HeartBeat Summer 2011

HeartBeat summer 2011

Focused. Customized. Solutions™

Breaking Ground for the Future.

FCSF 2011 Summer HeartBeat.indd 1

7/6/2011 2:32:19 PM

Board of Directors — FCS Financial ACA James Nivens, LaRussell, Chairman

Dan Devlin, Edina

Brian J. Peterson, Trenton, Vice Chairman

Maurice Glosemeyer, Marthasville

Kenneth Bergmann, Walnut Grove

Daniel Hulse, Hannibal

Bruce Bjornson, Oro Valley, Ariz., Appointed

David Meneely, Chillicothe, Appointed

Michael L. Bruce, Nevada

Mark S. Pierce, DeKalb

Michael L. Cook, Columbia, Appointed

Gene H. Rademacher, Bland

James Davis, West Plains

Rick Rehmeier, Augusta

Mark DeShon, Clarksdale

Office Locations Bolivar 417-326-4016 1-866-326-4016 Cameron 816-632-7265 1-800-225-6949 Carthage 417-358-0808 1-866-358-0808 Chillicothe 660-646-5044 1-800-264-3276 Clinton 660-885-8164 1-866-885-8164 Columbia 573-449-5910 1-800-241-5910 Farmington 573-756-5747 1-800-276-8120 Hannibal 573-221-0273 1-800-798-0273 Harrisonville 816-884-3061 1-800-517-3348 Higginsville 660-584-7181 1-866-584-7181 Jefferson City 573-636-7131 1-800-292-7131 Kirksville 660-665-6243 1-800-530-5512 Lebanon 417-588-5828 1-866-588-5828 Marshall 660-886-6897 1-800-228-6897

Maryville 660-582-6464 1-800-813-5722 Memphis 660-465-8984 1-800-407-8984 Mexico 573-581-3192 1-800-314-3192 Mt. Vernon 417-466-7101 1-866-466-7101 Neosho 417-451-6084 1-866-451-6084 Nevada 417-667-8206 1-888-667-9681 O’Fallon 636-327-1787 1-800-379-3276 St. Joseph 816-279-2118 1-866-279-2118 Sedalia 660-827-5810 1-800-310-5810 Shelbina 573-588-2156 1-800-432-2156 Springfield 417-862-4158 1-866-862-4158 Union 636-583-5400 1-800-583-5480 West Plains 417-256-2298 1-866-256-2298

Above: Daryl Oldvader, FCS Financial CEO, shar ceremony at Macon on May 27.

Below: One month later, dirt is moved and cons

Cover: FCS Financial management and directors in Macon. – (l-r) Daryl Oldvader, CEO, James Nive Board Vice Chair and Gary Irwin, VP Administra

Publication Information CEO: Daryl Oldvader Editor: Amy Wieberg, amy.wieberg@myfcsfinancial.com HeartBeat is published three times a year by FCS Financial. Please address any comments to FCS Financial, Attn: HeartBeat Editor, 1934 E. Miller St., Jefferson City, MO 65101. For more information about FCS Financial or to access your account online, visit myfcsfinancial.com

Member Cooperative Communicators Association

2

Printed with farmer-grown soybean ink on recycled paper.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 2

7/6/2011 2:32:23 PM

table of contents

ncial CEO, shares the vision of FCS Financial during the groundbreaking

moved and construction is in high gear at the site.

nt and directors who served on the site selection committee break ground EO, James Nivens, Board Chair, Danny Hulse, Dan Devlin, Brian Peterson, VP Administration.

4

Daryl’s Desk

6

Member Feature

10

Youth in Ag

14

Dollars & Cents

16

Life is Simple

17

Risk Management

18

News Briefs

23

Nivens’ Notes

• • • • •

Online Banking Updates iPad Winners Community Support Macon Groundbreaking Director Elections

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 3

3

7/6/2011 2:32:28 PM

daryl’s desk Daryl Oldvader, CEO

Greetings – Once every five years or so, the subject of the Farm Bill surfaces. This year is no exception as politicians begin laying the groundwork and testing the waters for what could become a very contentious debate for the 2012 Farm Bill. Both Senator Stabenow and Congressman Lucas have expressed the desire to have a Farm Bill drafted from their respective agricultural committees during the scheduled 2012 timeframe. While I certainly do not profess to be a political analyst, I admittedly have reservations pertaining to the timely crafting of this major legislative framework for agriculture. In my view, the final outcome will boil down to three critical issues – federal budget, political climate, and timing. All three could serve to dampen any heightened expectations pertaining to a new Farm Bill.

First, unless you have been on the Space Shuttle for the past four to five years, the U.S. budget is in trouble. At this writing, we have a $14.3 trillion debt ceiling that is in certainty to be tapped. What remains uncertain, however, is how “we” will deal with it.

In the lending business, total debt may not be all-bad if revenues are adequate to manage timely interest and principal repayment. Unfortunately, a growing $1.5 trillion budget deficit indicates that our current U.S. debt load exceeds our revenue generating capabilities. In 4

fact, today the U.S. debt now exceeds 95 percent of our GDP. In the lending business, we call this situation “overleveraged.” Based on this profile of the national budget, it is highly probable that any future budget cuts will include agriculture and crafted into the 2012 Farm Bill.

T he s e c ond i s s u e – w h ic h will undoubtedly work against an encouraging Farm Bill outcome, is the current political climate. The most recent turnover in Congressional representation was not by accident.

Taxpayers have made their statement to Washington by whisking into office all those who promised to reduce federal spending without raising taxes.

Additionally, since all departments within the federal budget are destined to cry foul, why should Congress fret about such a small representation of the economy like agriculture, which appears to be doing very well? This issue becomes even more compounded when factions within agriculture cannot agree.

The current political climate could be described as tepid for agriculture.

Finally, timing is everything. Like many of our customers, I have seen a few Farm Bills in my 39-year career.

To suggest that they do not impact the welfare of the industry would be a gross oversight. I can think back to the ‘80s when the payment-in-kind (PIK) program was utilized to reduce grain surpluses and stabilize farm incomes. Land values did not have a floor until the implementation of the Conservation Reserve Program (CRP) in 1986. More recently, the advent of crop insurance created a major impact for the economic welfare of agriculture.

Today, the agricultural industry is viewed as one of the most stable and prosperous segments of the economy.

The U.S. net farm income is estimated to be $95 billion for 2010 (the 10-year average is approximately $65 billion) while estimates for 2011 are in excess of $100 billion. Farm debt has remained relatively stable at $245 billion for the

past year as excess cash in the Ag sector has served to manage debt levels. All in all, things have been relatively good down on the farm.

On the other side of the coin, things have not been so rosy in the city. Unemployment remains high at nine percent, while approximately 40 percent of all homes are upside down – that is, the mortgage amount exceeds the home value. To add injury to insult, approximately 13 percent of all mortgaged homes in the U.S. are in some process of collection or foreclosure. Not surprisingly, home values continue their downward spiral. My point is that one could hardly make a case for Willie and Farm Aid in the current environment.

While there will be undoubtedly fewer dollars available for agricultural programs compared to the past, I think there are also some stark realities as we approach the dawn of a new Bill.

First, approximately 80 percent of the current Farm Bill appropriations are for entitlement programs consisting of nutrition (i.e., Food Stamps, which 14.5 percent of Americans utilize) and child nutrition (i.e., school lunch programs).

Over the course of the past two decades, the Farm Bill has shifted from that of a commodity support program to a food nutrition program. With that said, margin protection for producers (both crop and livestock) should be a mainstay of any new Ag legislation. This will be instrumental in mitigating the volatility of markets attributed to fiscal and trade policies which seem to hold agriculture hostage. Finally, any new legislation should continue to support young, beginning, small, and minority farmers.

Regardless of when and how the new Farm Bill is crafted, the most farreaching issue is the fiscal responsibility of this nation to manage within an acceptable budget and debt level. The consequences of ignoring the basics of economics will have far greater consequences for agriculture and the nation than any prescribed Farm Bill.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 4

7/6/2011 2:32:34 PM

Challenges Ahead Over the course of the past few months, Mother Nature has dominated the news with reports of storms, tornados, and floods. We have a number of members throughout the state who have experienced adversity as a result of these natural events. During our 95 year history, FCS Financial has helped many producers regain momentum after tragic losses created from natural disasters. We are committed to providing our members with viable financial options while their businesses return to normalcy. Please contact your loan professional to discuss available alternatives for your particular situation. At FCS Financial, we offer Focused. Customized. Solutions.™

Missouri Agriculture Disaster Relief Fund The Missouri Department of Agriculture announced an agriculture disaster relief fund to help Missouri farmers recover from severe storms, floods and tornadoes that have impacted thousands of families and businesses this year.

The Missouri Agriculture Disaster Relief Fund will address the immediate needs of farm families, extend grants to non-profit organizations for infrastructure repair and clean up and help individuals or organizations with major disaster grants.

Administered by the Missouri Agricultural and Small Business Development Authority, the fund will offer assistance for the following: • Immediate need - This grant of $500 is available to Missouri farm families recovering from a natural disaster and is designed to help those most devastated by the disaster meet their most urgent needs. The grant may be used for household or agricultural purposes and is available on a first come, first serve basis as long as funding for this purpose is available. The farm family must have been directly impacted by a natural disaster and have suffered

physical and/or economic loss.

• Grants to organizations Up to $5,000 is available for non-profit organizations, counties, municipalities and other political subdivisions for infrastructure repair, clean up or other projects that assist in recovery for the farm community.

• Major Disaster Grant Funding in amounts greater than $5,000 is available on a special needs basis. Any individual or organization may apply for these grants but organizations who can serve a large number of producers will be given priority.

Those interested in donating to the fund can do so by electronic check or credit card by visiting http://MDA.mo.gov or http:// AgriMissouri.com.

Donations qualify as a charitable contribution under Section 170 of the Internal Revenue Code. Applications for disaster relief funding can be accessed on http://MDA.mo.gov or http://AgriMissouri.com or contact the Missouri Agricultural and Small Business Development Authority at (573) 751-2129 or masbda@mda. mo.gov.

sites for updates on mo disasters Flooding in Missouri http://www.mo.gov/2011mofloods/ Responding to tornadoes in SW Missouri http://www. mo.gov/05222011joplintornadoes/ Current river levels and forecasts http://dnr.mo.gov/env/wrc/ currentriverobservations.htm.

Road Closures http://maps.modot.mo.gov/timi/ Resources for Your Flooded Home http://extension.missouri.edu/explorepdf/ miscpubs/mp0904.pdf

need assistance Missouri Disaster Response and Recovery Contacts Find contact information for SEMA, American Red Cross, Animal Health, MU Extension, water issues and more at: http://extension.missouri.edu/publications/ DisplayPub.aspx?P=EMW1001

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 5

5

7/6/2011 2:32:34 PM

member feature

Bringing far more than credit to the table.

Photos and story by Mark Parker

6

The bottom line for FCS Financial

For CEO Daryl Oldvader,

farmers that increased volatility

is a better bottom line for its friends

adding even more value to what FCS

offers both income opportunities

and customers.

Financial offers its customers was the

and cost challenges. The Virginia

Delivering dependable credit

purpose of the informational series.

Tech professor emeritus, who advises

and solid financial expertise is a big

“It’s all about providing tools

businesses, lending institutions and

part of that mission but it doesn’t

to help our customers succeed,”

governments, said an increasingly

stop there. Information empowering

Oldvader said. “In today’s agriculture

complex global economy delivers

farm

decision-making

— more than ever before — good

demand-driven commodity prices

is another critical component for

information fuels good decisions and

as well as pressuring farm inputs —

Missouri’s premier ag lender.

that’s what we’re trying to provide

“The global economy has a daily

for our customers.”

impact on your farm,” Kohl asserted.

business

Cutting edge intel from some

And, without a doubt, China is

of the nation’s foremost experts

Farming

was the harvest that FCS Financial

landscape of today and tomorrow

the 800-lb. gorilla in the room.

shared at a series of eight free ag

was a major theme of several of

“China

seminars across the state during

the speakers at the symposium

significantly

February, as well as its commercial

and the seminars. In Kansas City,

agriculture,” he said, pointing out

farm symposium in Kansas City in

internationally known economist

that economic growth in emerging

January.

David Kohl told FCS Financial

economies is a double-edged sword,

the

economic

and

its

impact

growth Midwest

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 6

7/6/2011 2:32:36 PM

driving grain prices higher while

in agriculture than any other

“There is no better time to be in

also wielding upward pressure

industry.”

agriculture,” he told farmers at the

on petroleum-based farm inputs.

Bullish on both crops and

ag symposium in Kansas City, “but

“Eighty percent of farm expenses

livestock, Russell asserted that

we have to control and mitigate

are linked to oil — you have to put

profitability is a function of neither

volatility because it’s something

that into your game plan,” Kohl

size nor type of operation and urged

we’re all going to see for the rest of

noted.

financial

“Bullet-

our careers.”

proof your balance sheet and, in

Farmers

the bottom part of the cycle, you’ll

state who attended the series of

make themselves “farm credible”

catapult ahead.”

eight seminars sponsored by FCS

with good records and sound

Financial also had the opportunity

risk management plans. “The

protein

bar is going to be raised,” Kohl

Pearson, host of Iowa Public

ag

said, predicting that credit will

Television’s “Market to Market,”

Washington Bureau Senior Vice

be rationed to a greater extent in

seconded

President Jim Wiesemeyer ran

The

Virginia

suggested

that

economist

farmers

must

preparedness:

Calling world demand for soy “unquenchable,”

Russell’s

Mark

optimism:

from

across

the

to gain insight from top-notch talent.

Informa

Economics

the future. Maintaining a good relationship with a lender, he emphasized, will be an important component

of

farm

financial

success.

“Having a very, very stable lender is one of your tools,” Kohl said. “A lender that has deep knowledge of your industry is one of the things that you require but, on the other side, you have got to make yourself farm ‘credible’ and that means good records and utilizing and executing those records.”

While several of the ag experts

advised farmers to keep a good handle on rising input costs, they were also optimistic about what lies ahead for production agriculture.

Although

cautioning

that,

“everyone is downloading risk to

Above: Dr. David Kohl interacts with the 400-plus participants at the 2011 Commercial Farm Symposium. Kohl reminds farmers to make themselves “farm credible.” Left: Moe Russell speaks about to the same crowd about risk and financial preparedness encouraging them to “bullet-proof your balance sheet.”

the farmer,” Iowa farm business consultant

Moe

Russell

said,

“There is more money to be made HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 7

7

7/6/2011 2:32:39 PM

the gamut of issues impacting agriculture. A frequent contributor to Pro Farmer, the farm policy expert told farmers their industry is entering “a golden age — but it can still be derailed.”

Expressing

concern

about

oceans of federal debt, Wiesemeyer noted that the U.S. now spends more on defense than the next 14 nations combined. Social Security, Medicare

and

Medicaid

costs

also cast a shadow on the future but market fundamentals look very strong for agriculture. The economic realities of federal budget deficits and ballooning interest of the national debt must be dealt with

by Congress and the White House, he said, for the U.S. economy to achieve full recovery.

Burgeoning demand abroad and tight global stocks, Wiesemeyer said, bode well for crop prices. With twice as many hogs as the United States, China has a huge appetite for soybeans and corn prices also promise to continue to ride high due to ethanol and other demand streams.

Top: Dr. Barry Flinchbaugh discusses the current ag climate in our nation’s capital and what it means to you back on the farm. Clockwise from top left: Mark Pearson, Dr. Elwynn Taylor, Dr. Pat Guinan, and Jim Wiesemeyer.

Each provided their thoughts on today’s agricultural environment during recent meetings for FCS Financial customers and the general public.

8

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 8

7/6/2011 2:32:50 PM

And because, “There just aren’t

a weather update at the ag seminars.

Guinan has put together a

enough acres to go around,” he said.

He presented a historical view of

long list of weather-related web

On

side,

Missouri weather and identified

sites that can be accessed at http://

Wiesemeyer noted an all-time low

some recent trends. Four of the

agebb.missouri.edu/weather/

for the U.S. cow inventory and

five warmest winters, going back

wealinks.htm.

a strong beef export market that

to 1895, have occurred since 1990,

necessitates favorable trade policies

Guinan pointed out, but the past

risk, Daryl Oldvader related that

for American agriculture.

two have recorded below average

FCS Financial, as a partner of

Wiesemeyer told the farmers

temperatures. And although last

production agriculture, also takes

that the next farm bill will be

summer was the seventh hottest on

measures to deal with volatility.

written against a backdrop of

record, the state really hasn’t had an

His advice for Missouri farmers

spending cuts. He urged them to

exceptionally warm summer season

included creating a financial plan

employ risk management strategies

since 1980 and nothing has come

that addresses risk management and

the

livestock

In a climate of unprecedented

in order to deal with volatility and

vigilant monitoring of that plan.

not to count on the government for

“Traditional farming is no

a substantial safety net.

“...good information fuels good decisions...”

“If you think Washington is

thinking for you, think again,” he said.

At the Kansas City event, Kansas State University Ag Policy Specialist

Barry

Flinchbaugh

Daryl Oldvader, CEO, FCS Financial

echoed that sentiment. “There will be a farm bill and there will be a safety net — but it’s liable to have

longer

traditional,”

Oldvader

told FCS Financial friends and customers.

Driven

more

by

economics, he observed that while there are about 2 million farmers in the country, 10 percent of them produce 90 percent of agricultural value. The changing farm landscape places new demands on farmers as well as their lenders and access to

bigger holes in it,” he said.

quality economic information is

one of the ways FCS Financial

Flinchbaugh called for sober,

fact-based discourse and cautioned

close to the 60 days of 100+ degrees

and its customers can meet those

that it’s time for the nation to get

back in 1936.

challenges.

its economic house in order. “We

need a reality check. We need to

2008, 2009 and 2010 have each

is available at the FCSF web site,

sober up and solve this deficit,” he

been 30 inches above normal on

www.myfcsfinancial.com. Go to

asserted. “We need real statesmen

a statewide basis. Since the 1960s,

the Online Tools link and click on

in Washington — with the guts to

Guinan has noted an upward

“Educational Materials.”

deal with Social Security, Medicare

trendline in the number of days

and Medicaid.”

with precipitation events as well as

University

of

Missouri

Climatologist Pat Guinan provided

Regarding

precipitation,

Content from the ag seminars

a slight upward trend in heavy rain events.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 9

9

7/6/2011 2:32:50 PM

youth in ag

Agriculture is more than meets the eye.

By: Heidi Varner, MU Graduate Growing up on a beef and grain production farm, I have seen first hand all of the hard work that goes into planting acres upon acres of corn late into the night to beat the approaching storm or feeding cattle, rain, snow or shine, 7 days a week. I have a great respect for this production part of agriculture, but when I left for college my plan was to design fashion magazine spreads or be the next big celebrity reporter.

I definitely didn’t see a place for myself on the farm because I couldn’t imagine driving a tractor or working with cattle. Now, 4 years later, my recent job search has really opened my eyes to all the opportunities the agriculture industry has to offer.

The intricate web of suppliers, financial advisors and marketing teams among others, all play into this business side of agriculture.

I think most college students I know have a misconception about what a college degree in agriculture can really entail. When I was deciding on degrees, I thought the agriculture school was all about how to manage a farm and how 10

to grow seeds with the best yields.

Little did I know that the College of Agriculture, Food, and Natural Resources at the University of Missouri alone offers over 15 majors ranging from education, to economics and even journalism.

Within an agriculture school it

“...my recent job search has really opened my eyes...” seems a student can be educated on any possible subject they are interested in and that subject can be related back to agriculture.

I just recently graduated with a bachelor’s degree in journalism with an emphasis on strategic communication, which is basically just a fancy way of saying advertising and public relations. Even within this field, there are entire advertising and communication firms that focus on promoting agricultural products. Which just goes to show that careers in ag can reach beyond the traditional ag majors as well.

For those students looking into choosing the path of their major, the job market outlook is usually a big factor. This is an advantage the ag

industry has over most. From what I can tell there is an abundance of jobs out there for qualified candidates and often times, not enough college graduates in the field to fill them.

A prime example of this is seed and pesticide research. Companies are developing new technology everyday to make seeds tailored to a farmer’s needs. To keep up with the demand, these companies are looking for new graduates to hire as scientists and researchers. Many students are getting science and biology degrees. However, when it comes time to decide which area to focus on, healthcare is often the first choice. So, there are positions open and no one to fill them, which is a good problem to have if you are a student looking for a career path.

Only 2% of the ag industry is actually growing crops and raising animals. The other 98% is the support system made up of salespeople, managers, biologists, lobbyists and many more. All of these careers are able to provide for producers and make agriculture one of the largest industries in the United States as well as around the world.

With the vast array of opportunities available, college students, with or without a farm background, have potential to impact the agriculture industry with their talents and education.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 10

7/6/2011 2:32:53 PM

Meet the 2011 FCS Financial Scholarship Recipients Through its scholarship program, FCS Financial has given more than $230,000 to FCS Financial customers’ children and grandchildren in the past seven years. We are proud to recognize and congratulate this year’s recipients. We hope they continue to find success in their education and future careers. The 2012 application will be available at www. myfcsfinancial.com on October 1, 2011, and is due March 1, 2012.

Eli Bartley of Fulton plans on attending the University of Missouri to major in mechanical engineering.

Megan Behring of Hunnewell plans on attending the University of Missouri to major in animal science.

Ben Brown of Appleton City plans on attending the University of Missouri to major in agricultural business.

Dylan Bussell of Rogersville plans on attending the University of Missouri to major in fisheries and wildlife sciences.

Mark Carpenter of Hardin plans on attending the University of Missouri to major in agribusiness management.

Andrew Cauthorn of Mexico plans on attending the University of Missouri to major in agricultural systems management.

Lauren Cofer of Rock Port plans on attending Missouri Western State University to major in nursing.

Ben Delaney of Baring plans on attending the University of Missouri to major in mechanical engineering and agricultural systems management.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 11

11

7/6/2011 2:33:06 PM

12

Nora Dodd of Leonard plans on attending the University of Missouri to major in agriculture education.

Shelby Esser of Blackwater plans on attending the University of Missouri to major in biochemistry.

Kaitlin Flick of Pleasant Hill plans on attending the University of Missouri to major in agriculture business management.

Sara Gillum of Unionville plans on attending the University of Missouri to major in pre-pharmacy.

Cody Gitthens of Cameron plans on attending North Central Missouri College to major in agriculture business.

Zachary Grossman of Tina plans on attending the University of Missouri to major in agriculture systems management.

Kara Hambelton of Gainesville plans on attending Freed-Hardeman University to major in pre-medicine.

Zachary Henderson of Emden plans on attending the University of Missouri Science & Technology to major in metallurgical engineering.

Ethan Huff of Reeds plans on attending Northeastern Oklahoma A&M College to major in agriculture.

Sadie Kinne of Eagleville plans on attending the University of Missouri to major in agriculture education.

Lauren Kliethermes of Bunceton plans on attending the University of Missouri to major in agriculture journalism.

Andrew Laut of Fredericktown plans on attending Mineral Area College to major in business management.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 12

7/6/2011 2:33:18 PM

Travis Luther of Lawson plans on attending the University of Missouri to major in ag economics and business.

Alyssa Mackey of Ozark plans on attending the College of the Ozarks to major in animal science.

Will Moore of Belle plans on attending the University of Missouri to major in ag business management and animal science.

Rebecca Neill of Purdy plans on attending Southwest Baptist University to major in communications.

Emily Paullus of Neosho plans on attending Missouri Southern State University to major in secondary education.

Dustin Stanton of Centralia plans on attending the University of Missouri to major in ag business management.

Jacob Stoll of Conception Junction plans on attending Northwest Missouri State University to major in ag business and minor in agronomy.

John Vogelsmeier of Sweet Springs plans on attending the University of Missouri to major in agriculture systems management.

Megan Voss of Union plans on attending the University of Missouri to major in biology/anthropology.

Zachery Watts of Sumner plans on attending Northwest Missouri State University to major in ag business.

Amy Zuroweste of Truxton plans on attending the University of Missouri to major in ag journalism/ management.

Not Pictured: Johnathan Blanchard of Lamar plans on attending the University of Arkansas to major in ag engineering. Kathryn Coon of Bethel plans on attending the University of Missouri to major in ag business & ag education. Dayne Voelker of Perryville plans on attending the University of Missouri to major in biology.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 13

13

7/6/2011 2:33:30 PM

dollars & cents

Economics: The Talk of the Town By: Dr. David M. Kohl

Everyone is talking about the

Growth

economy. The other day at Detroit

including Brazil, Russia, India,

Metro Airport, security guards

China, and, now, South Africa, has

were having a heated discussion

been spurred by the United States

about oil prices as I passed. I have

and world economic stimulus since

noticed parents are visiting about

the financial crisis in 2008. These

the federal debt at graduations and

countries comprise approximately

wedding receptions. Recently at a

20 percent of the world economy,

Dr. David Kohl energizes agricultural

YMCA in the Midwest during my

but just under 50 percent of the

lenders,

business

early morning workout, I overheard

world economic growth during the

persons with his keen insight into

a conversation focused on the

last decade.

the agricultural industry through

future of agricultural subsidies

extensive

and

and farmland prices by a bunch

He is

of elderly people. Yes, the global,

Professor Emeritus of Agricultural

national, and ag economy are top of

Finance

Business

mind. Let us examine the current

Management and Entrepreneurship

and future status of the dismal

at Virginia Tech, Blacksburg, VA.

science and draw some implications

Dr. Kohl has traveled over 8 million

to your business strategy.

miles in his professional career and

conducted over 6,000 workshops and

particularly the grain and row

seminars for a variety of agricultural

crop sectors are in the midst of

of the stimulus programs both in

audiences.

an eight-year super cycle.

For

the U.S. and abroad, along with a

involvement with agriculture and

historical reference, over the past

tightening of government economic

interaction with key industry players

100 years, there have been four

policy in China and some of the

provide a unique perspective into

super cycles created by market

other emerging nations may foretell

the future trends of the agricultural

demand, weather, and supply and

a slowdown of the economic bull

industry and economy.

demand imbalances. The typical

market for export commodities in

super cycle lasts two to three years.

agriculture.

This unusually long bull market has

been driven by five significant game

has been a major driver of grain

changers.

markets and the economic bottom

First, it has been driven by

line throughout the agricultural

the growth of emerging markets,

sector. One must be mindful of

specifically the BRICS nations.

the status of the subsidization of

producers

travel,

and

research,

exposure during his career.

14

and

Small

Dr. Kohl’s personal

of

these

countries,

The winding down

“...one could contend that this is an asset bubble...�

In the agricultural economy,

Of course, ethanol production

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 14

7/6/2011 2:33:30 PM

the

general

A

sound

economic

risk

this industry which is housed in

Concerning

the Energy Department of the U.S.

and global economic outlook,

management

government. Any changes in policy

moderation of growth with extreme

executed on the revenue side, the

due to budget shortfalls can have a

volatility created by economic

cost side, and the interest rate

large impact on agriculture, both

“black swans” or unusual events

side of the business will not be an

on the grain and livestock side.

will be ever- present on the

option, but it will be a requirement

Factors such as the weak dollar

economic radar screen into the

in a global economic environment

and historically low interest rates,

future. Managing for opportunity

with a surprise around every corner.

along with weather issues in major

created by these events will be a top

The economy has everybody talking

production centers in the U.S.

priority for agricultural producers.

about a lot of things, but few are

and abroad can impact supply and

This will require prudent business

doing anything about it. Successful

demand balances and continue to

strategies such as knowing the cost

producers use the HUT Principle:

support a bullish, but very volatile,

of production by enterprise and

hear, understand, and take action!

market for agriculture.

testing “but what if ” scenarios in

These game changers have

revenue and cost.

program

that

is

been capitalized into land values and cash rents particularly in the Will the land value rush continue?

Rates Remain Stable

Appreciated land values and cash

The 30-day vs. 15-Year Farm Credit Bond chart below illustrates that

rents are presently creating a false

30day issues have remained at historically low levels for the last two years

sense of security in many producers’

and 15-year issues continue to stabilize. The gap between short-term rates

financial statements. Quite a few

and long-term fixed rates remains wide and actually grew slightly over the

producers are cash purchasers of

last six months.

Midwest

and

upper

Midwest.

land and long term contracts on 30-Day vs 15-Year Farm Credit Bond

farm rent with little borrowed capital, which is indicative that this

10.00

is not a credit bubble like the 1980s

9.00

or the recent financial crisis that

8.00

hit commercial and residential real

7.00

estate. However, one could contend

6.00

by the aforementioned domestic and global economic fundamental game changers. For producers who

All-in cost

that this is an asset bubble, driven

15-year Farm Credit

5.00 4.00 3.00

are in a growth mode, prudent debt,

2.00

cash, and liquidity management

1.00

strategies

0.00

agricultural

are

imperative

marketplace

in

Fed Funds Target

30-day Farm Credit

that

appears to be at the top of the cycle.

Date

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 15

15

7/6/2011 2:33:32 PM

life is simple We are pleased to offer Jerry Crownover’s “Life is Simple” column. Jerry is a graduate of the University of Missouri. He and his wife, Judy, own and operate a ranch west of Springfield and are FCS Financial members.

We hope you enjoy Jerry’s Ozark humor and wisdom.

“Life is Simple” Copyright 2010, Jerry Crownover

I tried to make cowboys out of both my sons. Honestly, I really did.

As soon as my first son, Seth, was out of diapers, he would ride along with me every afternoon to the farm.

I was still teaching school and we lived on five acres on the west side of town, but owned a farm about fifteen miles from there. As soon as I arrived home each afternoon, Seth would be ready to “go check the cows,” and we would load up in the pickup truck and head to the farm.

Every cow seen with her tail sticking out (even if she was just relieving herself ) would be evaluated by Seth as, “Dad, I think she’s gonna calve tonight.” He would supervise, from the cab of the truck, concerning how many bales of hay I should put out or whether they needed the mineral feeder filled. I concluded that he would surely become a farmer.

16

Each Tuesday night, I’d dress him up in his hat, boots, and duster and we’d head to the only nightly livestock sale in the country. He would take in all the sights, sounds, and smells of the auction barn. The trip home would always find me serenaded by his chants and bid-taking as if he were the real auctioneer. Oh well, if he couldn’t make an honest living farming, maybe he could become an auctioneer.

Then Zach, the second son, came along and he showed even more interest in the cattle than Seth had. He was raising bottle calves by the time he was three and showing heifers at the county fairs by the time he was seven. Zach was calmer and quieter with the show calves than Seth, and the animals responded appropriately with intense bonding and affection between calf and boy.

Both boys were active in 4-H with both of them serving stints as President of the local club. They both showed their heifers at every county fair in south Missouri, the Ozark Empire Fair, and the State Fair numerous times and they both were fortunate enough to have shown Grand Champions at each of the above. Seth won state public speaking in 4-H while Zach was the state winner in FFA Creed speaking.

Zach also was President of his FFA Chapter and received the State Degree. Needless to say, because of their heavy involvement in these groups, I always assumed they would either farm or find careers in some field of agriculture—just like their dad. Was I ever wrong!

Seth is in Ireland, finishing up his PhD in philosophy and beginning to apply for openings at universities across the country to become a professor. Zach just graduated with his BA degree and has been accepted into graduate school at the University of Mississippi to study— you guessed it—philosophy. He, too, wants to go on and get his doctorate and become a professor of philosophy.

I took one course in philosophy during my college career and thought it had to be the biggest waste of time and money in my entire educational experience. Nothing in philosophy made any sense to me and I often wondered what kind of person would want to devote their entire life to the study of such nonsense.

But, both my sons love it.

I’ve often said that I am lucky enough to never have to ‘work’ a day in my life because I love what I do so much, it never feels like work. Seth and Zach both feel this way about the field of philosophy, so I support them and wish them well in their chosen field.

I do, however, take great pride in knowing one thing; In a few short years when they are both professors of philosophy at some prestigious university, I feel fairly certain that they will be the only two professors of philosophy in the entire United States that are also adept at the skills of artificial insemination and rectal palpation.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 16

7/6/2011 2:33:33 PM

Claims cannot be worked or adjusted by your insurance companies until

Wheat Sales Closing is September 30 Insure your new wheat crop with an MPCI policy

insurance company. It is of the utmost importance that you report to your

Please contact your agent for any of the following actions regarding wheat sales:

local FSA office as soon as possible if you have completed crop planting.

•

New Application

Your crop insurance agent needs your 578’s and maps to check and support

•

Coverage level/price election changes to existing policy

•

Add a County

Discover damage to your crop insured by an MPCI policy? You must notify your agent to turn in a claim within 72 hours ( 3 days).

•

Transfer/Cancellation

•

Entity/Marital Status changes

•

Request for Actuarial Change

Damage throughout the state.

Blame the hail.

To ensure accurate premium quoting, please report 2011 wheat production as soon as possible.

MPCI acreage reports have been turned in and processed by your agent and

the processing of your MPCI acreage reports due July 15th for your crop insurance policy.

In a matter of minutes your crops can be severely damaged by hail and many have been in 2011. Hail is one of the most common weather conditions that can threaten your crops and your livelihood. It can wipe out part of a field, damage a few acres here and there or totally devastate an entire crop.

Crop hail insurance is a great option to help supplement your Multi-Peril Crop Insurance (MPCI) policy and overall risk management plan. It’s not too late to purchase a policy. Contact FCS Financial today and let one of our agents help you with your coverage needs. With potential crop insurance income per acre at all time highs, a few extra dollars for hail insurance may be your cheapest crop cost per acre.

n eo g era ges? v ) co ora PRF ( d e f rag y nee our , Fo db d n ase y a l h e c r g n . pu , Ra be e 011 r t s u 2 t u , s a 0 P ce m er 3 ran b u s m in te

Sep

risk management

urgent: Do you have an MPCI claim pending or anticipate turning one in due to flooding or other crop damages?

Important Dates to Remember July 1 Premiums/fees due for fall planted crops July 15 Acreage reports due for all spring planted crops

Reports must be completed, signed and received by your agent by this date.

September 30 Sales Closing date for fall wheat Sales Closing for PRF October 31 Premiums due on spring crops October 31 Final plant date for wheat (15-day late plant through Nov. 15) HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 17

17

7/6/2011 2:33:34 PM

WHY LIFE INSURANCE?

If someone depends on you financially, chances are you need life insurance.

Current & future financial obligations

Existing resources including = survivors’ earnings, savings, investments (minus) (equals) and life insurance already owned.

—

Life insurance needed

Life stages or events that may trigger the need to review your current life insurance plan include: •

Marital Status

•

Having children

•

Becoming a new homeowner

•

Changing jobs

•

Purchasing a farm or other real estate

•

Becoming involved in a family partnership or corporation

•

Planning retirement or recently retired

•

Taking on additional debt

news briefs

Find out how much life insurance you need by contacting FCS Financial for a free Life Insurance Needs Assessment. Call 1-800-444-3276 or visit www.myfcsfinancial.com for the agent nearest you.

attention: online banking users Changes coming soon Online banking is an important feature for customers especially those who work off the farm, need to transact business after hours or just want to manage their accounts electronically. For the past year, FCS Financial has been updating and enhancing our online banking program as a way to provide Focused. Customized. Solutions.™ Recent enhancements include a fraud analyst tool and a new authentication process. Watch for a fresh look and easier navigation next year.

After the most recent enhancements are complete, it will be important for all existing online banking users to

visit our website at www.myfcsfinancial.com to login in to their account. New security features forced a change in our web address for online banking. To activate and use the new online banking address, visit www.myfcsfinancial.com and click on the Login button. If you have the site bookmarked on your computer, please delete the bookmark and login through www.myfcsfinancial.com. Those who have not used online banking in the past can click on the Enroll button at www.myfcsfinancial.com to use the system. If you have questions, please email FCSFOLB@myfcsfinancial. com. Additional information will be sent by mail to online banking users when the enhancements are effective.

Protect your online identity When conducting any transactions online, you should be aware of identity theft. To help protect yourself, make sure your computer has current antivirus software enabled, look for https in the browser of transaction sites (“s” indicates a secure site), and type in web addresses rather than clicking on links. This is especially true when the link is sent to you through an email. FCS Financial will not use email to request personal information. If you receive any emails from FCS Financial that appear suspicious, call your local office at 1-800-444-3276 to verify the content of the message.

18

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 18

7/6/2011 2:33:34 PM

Our iPad Winners!

A big thanks to all who updated or verified their email address during FCS Financial’s iPad giveaway promotion.

The winners of the three iPads were (clockwise

from top left) Bonnie “Boot” Bohon, Windsor, Mo., with Brian Zimmerschied, FCS Financial; Sam (left) and Jean Thomason, Holden, Mo., with Doug Meyer, FCS Financial; and Steve Goslee, Mtn. Grove, Mo., with Michelle Luebbering, FCS Financial Express.™ Congratulations!

Supporting Missouri’s communities As a cooperative, FCS Financial is dedicated to serving rural communities in Missouri. Throughout the year, we receive many requests to support various causes. While we can’t donate to every cause, we have recently donated $1,000 to the relief efforts in Joplin; paper goods to all 4-H clubs in our service area; plaques, dinner and paper goods to the FFA state convention activities; cash to local food banks; and are sponsors of the 4-H Legislative Academy and several Missouri State Fair activities. Additionally, we provide scholarships and support most ag events in the state through monetary donations and human resources. Our past is rooted in rural Missouri and our future is committed to seeing it grow.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 19

19

7/6/2011 2:33:40 PM

Missouri agriculture is working to educate consumers about modern farming through a dynamic campaign with the St. Louis Cardinals.

“SAFE at the Plate” reminds consumers of the delicious, nutritious and affordable food provided everyday by Missouri farmers and ranchers.

For many Missouri farmers, farming is more than a chosen profession—it is a commitment to caring for their animals, preserving the land and giving back to their communities.

Meet more Missouri farmers and register to win $500 in free groceries at MoFarmersCare.com.

For official rules and to enter, visit MoFarmersCare.com. Must be a Missouri resident and 18 years old at time of entry. Contest ends 8/31/2011. Void where prohibited.

Sponsors:

Pictured: Kneeling: Gage and Galt Porter. Second Row (left to right) Mary Bonacker, Rachelle Chinn, Chris Chinn, Connor Chinn, Grey Porter, Cindy Heins, Sarah Heins. Back row: Stanley Bonacker, Paul Heins, Kevin Chinn, Matt Holliday, Gary Porter, Lori Porter, Chris Heins, and Benjy Heins.

8x10ad.indd 20 1

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 20

6/14/11 11:26 AM

7/6/2011 2:33:47 PM

Artist’s rendering of future office.

FCS Financial hosted a groundbreaking ceremony on Friday, May 27, 2011, to celebrate the construction of their new retail facility in Macon. More than 50 people attended the event including local dignitaries, Macon Chamber of Commerce members, FCS Financial directors, customers and employees.

“As Missouri agriculture adopts new technologies and techniques, FCS Financial strives to provide our customers

the best products and service,” said Daryl Oldvader, CEO of FCS Financial. “Our first priority has always been our customers and this new Macon facility will allow us to provide Focused. Customized. Solutions.™ to producers across Northeast Missouri.”

The new Macon

retail facility located at the corner of HBC Road and US Hwy. 63 will serve as a home for Kirksville, Shelbina

and

Memphis customers and

employees.

Weather permitting, construction will be completed by December 2011. Customers will be notified in advance of the actual move date.

planning of future sites continues FCS Financial continues moving forward with additional office construction and consolidations that were announced last year. A lot in Columbia has been purchased and construction is expected to begin in September.

The search for a site in Springfield is just beginning while lot acquisition activities have temporarily been placed

on hold in Joplin. Discussions will be re-engaged with the Realtor once we get a little further beyond recovery from the tragic tornado that devastated the area recently.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 21

21

7/6/2011 2:33:56 PM

Incumbents, New Directors Elected

michael l. bruce

james davis

Through a mail ballot,

the stockholders of FCS

incumbent whose area of

counties. He and his

since 2002.

Financial elected Michael

representation includes

wife, Leslie, have three

L. Bruce, Nevada, Mo.;

Bates, Camden, Cass,

children. He raises alfalfa

director whose area of

James Davis, West Plains,

Cedar, Henry, Hickory,

and has a beef-cattle/

representation includes

Mo.;

Peterson,

Johnson, St. Clair, and

cow-calf

Iron, Jefferson, Lincoln,

Trenton, Mo.; and Rick

Vernon counties. He

Davis

Rehmeier, Augusta, Mo.,

and his wife, Connie,

McClellan who retired

Charles, St. Francois, St.

to serve on the Board

have

children

from the board after

Louis, Ste. Genevieve,

of Directors for three-

and six grandchildren.

serving as a director for

and

year terms. They were

His farming operation

15 years.

counties, and the City

installed at the Board

consists

of

meeting on Wednesday,

soybeans,

corn,

June 22, 2011. FCS

lespedeza. Bruce also

whose

Financial

provides

is

bruce

three

an

wheat,

Shannon,

rick rehmeier

and

Texas

operation. replaced

Gene

a member of the board rehmeier

Madison,

is a new

Perry,

St.

Washington

an

of St. Louis. He and his

director

wife, Benita, have two

of

children. Rehmeier is a

has a cow-calf operation.

representation includes

fifth generation farmer

financial

He has been a customer

Carroll,

Chariton,

raising corn, soybeans

services to agricultural

for 39 years and a board

Grundy,

Linn,

and wheat as well as

producers, agricultural-

member since 2002.

Livingston, Mercer, and

20,000 head of hogs

related businesses and

is a new

Sullivan counties. He

marketed

rural

The

director whose area of

and his wife, Barb, have

Rehmeier replaced James

board

representation includes

three children and two

Schulze who retired from

consists of 15 members

Crawford, Dent, Howell,

grandchildren. Peterson

the board after serving

and has 12 areas of

Oregon, Ozark, Phelps,

operates a dairy and

13 years.

representation.

Pulaski,

raises hay. He has been

credit

FCS

22

Brian

brian peterson

and

residents.

Financial

davis

and

Reynolds,

is

peterson

incumbent area

annually.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 22

7/6/2011 2:34:00 PM

nivens’ notes

Greetings from the Board Room:

I hope that you had an opportunity to take advantage of some of the

educational opportunities FCSF offered earlier this year. From the attendees that I visited with, the response was quite positive. At first glance, these presentations can be expensive, but I’ve got to think that a better educated and more aware member will be a better borrower and a more capable user of the financial services offered by FCS Financial. If you didn’t make one of the seminars, or you are like me and can always benefit from a little reenforcement, visit the web site and read what each of speakers had to offer.

All of the FCSF membership has been provided an educational

opportunity with the current election of directors. In an effort to put all

James Nivens, Chairman of the Board

associations of the Farm Credit System on a similar election format, the regulator required that the elections be held using a cumulative vote. As there were four positions to be filled, each eligible voter had four votes that could be cast in any combination for any of the candidates. Hopefully, this will help satisfy one of the often heard comments about our elections – some voters just weren’t comfortable voting for someone they didn’t know. With this method you could cast all four votes for one individual. I’m curious to see if this increases member participation in the election and how the votes are distributed. In my tenure as an elected director, the only prediction I’m willing to make is similar to predicting the weather or markets – what appeared to be clear pattern last year, will have absolutely no bearing this year.

One definite outcome of this election will be the loss of two long time board members. Both Jim Schulze and

Gene McClellan have chosen not to run for re-election. Jim at one time has been a vo-ag teacher and served as our un-official parliamentarian. With his help and guidance, the meetings had less the appearance of trying to herd cats.

Gene stepped up the past two years and served as our PAC chair. In this day a necessity but not a task that everyone has a desire to handle and he did it willingly. Thank you gentlemen very much for your service and dedication

After the director election, there is always something of a change with the formation of a new board. There

will be at least two new members to welcome, new committee assignments, and can always be a change in board leadership. There will only be two remaining elected members with board experience in the prior associations and at least half of the elected members with two years experience or less. Tenure is certainly not an issue for a couple of reasons. The new board members have some exceptional abilities and the training process is much more extensive and in depth than what Jim, Gene, and I experienced several years ago.

A new board, new organizational changes, and new building projects. One thing that remains the same is FCS

Financial’s goal to be the lender of choice to Missouri agriculture.

HEARTBEAT | SUMMER 2011

FCSF 2011 Summer HeartBeat.indd 23

23

7/6/2011 2:34:03 PM

PRESORT STANDARD U.S. POSTAGE PAID JEFFERSON CITY, MO Permit No. 210

Focused. Customized. Solutions.™ For who you are. For what you do.

FCS Financial is introducing Focused. Customized. Solutions.™, a new approach to service that brings the right resources to you.

It’s the loans, financial services and local expertise you trust, all designed with your specific needs in mind.

Your financial needs and your neighbor’s needs aren’t the same. So why should your service be? We match you with a team of experts and financial options that fit your type of operation. We don’t think you should have to bend over backwards to get the financial support you deserve. That’s our job.

We are Focused on your success in order to provide service, loans and financing Customized to your needs. And, in the end, to deliver Solutions that help you grow for years to come. Visit us at myfcsfinancial.com, call 1-800-444-3276 or stop by any FCS Financial office for Focused. Customized. Solutions.™

Focused. Customized. Solutions is a trademark of FCS Financial, ACA. FCS Financial is an Equal Opportunity Provider. Current life insurance carriers available at myfcsfinancial.com.

FCSF 2011 Summer HeartBeat.indd 24

7/6/2011 2:34:09 PM