Rural Scene
THE
RURAL HOMEOWNERS TURN THEIR DREAMS INTO REALITY WITH FARM CREDIT FINANCING.
WINT E R 2019
Enriching rural life.TM
Rural Scene
THE
On the Cover
PUBLISHED BY
Farm Credit makes financing homes and small hobby farms easy.
Farm Credit of Western Arkansas is
In This Issue
a customer-owned financial cooperative
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Director Scene 2019 Director Election results
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Photo Contest Winners 2019 contest results
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From Dream House to Home Members share how Farm Credit makes home financing easy
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2019 AR Farm Family recognition Western Arkansas members have earned district and county honors
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Cooperative Scene Highlighting cooperative principles that define Farm Credit
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Community Scene Committed and connected to rural Arkansas
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Kohl-laborations Insights from nationally-acclaimed ag economist Dr. David Kohl
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Western Scene Employee happenings
providing financing and related services to farmers, ranchers, rural homeowners, agribusinesses and timber producers in 41 western Arkansas counties. With a loan volume of $1.3 billion, Farm Credit of Western Arkansas is a member of the 103-year-old Farm Credit System, a nationwide network of borrower-owned lending institutions providing more than $217 billion in loans to rural America.
Office Locations and Loan Officers Arkadelphia 2858 Walnut (870) 246–8061 Rachael Godwin, David Smith
Greenbrier 89C N Broadview St. (501) 679–5464 Josh Dunlap
Ozark 1808 Farm Credit Dr. (479) 667–3855 Tom White
Benton 15227 1-30 South (501) 860–6391 Kevin Barham
Harrison 129 W Industrial Park Rd. (870) 741–2020 Brad Matlock, Rob Branscum
Paris 3772 W Hwy 22 (479) 963–2841 Donna Griffin
Bentonville 3600 SW Regional Airport Blvd. Suite 16 (479) 273–3311 Darla Larson, Dilynn Dodd
Hope 1722 E 3rd St. (870) 777–6704 Jerry Nance, Clay Lance
Prairie Grove 1181 E Heritage Pkwy (Hwy 62) (479) 400–6160 Daniel Keeton, Tyler Whorton
Huntsville 14238 Hwy 412 (479) 738–6622 Trey Villines
Russellville 2797 E Parkway (479) 968–5030 Jim Taylor, Anna Lester
Magnolia 1703 Pittman St. (870) 234–8611 Shaun McKamie
Siloam Springs 4970 Hwy 412 East (479) 524–6754 Savannah Dickinson
Mena 1607 Hwy 71 North (479) 394–1027 Rex Dollar
Texarkana 2305 Trinity Blvd. (870) 772–1882 Jonathan Shumate, Jennifer Hooper, Rustin Watson
Clarksville 1007 Interstate Dr. (479) 754–2876 Anna Lester, Sherry Boen Danville 302 E 5th St. (479) 495–2711 Lora Briggs De Queen 800 E Magnolia Ave. (870) 584–3113 Jordan Icenhower Fort Smith 12907 Hwy 71 South (479) 434–4040 Andrea Leding, James Crabtree
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Glenwood 131 Hwy 70 East (870) 356–2023 Adam Baker
Morrilton 1329 Hwy 9 (501) 354–2377 Hank DeSalvo Nashville 302 W Bishop (870) 845–2221 Denise Sweat
Tontitown 1091 W Henri De Tonti Blvd. (479) 717–6740 Misty Eastep Waldron 502 Frankie Matthew Dr. (479) 637–2087 Rex Dollar
Letter from the CEO
Board of Directors Your financial cooperative is having another very good year. A number of factors are contributing to our continued success, including our hard-working, motivated staff.
Chair Kenny Brixey, Casa Vice Chair Bob Dixon, Havana Steve Burke, Washington Renny Chesshir, Alma
Brandon Haberer
The association actually closed out the third quarter with a bang. September was record setting with the largest loan growth in new loans for any month in a given year, to date. The fantastic month the association had in September, coupled with another strong year overall, should translate into what looks to be a record patronage payout. As is true every year, we wait until our books close on December 31 to calculate patronage. I feel comfortable saying stockholders’ share of 2019 earnings should be significant, though.
It is obvious to employees and directors that members play a big role in our growth. Thank you. We appreciate you trusting us to serve the financing needs of your friends and family. We implemented a new loan closing survey this summer and members have been generously sharing their thoughts regarding the loan process and customer experience. This data has again confirmed that the majority of new business comes from members referring people they know. Association growth is a direct benefit of referrals. Indirectly, referrals benefit members with the potential for increased patronage. I also attribute continued growth to committed employees working with great members. In response to member feedback, we added branch office locations over the past few years to ensure we have a strong presence across rural western Arkansas. Our focus in 2020 is to begin work on a new electronic commerce platform that will allow secure, easy communication between our staff and members.
Chuck Davis, Ashdown Pam Faulkner-Moore, Casa Dusty Hampton, Russellville Kim Hogan, Ozark Ron Hubbard, London Cody Jones, Mansfield Bill Linton, Dover Julie Lively, Fulton Kenny Martin, De Queen Gene Pharr, Lincoln Mark Wilcox, Greenbrier President and CEO Brandon Haberer
About the Rural Scene The Rural Scene is produced for members and friends of Farm Credit of Western Arkansas. Address comments and story ideas to Editor, The Rural Scene Farm Credit of Western Arkansas 3115 W. 2nd Court • Russellville, AR 72801
That is just one of the technology enhancements in the pipeline. We are specifically targeting enhancements to aid in synergies at the branch level. We are leveraging technology to ease workloads. In turn, lighter workloads will allow staff more time to assist members, personally. We see this improving overall response and approval times. We are working feverishly behind the scenes to bring you these planned technology advancements as soon as possible. Much thought, planning and training goes into improving how we do business.
Editor Jill Robertson Jill.Robertson@farmcredit.com
An updated online loan application is a long-awaited and much anticipated enhancement. We launched the new myACCESS portal in June that allows members to access loan information at any time. Plans are for the updated online loan application to take online service to another level with the convenience of requesting a loan anytime, at your convenience. The end goal is to combine easier access to loans and loan information without giving up the numerous brick and mortar benefits that working with local staff provides.
Article quotes have been edited for content and appropriateness.
Best wishes for the holiday season,
Find us at “Farm Credit of Western Arkansas” on Facebook, and @FarmCreditWEAR on Twitter and Instagram.
Brandon Haberer President and CEO
Contributing Writer and Photographer Lindsey Holtzclaw Lindsey.Holtzclaw@farmcredit.com myaglender.com
Follow us on social media!
Member of the Cooperative Communicators Association. © 2019 Farm Credit of Western Arkansas.
Farm Credit of Western Arkansas is an equal opportunity employer and does not discriminate on the basis of race, color, religion, gender, sexual orientation, gender identity or expression, national origin, age, disability, genetic information, marital status, amnesty, or status as a protected veteran in accordance with applicable federal, state and local laws.
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DIRE C TO R SC E N E
Letter from the Board Chair Greetings from the board.
Kenny Brixey
Thank you to those who exercised your right as a cooperative member to vote in our 2019 director election. The ability to vote for the people you want to represent you in the board room is the cornerstone of our cooperative principles.
The Nominating Committee slated six candidates to fill three board seats up for reelection this year. Incumbents Bob Dixon and Steve Burke were reelected and Audie “Renny� Chesshir was elected to fill the Area 1 position. With just 1% of stockholders voting this year, the board is considering ways to encourage more member participation in the future. Revamping our Advisory Committee Member process is one way we hope to increase member engagement. In the past, we asked for verbal feedback at area Advisory Committee Dinners. Pulling detailed information from members in a group setting often proved difficult. Instead, this year we invited 25 members from each branch to share feedback through on online questionnaire. We believe this format will allow Advisory Committee Members the privacy and opportunity to share in more detail.
I am excited about what we may learn. I appreciate those who have agreed to complete what I am told is about a 12-minute online questionnaire. It is designed to help us evaluate some of our business practices and identify ways we may be able to better serve members. Finally, the board would like you to know that the transition of Brandon Haberer to CEO on February 1 has gone well. Ten months into his new role, Brandon and the senior management team have hit their stride. There are good things happening on many fronts. Notably, the association is having another great year. Brandon, management, employees and directors are focused on member needs and responsible growth. We are blessed with the best customers and hard-working employees.
Kenny Brixey Chair, Board of Directors Farm Credit of Western Arkansas
2020 FUTURE
LEGAC Y Statewide Farm Credit
YOUNG & BEGINNING
FARMER CONFERENCE FREE Conference
February 25th – 26th
Wyndham Riverfront, North Little Rock Designed For...
Network with fellow young farmers from across Arkansas at this FREE two-day learning event facilitated by Dr. David Kohl! It's an opportunity to...
• Ages 18-40, any farming experience welcome • Any size farming operation
• Network with young, beginning farmers from across Arkansas
• Both full-time and part-time farmers
• Discover the top 12 practices of successful producers
• Couples are invited to attend together
• Learn how to position for success in a cyclical economy
• Open to Farm Credit customers and non-customers alike
APPLY ONLINE BY DECEMBER 18, 2019 www.myaglender.com 5
Questions?
Call Jill Robertson at 479-968-1434, ext. 5106
DIRE C TO R SC E N E
2019 Director Election Results Members electing fellow members to serve as directors and help guide business decisions is an important part of our cooperative business structure.
Audie R. "Renny" Chesshir, Alma Area #1 – Representing Benton, Crawford and Washington Counties Term 2019-2023 Renny Chesshir will serve his first term as newly-elected director. He retired as General Manager of Farmer’s Cooperative in 2015 after a 30-year career. He has professional experience with the swine division of Cargill and has been a part-owner in a farm store. He earned a poultry science degree from the University of Arkansas and he and wife, Alicia, have a beef cow operation in Alma.
Bob Dixon, Havana Area #3 – Representing Logan, Polk, Scott, Sebastian and Yell Counties Term 2019-2023 Bob Dixon has a small cow/calf operation on 187 owned and 280 leased acres in Havana. He’s been a Farm Credit member for 50 years and attended Arkansas Tech University. He was reelected to his fourth term as director and has served most recently as Vice Chair of the Board.
Steve Burke, Prescott Area #5 – Representing Clark, Dallas, Garland, Grant, Hempstead, Hot Spring, Howard, Montgomery, Pike and Saline Counties Term 2019-2023 A 40-year Farm Credit member, Steve has been a full-time farmer since 1990. He and wife, Genevieve, have a 1,900-acre farming operation that includes eight broiler houses, 1,100 acres in pasture/hay, 800 acres in timber and a 150 head cow/calf operation. He has served as a Farm Credit of Western Arkansas Director since 2005.
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Farm Credit donated $2,090 to both the AR FFA Foundation and the AR 4-H Foundation in appreciation of members participating in the 2019 election process. Each completed ballot earned a $10 donation, with total funds split between the two organizations.
All serve a one-year term and are responsible for slating candidates for the 2020 director election.
● Bentonville
Siloam Springs ●
AREA 1A
AREA 2A
Madison
● Huntsville
Justin "Taylor" Gattis • Franklin
Newton
● Prarie Grove
Franklin
Crawford
Searcy
Johnson
Van Buren
● Ozark
AREA 1B AREA 3A
William "Will" P. Lane • Benton Allen L. Johnson • Logan
AREA 2B AREA 4A
Baxter
Marion
● Harrison
● Tonitown Washington
Ronnie T. Horn • Washington
Boone
Carroll
Benton
Pope
● Clarksville
James A. Ford • Franklin
Conway
● Fort Smith
Russellville
Logan Sebastian
Ronnie D. Hall, Sr. • Faulkner
Faulkner
● Paris
● Greenbrier
● Morrilton Yell
● Danville
DIRE C TO R SC E N E
2020 Nominating Committee Members
Perry
● Waldron Scott Saline Polk
AREA 3B
Casey T. Cotton • Logan
AREA 4B
James W. Mann • Perry
● Mena
Randy W. Peck • Hempstead
AREA 6A
Robert "Hunter" Lipsey • Sevier
Pike
● De Queen Sevier
● Benton
Hot Spring
● Glenwood
Howard
AREA 5A
Garland
Montgomery
Grant
● Arkadelphia
● Nashville
Clark
Dallas
Hempstead
AREA 5B
Danielle M. Kitchens • Howard
AREA 6B
Monte K. Davis • Sevier
Nevada
Little River
● Hope
Ouachita
Calhoun
● Texarkana Columbia
Miller
Election result totals are available to stockholders upon request. Contact Ginger Tippit at ginger.tippit@farmcredit.com or 479-968-1434 (ext. 5119). Or, write to: Ginger Tippit, 3115 W. 2nd Ct., Russellville, AR 72801.
● Magnolia
Union
Lafayette
The Board of Directors The 15-member board includes both member-elected directors and board-appointed directors, as dictated by association bylaws. All serve a four-year term. • Membership directly elects 12 board positions. Terms are staggered and three directors are up for re-election annually. • One director position is a stockholder appointed by the board. • Two director positions are non-stockholders selected by the board.
2019 Board of Directors (Seated, left to right) Kim Hogan, Julie Lively, Pam Moore, (Standing, left to right) Mark Wilcox, Chuck Davis, Dusty Hampton, Steve Burke, Gene Pharr, Renny Chesshir, Kenny Brixey (Chair), Bill Linton, Bob Dixon (Vice Chair), and Cody Jones. Not pictured, Ron Hubbard and Kenny Martin.
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M E M B E R SC E N E
from
dream house to
home
The advantages of financing country homes with Farm Credit
Six-year-old Nate flashes a practiced grin at the camera from the top step of the family’s back porch. He stands between his parents Clint and Victoria Baxter who sit on the steps with two-year-old twins Kaden and Lukas standing at their feet. Unimpressed with the prospect of a family photo, neither twin chooses to pose for the camera. Nate’s gaze leaves the camera, distracted by a toddler darting away from the group and towards the family dog at the edge of the patio. Hands outstretched, Lukas is rewarded with a wet lick before his father jumps up and gently steers him back to join the family. Simultaneously, Victoria’s attention turns to the second twin who has kicked a small toy in the opposite direction and pulls away from her to chase it. A family photo on the porch steps is a great idea…for another day.
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With demanding full-time jobs and three small children, it makes sense that the Baxters looked for a quick and easy financing option when they were ready to build their home.
Clint and Victoria Baxter with their children Kaden, Lukas and Nate and their family dog.
M E M B E R SC E N E Clint and Victoria Baxter talk with Vice President Donna Griffin.
The twins were born early and spent several months at UAMS in Little Rock. It wasn’t long after the twins were both home that the couple worked to finalize plans and financing for the new home they planned to build on land they’d purchased in the country. Vice President Donna Griffin said she was committed to making the loan as easy as possible because of all they had going on in their lives at the time. Clint coaches football and teaches math at Paris High School. Victoria is a Cost Analyst for Arkansas Nuclear One in Russellville. They began building their New Blaine, AR home in July 2018 and moved in early this spring. They have 36 acres adjoining Victoria’s parents’ farm and eventually plan to raise a few head of cattle. The Baxters point to Farm Credit’s all-in-one home construction loan as a reason they picked Farm Credit over other lenders. “We refinanced our existing land loan, got the home construction loan and finalized our permanent mortgage upfront, all in one loan closing,” Clint explained. “That was huge for us. It saved us time and paperwork and meant we knew exactly what our interest rate and payment would be before we broke ground on the house,” he continued. By combining home construction loans with permanent mortgage financing on the front end, borrowers lock-in their permanent, long-term, fixed interest rate at the beginning of the construction process. This removes any question about the long-term rate, loan commitment or payment amount.
“We bought this land on an adjustable rate because we knew we’d be building our house within a year,” Clint shared. “Being able to refinance our existing land loan with our construction loan and permanent mortgage simplified the process,” Victoria added. Victoria’s parents are long-time Farm Credit members and the Baxters have known Vice President Donna Griffin for years. Tom Schluterman, Victoria’s father, served as general contractor on the build. “We had friends who’d just built a home with Donna and Farm Credit and they had a lot of good things to say about her, the Paris office and the process in general,” Victoria said. “While we thought we’d probably finance with Farm Credit, we hadn’t expected all the benefits Farm Credit provided over the bank,” she continued. Always Local Service Local service is an advantage the couple appreciates. “We wanted to do business locally and know where our money was going,” Clint explained. “Banks don’t keep home mortgages anymore and not knowing who we’d ultimately end up doing business with wasn’t appealing. I want to know who I can talk to,” he concluded. Continued on page 10
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M E M B E R SC E N E
“Plus, Donna and Kathy were great to work with,” Victoria continued, referring to Paris Financial Services Specialist Kathy Schluterman who provided loan support.
The entrance to the Seib’s new home holds fond childhood memories for Audrey.
“Donna often dropped off construction draws at the bank which we appreciated. Kathy organized our construction receipts and stayed on top of the paperwork which was a big help,” she added. Home loans qualify for Patronage Cash. The Baxters were familiar with Patronage Cash from Victoria’s parents and say it was one more reason they chose Farm Credit.
Solving Problems That Other Lenders Can't
The road turns slightly and the tunnel hides what lies ahead. The end of the tree-darkened tunnel opens to the surprise of a tranquil pasture. The area is flat and more trees dot the property line in the distance. Facing due west, perfect sunsets are captured over those distant trees. Audrey remembers loving to ride four-wheelers through that tunnel as she was growing up. Her secret hope was that it would become her driveway one day, leading to a home she would build on that special spot.
For members Phillip and Audrey Seib of Ashdown, it was Assistant Vice President Jennifer Hooper’s ability to solve a problem that the bank could not, that sealed the deal for them.
Phillip works at Cooper Tire in Texarkana and Audrey is an Occupational Therapy Assistant at an area rehabilitation hospital. The couple have three-year-old daughter, Ruby, and a six-month-old daughter, Eliza.
Audrey had dreamed of building a home on a piece of her grandparents' farm since she was a child.
Audrey’s grandparents offered her and Phillip the five acres of her dreams a few years ago and they began planning their forever home.
“We were familiar with patronage, but didn’t know how much to expect. It was a nice surprise to find it was close to one month’s mortgage payment,” Clint shared.
Growing up, Audrey’s favorite spot on the Thrash family farm was a short lane lined by tall trees on both sides. The top limbs reach across the well-worn path and intertwine, creating a tunnel effect.
Unfortunately, financing conversations with a local bank soon frustrated the couple. The Seibs were building on family land, a common practice in the Little River County area.
10 The Seibs enjoy their front porch swing.
The Seibs finalized their loan in February 2018 and moved into their home in March 2019. Kasey and Kelly with Walker Brothers in De Queen served as their contractor.
Phillip and Audrey Seib with their daughters Ruby and Eliza.
The couple said Cheyenne Anderson and January Bennett, Texarkana branch Financial Services Specialists, were helpful and easy to work with as well.
The problem is that homes built on family land seldom go on the market. That means there are no comparable real estate sales to help appraisers gauge home value.
“Cheyenne and January made disbursements during the construction phase easy. We got our dream home and the process was worth it,” Audrey shared.
The Seibs say the bank could not offer a solution. With no comparable home sales, they did not want to risk valuing the home and property incorrectly.
“We can’t believe all the added benefits,” Phillip concluded.
“They’d finance the home construction but were non-committal on the final mortgage,” Audrey explained.
Springdale members David and Mortie Dassero reiterate that easy loan closings set Farm Credit apart in the marketplace.
“We couldn’t get a final loan amount from them. They wanted to wait until the home was built and then see what they MIGHT be able to do,” Phillip added. “That’s a scary position to be in. They were suggesting we build the house with no idea of the final appraised value. If their final appraisal was less than our cost, we’d be in a bad position. It made us uncomfortable and we didn’t want to go that route,” he continued. Assistant Vice President Jennifer Hooper met the Seibs at an area home show. After learning of their frustration with the bank, she explained home financing worked differently at Farm Credit. She said she would be willing to go to bat for them and work with the appraiser on a construction-cost approach in valuing the home they planned to build. “Jennifer was upfront and honest in regard to what she thought she and Farm Credit could do,” Phillip said. “She explained Farm Credit would combine our construction loan and permanent loan into one closing. We knew the home’s value, our 30-year interest rate and what our monthly payment would be before we began building.” According to Jennifer, building a home can be an overwhelming experience.
M E M B E R SC E N E
“Most people have never done it before, so I think it’s important to explain the process and what they can expect,” she said.
Easy Loan Closings
“In our 25 years of construction and real estate experience, this was the easiest transaction we’ve ever encountered,” David explained. “So simple and straightforward. Between us, I’d say, conservatively, we’ve probably been a part of more than 100 real estate closings and this was the easiest ever,” David added and Mortie affirmed. David manages family real estate and rental property. Mortie has an accounting degree and works for her family’s business, Richland Construction. The rural lifestyle attracted the Dasseros who searched for the right property for some time. Both were looking for the quiet, country lifestyle and a bit of distance from neighbors. Mortie smiled as she remembered how moving to the country and raising chickens was initially her dream. She said she’s all about the animals. The irony is that while they have a few chickens, it is David’s interest in raising goats that has taken over their hobby farm. They have more than 50 goats, 11 Belted Galloway cows, bees and an assortment of very content farm dogs. “Goat meat prices are crazy right now, so the goat market is strong,” Mortie explained.
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M E M B E R SC E N E
David checks on the Belted Galloway cows that are a part of Dassero's hobby farm.
Financing More Than Farms “We were chatting with Misty while we closed our land loan and learned Farm Credit finances homes too,” David added. The Dasseros say that conversation with Misty was fortuitous. While their bank gave them a competitive interest rate for the home construction, they said they weren’t happy with the interest rate the bank gave them for their permanent mortgage.
The cows mingle in the shade of trees near the house, a reminder that the Dasseros are, indeed, living the country lifestyle. Mortie said the wooden fence separating the house from the pasture wasn’t always there, allowing the cows even closer access. “Looking out the window to find a cow peering back was startling. Just a bit too close,” she smiled, and added that it wasn’t long after they finished construction that they added a fence to keep the cows further from the house. The couple said they used a bank to finance the first 37 acres they bought. “It was the most ridiculous thing we’d been through,” David shared. "They asked for too much information for what we were wanting to do and after two long, frustrating months we still didn’t have an answer.”
“Farm Credit was able to give us the 20-year, fixed interest rate that we couldn’t get from the bank,” Mortie said. Patronage Cash Surprise Allison said she had trouble convincing David to drop by and pick up his Patronage Cash in February. “When Allison called to say we had a Patronage check I just thought, ‘yeah, whatever, it’s probably like $7, or something’”, he laughed. Allison remembers the day and said, “I finally opened the envelope and told him the amount. There was a moment of silence and then he said, ‘I’ll come by today.’” “I was shocked,” David smiled.
Misty Eastep and Allison Kline with Mortie Dassero
The Dasseros completed their initial land purchase with the bank but, frustrated, David said he refused to go that route again. He looked for an alternative when financing a second, adjoining piece of land. “I pass the Farm Credit office in Tontitown to and from work every day and thought it was worth a shot to stop and ask if they finance small farms,” he explained. David met Assistant Vice President Misty Eastep and Financial Services Specialist Allison Kline that day. “We were shocked to have our loan approved in less than 10 days,” he added.
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When asked why he thinks the loan process is different at Farm Credit, David smiled and looked at Misty and Allison. “The fact that you all actually do your jobs, that’s what makes all the difference,” he answered.
Financing country homes is nothing new at Farm Credit. Satisfied members like the Baxters, Seibs and Dasseros are helping spread the word that Farm Credit’s advantages make it the best place to turn the house of your dreams into your home.
Story and photos by Jill J. Robertson
Supporting Our Local Communities
Voluntary Membership Democratic Member Control Members’ Economic Participation Autonomy and Independence Education, Training, and Information
Before flood waters receded, the leaders of three Arkansas Farm Credit associations had made a plan for supporting the people and communities impacted by historic 2019 flooding along the Arkansas River. Farm Credit of Western Arkansas CEO Brandon Haberer, AgHeritage Farm Credit Services CEO Greg Cole and Farm Credit Midsouth CEO James McJunkins decided that a joint $50,000 donation to the Arkansas Red Cross would be the best way to assist Arkansans in need. The late May and early June flooding caused the loss of agricultural land and crops, livestock, homes and businesses along the Arkansas River. Communities in all three association territories were impacted.
Cooperation Among Cooperatives Concern for Community
C O O P E RAT IVE SC E N E
7 Cooperative Principles
Concern for Community Members are committed to improving their local community.
Our members live and work in the areas affected and the donation demonstrated Farm Credit’s commitment to supporting rural communities. Farm Credit contacted members directly impacted, as well. Communities rely on the local economy to thrive and thriving communities help maintain the rural lifestyle our members choose to live. This is just one example of Farm Credit’s continued commitment to rural communities. Less visible but equally important is the commitment Farm Credit is making on the national level to fund needed medical facilities, bridges, roadways and infrastructure, and telecommunications for rural communities.
AgHeritage Farm Credit Services CEO Greg Cole (left), Farm Credit Midsouth CEO James McJunkins (second from left) and Farm Credit of Western Arkansas CEO Brandon Haberer (right) present a $50,000 statewide donation to the Arkansas Red Cross.
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KOHL
-laborations
Commentary, wisdom, and perspectives from globally renowned agricultural economist, Dr. David M. Kohl.
Rules of the Road for
Driving Your Business and Personal Finances It’s been an absolute privilege for me to work with some of the most intellectual and creative minds in the agricultural industry during my career. These have ranged from leading renowned academicians such as Dr’s. Tom Frey, Danny Klinefelter, and Paul Ellinger to proven, tried and tested producers, ag lenders, and agribusiness professionals. Good old-fashioned interaction and listening with a creative ear has inspired a list of the rules of the road that apply to business and personal finance, but also to life in general. Let’s examine a few to stimulate your thinking. The Corvette Rule Over the years, farm family living costs have been some of the most vague cash flow numbers in both personal and business finance. Recent years have seen profits and prosperity in many agricultural sectors enhancing agriculture income statements and balance sheets. A residual effect has been increasing family living costs as families enjoy the fruits of their labor. Many of the state and commercial farm record summaries analyzed have found living costs in the $70,000 to $90,000 range, with one state above $100,000 per family. One farm record system isolated grain producers and discovered the family living costs exceeded $200,000 for 20 percent of the grain farms in their database. So, what is the Corvette rule? What does a fancy sports car have to do with family living costs on the farm? Travel with me back in time to 1967 in the days of the Beach Boys, Rolling Stones, Beatles, Bob Gibson – the baseball pitcher, and the famous Chicago Bears linebacker – Dick Butkus. A shiny new red Corvette ranged in price from $4,495 to $4,895 for the big block 427 super power
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roadster. According to the farm record data
from Cornell University at that time, farm family living
The Tax Man Cometh
cost was approximately $4,000 annually. Fast-forward
Section 179 depreciation revisions and increased
to 1985 – the height of the farm financial crisis when
local, state, federal, and real estate taxes will be
the stock market was booming and the Chicago
added drains on cash flow. While tax strategy is a
Bears’ football defense featured Mike Ditka as coach
high priority for most businesses, the old adage “you
and Walter Payton as running back. Farm family living
don’t go broke paying income taxes” is definitely a
cost was $20,000 on average and a new Corvette
rule of the road. It is critical to balance tax reduction
was $22,000. Today’s fiftieth anniversary Corvette
strategy and investments in machinery and equipment
with a top end of 202 mph – loaded with accessories
which then can impact overhead cost. Deferred taxes
– comes in at $78,000 and is parallel with the farm
are a tsunami in the liability section on the balance
family living cost range of $70,000 to $90,000.
sheets of many producers who have tried to minimize taxes throughout the years.
Average Does Not Live Here Now, in the practical world, a wide variation in family
Investment Outside the Business
living expenses is observed. In some farm record
Concerning children and grandchildren’s education,
systems there is up to a $60,000 annual difference
make sure they contribute up to 50 percent of the cost
between the bottom one-third and the top one-third
of higher education as a rule of the road. They will
of farm living expenses. For young producers, living
become more engaged and focused on their studies
modestly is one way to gain a competitive edge
when they have some “skin in the game.” Invest 5
because family financial withdrawals can impact
percent of your net income outside the business. A
business growth and investment strategies.
seminar I attended in Canada really put this into
A rule of the road in developing your living expense budget is to calculate it on a monthly basis and then add 25 percent for unexpected expenses. If your “other” and “miscellaneous” categories of expenses are more than 10 percent of the budget, scrub your budget and add more detailed categories. Killer Toys Another subset of family living cost and cash flow drains can be non-farm capital expenditures, which could be real estate. Everyone needs a killer toy to “smell the roses” a bit, but keep expenditures on these items within reason. Corn prices at $7.00 per
perspective. The facilitator asked the audience, “Would you invest everything you have in one stock or bond?” The producers in the audience shook their heads “no” and then the light came on for them regarding the diversification angle. Yes, tax savings that one can receive by investing in nonfarm investments such as an IRA, SEP, or 401(k) retirement plan can be a tool to ensure that the business’ investments are not all eggs in one basket. The final rule of the road is to accumulate 50 percent of your retirement cash flow needs thru investments outside the sale or lease of the farm assets. This provides diversification of income flows and flexibility in the transition of the business.
bushel have resulted in some $100,000 log ice fishing houses with saunas, hot tubs, and satellite
Hopefully, these general rules can keep you between
TV. Lake houses, exotic vacations, helicopters, and
the lines in the financial journey down the road of
even a vintage 1967 Corvette – if you are not
business, personal, and life balance.
careful – can be drains on cash flow.
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Photo Contest Winners
Grand Prize - $500 Adalie Self • Amity
2nd Place Adult - $200 Trish Milam • Prescott
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1st Place Adult - $300 Victoria Doss • Amity
3rd Place Adult - $100 Penny Oakley • Solgohachia
1st Place Youth - $300
2nd Place Youth - $200
Pyper Silvy • Harrison
Taryn Jetton • Lincoln
3rd Place Youth - $100 Kendon McAlister • Green Forest
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2019 Farm Families of the Year Farm Credit of Western Arkansas members earn honors Farm Credit proudly sponsors the Farm Family of the Year program through the Arkansas Farm Bureau organization. Congratulations to Western Arkansas members who have earned district and county honors for exceptional farm management and community leadership. A luncheon in Little Rock on December 12 will honor the eight district winners and reveal the state Farm Family of the Year winner. The Arkansas state winner will compete in the 2020 Sunbelt Ag Expo Southeastern Farmer of the Year competition in Georgia next October.
District Winners
County Winners
North Central District Benton
Nevada
Kevin & Jacqueline Smith family of Decator
Mike Cottingham of Prescott
Boone
Perry
Jeff & Debbie Atkinson of Harrison
Steve & Flora Harrington family of Casa
Dallas
Polk
Michael & Cecilia Berry with Bluebird Farm of Sparkman
Dean & June Wiles of Mena
Faulkner
Saline
West Central District
Schaefers Brothers Farms of Conway
Renae Breckling of Benton
The Greene Family of Umpire Howard County
Johnson
Washington
Tanner & Amy Storment of Flat Rock
Pitts Family of Lincoln
Rabbit Ridge Farms of Bee Branch Van Buren County Alan and Angela Mahan own and operate Rabbit Ridge Farms where they raise cattle, hogs, chickens and sheep. The Mahans self-market all their products through wholesale distributors, retail, e-commerce, social media and their agritourism business.
Western District Jerry and Kathy DuVall of Hattieville Conway County Jerry and Kathy DuVall operate a 1,400-acre farm. They grow hay, timber, corn and soybeans and raise cattle and poultry.
Gregg and Shelly Greene, along with sons and daughters-in-law Mason and Lindsay and Marcus and Krystal raise poultry for Pilgrims on their 23 broiler house farm. They raise calves that are marketed at local livestock auctions. In addition, Gregg and Shelly operate, separately, a 700-sow hog production business.
Northwest District Gene and Ruby Davidson of Kingston Newton County
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For the past 39 years, the Davidsons have raised turkeys, run a cow/calf operation and own a logging company that cuts select hardwoods. They have two adult children Dustin and Sam.
Madison Greg Wheeler of Combs
C O M M U N IT Y SC E N E
Arkansas School Garden of the Year Winners The Farm Credit Associations of Arkansas partner with the Arkansas Department of Agriculture to sponsor an annual school garden contest. Farm Credit provides $3,000 in total prize money.
2019 Winners $1000
Best Overall Garden Pike View Early Childhood Center in North Little Rock
$500
Best Nutrition Garden Sheridan Intermediate School in Sheridan
$500
Best Environmental Garden Forest Park Elementary in Little Rock
$500
Best Community Collaboration Marshall Elementary in Marshall
$500
Best Start-Up Garden Springdale High School in Springdale Pike View Early Childhood Center
Sheridan Intermediate School
Forest Park Elementary
Marshall Elementary
Springdale High School
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C O M M U N IT Y SC E N E
Adam McClung Leadership Scholarship Blake Swain of Amity was named the 2019 Farm Credit Adam McClung Leadership Scholarship winner at the annual Cattlemen’s Convention in Hot Springs in August. The $2,000 award is made by the Farm Credit Associations of Arkansas in memory of former Arkansas Cattlemen’s Executive Director Adam McClung’s contributions to the cattle industry and Arkansas agriculture.
$10,000 Donation to the University of Arkansas The Farm Credit Associations of Arkansas made a $10,000 gift to the newly named Milo J. Shult Agricultural Research & Extension Center in Fayetteville. The existing research facility was renamed to honor the memory of Shult, a long-time employee who made numerous contributions to Arkansas agriculture.
New Scoreboard Vice President Shaun McKamie of Magnolia presented a $2,500 check to Rod Briggs, Lafayette County Schools head basketball coach. The school, located in Stamps, will use it to help fund a new scoreboard in the gymnasium.
Telling the Story of Agriculture
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Assistant Vice President Josh Dunlap of the Greenbrier branch office recently spoke to kindergarten classes at Greenbrier Eastside Elementary School. He discussed agriculture and where our food comes from.
Local Fire Department Donation Appraiser Brian Cowart has been a volunteer fire fighter with the Lodi Volunteer Fire Department for 18 years. His volunteer work qualified the organization for a $500 donation as a part of our Employee Involvement Program. The department used the donation to purchase needed equipment.
Junior Auxiliary Donation Priscilla Johnson of the Hope branch is an active volunteer and leader with the Hope Junior Auxiliary. Her volunteer commitment qualified the organization for a $500 donation as a part of our Employee Involvement Program.
Bentonville and Siloam Springs employees teamed up to feed over 300 livestock exhibitors at the Benton County Fair.
Breakfast Fundraiser Financial Services Specialist Jo Upson of Huntsville volunteered at the Huntsville Kiwanis pancake breakfast as a part of a community event that raised funds for a Madison County child’s medical bills.
C O M M U N IT Y SC E N E
Benton County Fair
Ag Ambassadors Farm Credit of Western Arkansas is proud to be a sponsor of the 2019-20 Arkansas Tech Department of Agriculture Ag Ambassador team. During the annual retreat, the team completed a number of hands-on leadership activities.
Arkansas State Fair FFA Fundraiser To help support local FFA chapters, our Clarksville and Russellville offices donated a $500 Arkansas Quality Processing gift certificate for FFA members to sell raffle tickets for. The raffle raised over $4,300 to help support FFA members in Pope and Johnson counties. Vice President Anna Lester presented winner Verna Boxnick with her prize.
Farm Credit of Western Arkansas supported livestock participants by sponsoring a number of belt buckle awards. The Farm Credit Associations of Arkansas, together, made a $5,000 donation to support livestock activities at the 2019 State Fair.
Calf Raffle
Clark County Fair
The Paris branch office donated $500 towards the purchase of a calf for the Logan County 4-H fundraiser. The calf was given away at the South Logan County Fair in September.
Financial Services Specialist Morgan White and Vice President Rachael Godwin volunteered time cooking for Clark County Fair livestock exhibitors.
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W E ST E RN SC E N E
New Faces
ERIC BIRKNER joined the Farm Credit team on October 1 as Regional Credit Analyst. He works in the Morrilton branch office and was raised on a cattle farm in Solgohachia, north of Morrilton. He previously worked as an agent for Farm Bureau and earned a finance and accounting degree from the University of Arkansas.
ROB BRANSCUM also began his Farm Credit career on October 1. He is a Loan Officer in Harrison and lives in Marshall. He was raised in Marshall where his family owns a cow/ calf operation and he earned an ag business degree from the University of Arkansas in May. His hobbies include playing basketball and golf and following his favorite sports teams.
Changing Places
CHRISTINA ROLING transitioned from Regional Financial Services Specialist to Training Coordinator on October 1.
ALI REED moved from Regional Financial Services Specialist for the southern offices to Financial Services Specialist in Nashville on October 15, filling the position vacated by Brenda White’s retirement.
Retiring BRENDA WHITE, Financial Services Specialist II in Nashville, has announced she will retire on December 31. Brenda has been instrumental in the Nashville office’s success for the past 31 years. She says her retirement plans include spending more time with her family and, specifically, her grandchildren. Farm Credit appreciates Brenda’s commitment to Farm Credit and wishes her all the best as she enjoys a well-earned retirement
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myaglender.com
Stop by your local branch office for your free copy of our 2020 calendar. The calendar features photos from our photo contest that highlight the beauty of rural western Arkansas. Watch myaglender.com after the first of the year for details on how you can participate in next year’s photo contest.
W E ST E RN SC E N E
2020 Association Calendars
2020 CALENDAR
2020 Arkansas Women in Agriculture Conference
Mark your calendars for March 17 & 18, the dates of the 15th annual Arkansas Women in Agriculture Conference. The conference will be held at the Holiday Inn near the Little Rock airport. Look for details at arwomeninag.org.
2020 Scholarship Information
Farm Credit of Western Arkansas will award 20 - $1,000 scholarships next March. Information and application form can be found at myaglender.com after January 1. Scholarships are open to current members and the children/grandchildren of current members.
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3115 W. 2nd Court Russellville, AR 72801
Enriching rural life.
TM
Let Farm Credit’s industry-leading knowledge, competitive products, and more than 103 years of agricultural and rural financing experience help you. • Farms of all sizes • Livestock • Country home and home construction • Land
Merry Christmas & Happy Holidays!
Photo by Katie Judy of Omaha, AR 2019 Photo Contest Entry
• Recreational land • Timber tracts • Forestry products and processing
Holiday Hours Tuesday, December 24 Wednesday, December 25 Wednesday, January 1
Closed Closed Closed
Payments must be made by NOON on Tuesday, December 31 to be credited for 2019. On all other business days, payments are due by 3:00 PM. If mailing your payment, please allow five business days for delivery.
Regular Business Hours: (12:30 PM – 1:00 PM closed for lunch)
Monday – Friday
8:00 AM – 12:30 PM 1:00 PM – 4:30 PM
