select My Industries and search the keyword “security”.
Territory and Office Locations ADMINISTRATIVE OFFICE 3755 Atherton Road Rocklin, CA 95765 916.780.1166 CAPITAL MARKETS 1446 Spring Street Suite 201 Paso Robles, CA 93446 805.237.0998
Yuba City Woodland
« Rocklin
Farm Credit West Administrative Office
DINUBA 940 W. El Monte Way Dinuba, CA 93618 559.591.9378
Hanford
Dinuba
Tulare Capital Markets Templeton Kern County Santa Maria
HANFORD 1111 W. Lacey Boulevard Hanford, CA 93230 559.584.2681
Ventura
IMPERIAL VALLEY 485 Business Park Way Imperial, CA 92251 760.355.0291
Tempe Imperial Valley Yuma
Rural Arizona/ Safford
KERN COUNTY
TEMPE
19628 Industry Parkway Drive Bakersfield, CA 93308 661.399.7360
3003 S. Fair Lane Tempe, AZ 85282 602.431.4100
RURAL ARIZONA / SAFFORD
TEMPLETON
VENTURA
YUBA CITY
1120 S. 20th Avenue Safford, AZ 85546 928.348.9571
175 Cow Meadow Place Paso Robles, CA 93446 805.434.3665
2031 Knoll Drive Ventura, CA 93003 805.477.1020
900 Tharp Road Yuba City, CA 95993 530.671.1420
SANTA MARIA
TULARE
WOODLAND
YUMA
1178 Tama Lane Santa Maria, CA 93455 805.922.7991
200 E. Cartmill Avenue Tulare, CA 93274 559.684.1478
440 Pioneer Avenue Woodland, CA 95776 530.666.3333
2490 S. 5th Avenue Yuma, AZ 85364 928.344.3200
Farm Credit West | Fall 2017
19
3755 Atherton Road Rocklin, CA 95677
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