GreenStone FCS
Summer 2016
Promoting the business success of our customers and the rural community
Wisconsin CSA Michigan Winery Follows A Dream
COMMEMORATING
FARM CREDIT
SUMMER 16 7 YBSF Feature. Creighton and McKenzie Gallagher bought a piece of the family Traverse City cherry orchard in 2010. Two years later, they converted part of it to wine grapes, and this May opened their tasting room showcasing their first five wines.
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21 GreenStone Story. July, 17 2016,
31 Tax Feature. Imagine filing your
marks the 100th anniversary of the Farm Credit System. As we reflect on our past and consider the future, it is easy to see how times have changed.
annual tax return, only to discover someone has already filed fraudulently on your behalf! Take these steps once you learn of an identity breach.
27 Country Living Feature. Tom and Nancy Kellner operate Kellner Back Acre Garden from a storefront on their property.
35 C rop Insurance Feature. If you do find yourself in a claims situation, there are some important things to remember that can help the process go a lot more smoothly.
3 CEO Comments. President and CEO, Dave Armstrong, highlights a century of farm credit and recent System developments in Washington, D.C.
30 Health and Wellness. Remembering four simple principles can help ensure no one falls victim to foodborne illnesses this summer.
5 Guest Column. For a family business to function effectively over time, each system must understand how to interact with and support the other systems.
33 Guest Column.
11 Market Outlook. Bob Utterback addresses big uncertainties in supply, and other key market issues. 23 Legislative Matters. Last month’s Farm Credit centennial celebration in Washington, D.C., was successful in creating a heightened awareness of the importance of the Farm Credit System. 24 PAC Progress. The election year is in full swing and many things are yet to be seen, but the agriculture support team continues to grow and develop, and solve challenges. 25 Directors’ Perspective. Three board directors reflect on a century of Farm Credit and share a bit of their own history.
In this new environment of lower commodity prices, which many experts believe may extend for several years, producers will need to wring every bit of efficiency out of their operations for long-term success.
38 Careers. Starting this fall, Jackson College will offer a new program focusing on agriculture education.
10 Where Are They Now 13 Open Fields Blog Brief
Editor’s Note: Celebrating our past, looking forward to our future… I recently participated in GreenStone’s leadership team planning meeting, and amongst the abundant idea generation and specific action planning, we also recognized a few retiring leaders. As you’ll read later in this publication, each leave a legacy of 36 years of service. On top of that, we also celebrated the work anniversary of your President and CEO, Dave Armstrong – 35 years! And “Behind the Scenes” in this issue also features two additional employees, who are each nearing the 40 year mark with GreenStone. Imagine the impact each of these individuals, and so many others, have had in getting us to this 100th anniversary! I feel extremely fortunate to be a part of this milestone, but also to work alongside this diverse 500 person team, who bring fresh views and historical perspective to our members each day. The way we meet your needs is no different. We continue to evolve, yet hold on to that same dedication and responsibility. The customer features in this issue showcase the diversity of our members; our Farm Forward Mentorship program highlights one of many ways we are working to support you all. We are enhancing technology to meet your needs, and supporting our agricultural youth in their quest to achieve more.
17 Scholarship Winners
This publication, just like the two before it this year, is full of more stories and information like these, because we are honored, humbled, and thrilled to be able to commemorate this 100 year milestone with each of you, our members. We are also eager to showcase our commitment to you for the next 100 years!
18 Pause for Applause
Congratulations, and thank you!
14 Member News 16 Calendar of Events
19 Behind the Scenes 19 Candid Comments
This newsletter is published quarterly for the customers of GreenStone Farm Credit Services.
20 GreenStone Interns
Partners 3515 West Rd. East Lansing, MI 48823
29 Building A Campfire 29 Commodity Cuisine... Skillet Corn Bread
517-318-2290 marketing@greenstonefcs.com Let’s Be Social
32 Tax Calendar 36 Crop Insurance Calendar 37 Crop Insurance News 38 Tech Tip
Connect with us online for news and updates.
CEO Comments:
It’s our 100th Anniversary! A CENTURY AGO, ON JULY 17, 1916, THE NATIONWIDE FARM CREDIT SYSTEM WAS CREATED, OF WHICH GREENSTONE FARM CREDIT SERVICES IS A PROUD MEMBER. THIS IS A SIGNIFICANT MILESTONE AND SOMETHING ALL OF US, WHETHER YOU ARE A CURRENT MEMBER, FORMER MEMBER, EMPLOYEE, RETIREE, OR ANYONE IN RURAL AMERICA, SHOULD TAKE STOCK IN!
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While we are anxious to shape and experience our future, our history has built our foundation and must also be remembered. In February of 1917, the U.S. Treasury invested $8.9 million to complete the required capitalization of the System, which is about $70 million in today’s dollars. This was the “seed money” used to launch this radical new venture whereby the nationwide system of banks and associations would not only provide credit to farmers, but allow them to be the System’s owners as well.
In more recent times, the 1980s tested the System like no other period in history. With a growing market share of the agricultural debt, coupled with a “perfect storm” of economic events that decimated many farm businesses at that time, the System became essentially insolvent. Through a number of selfhelp measures and additional government financial support to shore up System capital levels, Farm Credit emerged stronger. We are better prepared to face the future financial “storms” a cyclical business like agriculture will inevitably experience.
Much of this initial capital was repaid in the 1920s, but additional government assistance was necessary in the depths of the Great Depression of the 1930s. Between then and 1968, this government capital was also fully repaid, with interest, and the Farm Credit System was completely borrower-owned!
Since then, we have continued to grow and have evolved to meet the dynamic demands of a modern agricultural industry and the rural communities that depend on agriculture for their survival. Loans for residential housing in rural areas, as well as rural telecommunications and electrical cooperatives, are just a
Summer 2016 — Partners
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his is a significant milestone and T something all of us, whether you are a current member, former member, employee, retiree, or anyone in rural America, should take stock in!
few of the authorities Congress has given the System over the years to ensure we continue to be a competitive, dependable, and consistent source of credit to rural America. This is a very special time for the Farm Credit System and GreenStone alike. As members of your cooperative, you should feel secure knowing this organization has weathered many storms over the past 100 years, including two world wars, the great depression of the 1930s, the agricultural “depression” of the 1980s, and more recently, the collapse of the global financial markets in 2008-2009. The next 100 years will likely present challenges none of us could even imagine today. However, your association, and the entire System at large, will be here to provide farmers and rural communities with the dependable, competitive, consistent, AND responsible source of credit and other financial services they will need to successfully compete in the next century. U.S. Senate Hearing: The Farm Credit System: Oversight and Outlook of the Current Economic Climate In May, I attended the Senate Agriculture Committee hearing in Washington D.C., the first held in the last ten years focused on the Farm Credit System and the current state of the agriculture economy. The purpose of the hearing was to provide lawmakers with an update on the System and the financial health of the nation’s agricultural economy (both the Senate and House Agriculture Committees have oversight responsibilities for the Farm Credit System, due to its government sponsored enterprise status (GSE)). I found it unfortunate that the hearing, at times, was instead used as a means to “assault” the Farm Credit System by the Independent Community Bankers Association (ICBA) and the American Bankers Association (ABA). For years, commercial bankers, through their lobbyists, have accused the
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Farm Credit System (similar to their attacks on credit unions) of having a number of unfair marketplace advantages which prevent them from competing for farm loans on a “level playing field.” Interestingly enough, the most recent USDA figures published indicate commercial banks and Farm Credit have nearly an equal market share of agriculture debt, each having just a smidge over 40 percent. Could the real truth be they feel threatened by our member-owned model of delivering a dependable, competitive, and responsible source of credit to rural America and do not want any competition? Regardless of their reasons, they inaccurately cite things like preferential tax treatment, mission creep, access to GSE funding, reckless lending practices, and the list could go on. Sadly, the banking lobbyists and their members spend millions spreading these lies and half-truths to Congress to achieve their ultimate goal of eliminating the System - their competition! Never mind the fact commercial banks have many of the same tools available to them Farm Credit institutions have, plus many more, what do you think interest rates to farmers would be if the Farm Credit System did not exist?
significant personal risk in terms of possibly not getting his crops planted on time) and go before the Committee to tell his story about getting started in farming and the role his Farm Credit association, GreenStone Farm Credit Services, has played in the success of his business. Jed Welder, of Greenville, Michigan, stood up for the nearly 500,000 Farm Credit members across this country to tell the Committee that agriculture needs a strong and dependable Farm Credit System. I want to take this opportunity to publicly thank Jed for his courage to face a panel of U.S. Senators and not waiver one bit, nor be intimidated in delivering his remarks. His testimony was the highlight of the hearing and only reinforced what I have always known about many of those who are Farm Credit members: they are smart, articulate, loyal, honest, and courageous people who make American agriculture the envy of the world! You can read more about Jed and his testimony on page 23 of this Partners magazine. While it appears this most recent skirmish with the banking lobby went our way, we must never be complacent. It is important to recognize that your member-owned and controlled association has adversaries who will stop at nothing to achieve complete market place domination. We will likely need many more “Jeds” to be willing to step up and defend their Farm Credit association in the years to come, if a 200th anniversary is to be achieved! I hope you enjoy this 100th anniversary issue of Partners, and as always, feel free to contact me.
Instead of disparaging Farm Credit, I ask why don’t the banks unite with us to encourage lawmakers at a Federal, and even state level, to adopt legislation that helps farmers and rural America instead of picking unproductive fights? Stay tuned for more on this issue - it will be very interesting to watch the trajectory of their rhetoric as the agriculture economy continues to deteriorate. Despite the bankers attempts to create mayhem for the System on its 100th anniversary, a ray of sunshine did appear at the hearing. The System was fortunate to have one of its members who was willing to get off his tractor during planting season (taking
Dave Armstrong
517-318-4105 dave.armstrong@greenstonefcs.com
Partners — Summer 2016
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Family Business:
Good Fences Make Good Neighbors By Barb Dartt, DVM, MS IN THE COUNTRYSIDE WHERE MY CLIENTS LIVE, UNDERSTANDING WHY “GOOD FENCES MAKE GOOD NEIGHBORS” IS PRETTY CLEAR. WELL MAINTAINED FENCES DEMONSTRATE RESPECT FOR OTHERS’ PROPERTY AND RESOURCES. OFTEN, THE PROPERTY AND RESOURCES THAT THE NEIGHBORS UTILIZE TO MAKE A LIVING. APPLYING THE ADAGE TO THOSE SAME CLIENTS’ FAMILY BUSINESSES ISN’T THAT HARD…IN THEORY. MOST FOLKS INSTINCTIVELY SEE THAT BOUNDARIES MAKE FOR BETTER RELATIONSHIPS. IN PRACTICE, HOWEVER, THE LACK OF THOSE WELL MAINTAINED “FENCES” REGULARLY UNDERMINES THE TRUST AND FUNCTION WITHIN FAMILY OWNED BUSINESSES.
The Three-Circle Model of the Family Business System (Figure 1) was developed at Harvard Business School in 1982 and continues to be the central organizing framework for understanding family business systems. The diagram represents three interdependent and overlapping systems in a family enterprise: family, ownership and business. For a family business to function effectively over time, each system must understand how to interact with and support the other systems. In addition, people within each system should appreciate which decisions are theirs to make. This simple guidance becomes very challenging to implement when your boss (Business System) is also your dad (Family System). And he happens to be a 50 percent owner as well (Ownership System). Some “fences,” a.k.a., guidelines or policies, that govern the Ownership,
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Summer 2016 — Partners
Business and Family systems are more valuable to have than others. These fences tend to be worth the investment it takes to build them, simply because the issues they address arise so commonly. The lack of fences for these issues leads to hurt, confusion, lack of engagement, bitterness, erosion in family relationships and lack of efficiency within the business. Here are two key “fences” you should build and maintain early in the life of your family business. Fence #1 – Family Employment Guidelines
This issue sneaks up on most family businesses – many have a family member employed even before they even think of themselves as a family business! Family employment guidelines explain how the business will hire and compensate family members. They also set expectations for the
performance and behaviors that family members need to deliver to the business. To be most effective, these guidelines should be shared with family members early - before any next generation folks are hired on. Here are some question to answer as you develop your guidelines:
The Three-Circle Model:
• Define the purpose. Why are you developing this guideline?
OWNERSHIP
• Who does the guideline apply to? What is the definition of family? • How will the hiring decision be made? • Under what conditions (if any) will a position be created for a family member? • What qualifications are required? Include details around attitude and behaviors, education, work experience and skills. • What factors will determine the level of compensation?
FAMILY
BUSINESS
Fence #2 – Family’s Homes are Owned Personally (NOT by the Business)
I once met a family at their kitchen table to discuss business planning needs. They had a newer, modern house in a nice location on the farm. It was January, and bitterly cold. We became distracted by the noise of the chilly wind, blowing the plastic sheet positioned across the archway to a half-completed addition. I asked about the construction—when would it be completed? “Well, we thought it would be finished by now. The business owns our house and I thought my two brothers (the man’s partners) were on board with the investment in our house. But we got half done and one of them decided that we’d gotten a garage built just a couple years ago, so the business shouldn’t be spending the money on our addition right now. I’m not willing to put our own money into a business asset. So I don’t know when it will get done.” The man was fairly even in his tone. His wife had begun crying during his explanation. Every time I have observed personal residences owned by the business, conflict and hurt feelings have ALWAYS resulted. Creating a healthy boundary by ensuring family members working in the business own their own home can be difficult. Often, farm homes are hard to value because they are on property integral to the operation. But there are lots of ways around this—use twice the SEV and agree that, if the family member leaves the business
igure 1. The Three-Circle Model of the Family F Business System by Renato Tagiuri and John Davis
(or moves to a new house), the business will buy the house back from them, at a value determined in advance. Create a limit around what the business will buy back – likely any improvements should be purchased at net book value and perhaps an annual cap on house investment should be set. If the new homeowner wants to put granite countertops in the 1935 farmhouse that sits 50’ from the road and 25’ from the main farm driveway, they can make that choice. But they may not get full value back when the time comes to sell. And knowing that tradeoff AHEAD of the countertop choice can prevent hurt feelings. This is a great example of drawing lines that are as clear as possible around what decisions belong within the Business and which belong within the Family Systems. There is no “right” answer on how you balance each system’s needs. Sort it out through discussion and find an approach that fits for your family business. Developing guidelines or policies can feel overly formal—especially when you start early enough that your family business
doesn’t yet face the boundary challenges. But fences take time to build. And you certainly wouldn’t wait to construct them until you turned the cows out in the pasture. Thoughtful, fair policies that are well communicated can help build “great neighbors” that add to the enjoyment of working and owning with family.
ABOUT THE AUTHOR
Barb is a consultant with the Family Business Consulting Group, working with families and management teams to help them keep their business healthy and the people happy. Barb can be reached at 269-382-0539 or dartt@thefbcg.com
The opinions stated herein are not necessarily those of GreenStone Farm Credit Services. Partners — Summer 2016
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Following a Dream By Jennifer Vincent Kiel
HOW DOES A YOUNG RUGBY PLAYER WITH A BACHELOR’S DEGREE IN ACCOUNTING COME TO BE A FARMER AND WINERY OWNER? IT’S A STORY DERIVED IN A DREAM, BUT ROOTED IN DETERMINATION, DRIVE AND PERSEVERANCE. AND, OF COURSE, NO GOOD STORY WOULD BE COMPLETE WITHOUT A YOUNG WOMAN TO INSPIRE AND FOSTER THE VISION.
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Summer 2016 — Partners
Encouraged by his father to pursue a career outside of agriculture, Creighton obtained a bachelor’s degree in accounting from Grand Valley State University and went to work coordinating logistics of fruit. It was corporate America, and he had cozied into a stable job working in a cubicle. It was comfortable, but not compelling. It was the game of rugby that would connect Creighton with what really piqued his interest. On the field he met Coenraad Stassen, who also likes to play rugby but loves to make wine. Stassen, who spent 10 years making wine in South Africa and 12 years
in the U.S. and is nationally recognized with more than 450 awards, is the winemaker at nearby winery on Old Mission Peninsula. Creighton was fresh out of college and Stassen needed some help in the winery. Creighton started working in the cellar and then the tasting room. “I was just fascinated with the whole process and the art of making wine,” Creighton says. “From vine to glass, it was full circle and that was very interesting and exciting to me.” Creighton’s passion for growing grapes to make wine might have remained a dream had it not been for a special woman.
The low-interest, and limited interest-only Young Farmer loan through FSA, combined with the working cherry revenue, helped the Gallaghers ease into this capitalintensive venture. The Gallaghers currently utilize GreenStone for their operating line of credit and Creighton rents equipment from his father.
Shared Dream
McKenzie Hartman had moved back to the area after getting her bachelor’s degree in sociology. She would later get her masters with her thesis on a business plan for a winery. Creighton and McKenzie had met years earlier. “One of his brothers dated my sister,” she explains. “And they were always trying to get us together.”
After a couple years of soil building, nine varieties of grapes were planted on 15 acres in 2012. “We are transitioning cherry orchards to wine grapes,” Creighton says. “We have plans for 10 more acres (of grapes) in the next three-to-five years.”
Their first date was at a wine tasting dinner at the Boat House Restaurant hosted by a local winery in 2008. “Creighton always talked about raising grapes and opening a winery. But, we were 25 years old and thought it was a pipe dream,” McKenzie says.
Not all Rosy
They married in 2010 in what McKenzie calls, “a big, Catholic, Irish wedding with bagpipes and all.” Their home is on a 14-acre plot where both Creighton and his father had grown up.
If there’s one thing that’s certain in agriculture, nothing is guaranteed. In 2012, the entire cherry crop was lost to frost. “We had been farming just two years, so this was devastating,” McKenzie says. “It was a significant loss of working capital.”
It was also the year that Creighton’s father approached him about buying 80 acres of tart and sweet cherries. “There was a block of old trees that needed to be removed. It was like the stars aligned,” McKenzie says. “We could envision a vineyard.”
In 2014 and 2015, the grapes took back-to-back hits from harsh winters. “The Great Lakes froze and, with temperatures at negative 20, we lost vines and it damaged cherries,” Creighton says.
The couple started working with the Farm Service Agency for financing. “We had to seize the moment,” Creighton adds.
With plans underway to build the winery, “It was a very critical time for us,” McKenzie adds. The couple utilized as many government programs as they could to help with the losses and rebuild.
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I was just fascinated with the whole process and the art of making wine... “From vine to glass, it was full circle and that was very interesting and exciting to me.
Despite the setbacks, the Gallaghers remained committed to their plan to establish a tasting room. “This had been our plan for years, and we were talking with GreenStone for several years to make sure we were on task,” Mackenzie said. She wrote a grant proposal for a USDA Value-Added
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➡ Rove Estate has around 12 employees, including four farm staff. McKenzie says she has a strong team. “They are passionate about wine and enjoy people. Every one of them is here because they really want to be. The caliber of people we have here is just amazing.”
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Bough to the Irish With both Creighton and McKenzie Gallagher being Irish, they searched for a proper name for the vineyard and tasting room to reflect their heritage. With the help of their graphic designer, who helped establish their brand, the couple embraced a piece of Irish history.
Producer grant, and with backing from GreenStone, secured a $250,000 grant with matching funds. They consolidated their loans with GreenStone, using FSA as the secondary lender. The couple worked with the lending team out of GreenStone’s Traverse City office, most recently working with Travis Bratschi as their GreenStone financial services officer. Construction on the tasting room with its 2,000 square feet and 800 squarefoot covered porch, started in 2015 and opened May 5 with the first five new wines. “GreenStone has really stood behind us and went to bat for us at times,” Creighton says. “Travis has been great—just awesome.” The Gallaghers also use GreenStone for their accounting. “We had a hard time getting an accountant that understood farming,” Creighton says. “Yvonne Fleis at GreenStone really gets it and has been wonderful to work with.” For the People
Over 300 years ago, thousands of Irish fled their native land and spread across the globe in what is historically known as the “Flight of the Wild Geese.” What few realize, however, is that a large number went on to establish some of the most renowned wineries today. These forgotten Irish craftsman and their ancestors are reverently named the “Winegeese.” Rove means “to travel constantly without a destination; wander.” Rove Estate was born from both a passion for wine and a desire to preserve a family’s heritage. The name itself pays homage to the “unsung heros who paved the way for winemakers today, to the generations of immigrants that tilled and shaped these lands, and to all those who dare to dream or sail uncharted seas.”
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Summer 2016 — Partners
The tasting room and vineyard is named Rove Estate (see sidebar) and is perched on the highest elevation of any vineyard in the area. It is the only tasting room on M-72 and is the first stop on the Leelanau Peninsula Wine Trail. While most wineries cater to tourists and close at 5 p.m. on weekdays, Rove Estate is open until 7 p.m. on weekdays and 9 p.m. on
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weekends. “We welcome tourists, but we also want the local people who drive by frequently—some coming home from work—to make this a place to stop and meet with friends or simply to grab a nice glass of wine,” McKenzie says. “We have had a lot of local support and people have watched us grow. We want to welcome them in as a spot to relax and enjoy.” Creighton says the idea is to share the business. “The upstairs of the tasting room has an office and a bridal suite for bridal parties to get ready,” he says. “And, we have a flat spot for wedding tents or special events.” The upstairs of the tasting room also has a mezzanine with a television, crayons and other children’s activities to help occupy the Gallagher’s four children when they are visiting, which is often. Their children include Kylan, 8, Brielle, 5, Scarlett, 3, and Layla, 1. “The kids are with us a lot,” McKenzie says. “They are part of the operation and when I’m picking fruit, they are often with me. When we are at GreenStone, they are often with us and everyone there treats us like we’re part of their family.” Bratschi says, “The Gallaghers are goal-driven people. They have a vision and a drive to see it succeed— and I think they will. This is a great opportunity to capitalize on a niche market. McKenzie does a great job on the business side and in marketing
e welcome tourists, but we W also want the local people who drive by frequently–some coming home from work–to make this a place to stop and meet with friends or simply to grab a nice glass of wine.
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through Facebook and other avenues, while Creighton focuses on farming. They have a really good division of labor and are good partners in business and marriage.” McKenzie says, even with lots of ups and downs, it’s all been worth it. “This is 100 percent our dream,” she says. “We go to bed thinking about it and wake up thinking about it. It motivates us. It’s just so exciting to live out our dream—hardships and all.” ■
Straight Talk With Creighton and McKenzie Gallagher
When you were eight, what did you want to be when you grew up?
What is the biggest challenge for young, beginning or small farmers today?
Creighton – “Farmer or football player.”
Creighton – “It’s capital. There is no forgiveness in farming; you have to do it right. You cannot afford to miss any opportunity. That’s how we’ve managed this project. We are always trying to get ahead, but we have to be organized enough to make those jumps – jump on opportunities while being thrifty, smart and resourceful.”
When did you first realize that you wanted to be a farmer for a living? Creighton – “When I met McKenzie. It was also when I was working at a desk in a cube.”
Who do you look up to; who is your mentor?
➡ Creighton, 32, and McKenzie, 33, Gallagher believe that lofty goals motivate you to do your best. In 2010 they bought a piece of the family Traverse City cherry orchard and two years later, converted part of it to wine grapes. This May they opened their tasting room showcasing their first five wines.
Creighton – “For cherry farming, it’s my dad (John). For everything wine, it’s Coenraad (Strassen).”
What advice do you have for young, beginning or small farmers starting out? McKenzie – “Be organized - know where you are going. There’s no handbook in farming, so you have to learn from yourself and your mistakes. But, do your research, do your homework, make a business plan and learn from others.”
Where Are They Now... How has your business changed since 2013? We have planted more apples trees, and we have added more packaging types for our hard cider, including kegs and cans. We have also increased our efficiency by buying new equipment. What future plans do you have for your operation? We want to venture into the non-alcoholic beverage market. We want to continue to upgrade our equipment and improve efficiency and the bottom line. We want to stick with organic growing practices. What advice do you have for other young farmers?
Almar Orchards Flushing, Michigan Spring 2013
Spread your risk out. Don’t put all your eggs in one basket. Keep your business well integrated. Use social media, it’s better than paid advertisements. ■
Partners — Summer 2016
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O
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R MAR E M KE M T U
UT LOOK
By Bob Utterback
Now that the crops have been planted, one of the big uncertainties created involves supply. At the time of writing this, I do not know what the end of June acreage report will say about how many acres have actually been planted. I’m comfortable saying I believe we lost close to 1 million off the corn numbers and soybeans grew 2 million. The next hurdle the supply side has to get over is how well crops are produced. This is where summer weather scares come into play, but I have to say [overall] the crop was looking great early. There was adequate moisture in most production areas so Mother Nature is going to have to turn from cool and wet to hot and dry like it did in 2012. While many are worried about the changing El Nino pattern, I lean to the normal yield assumption with increasing difficulties this fall and more impact on 2017 production. Unless something significant happens “very” quickly, I expect an above average production year.
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Summer 2016 — Partners
This then places the burden of higher prices on the demand side of the equation. I have to admit that, from last fall through early winter, I was very worried about the stagnant economic growth around the world. I felt this would translate into less demand, but I was wrong in regard to soybeans. Even with the Chinese economy struggling and moving reserves of corn and soybeans into the marketplace, the soybean market rallied significantly in April and May on the strength of increased soybean year-to-date demand. They are buying for their livestock, chicken and overall increase in fish production. When you combine this with a U.S. Dollar that weakened significantly in the first quarter of 2016, and the oil market finding its footing, the overall commodity complex exploded with increased speculative capital. The trading funds have pushed to very impressive contracts speculative long soybean position and seem very comfortable defending the position on corrections rather than liquidating for a short-term gain. The talk in the trade is that soybean exports could continue to expand with South America having difficulty with their crop this year. This pushes
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he trading funds have pushed to T very impressive contracts speculative long soybean position and seem very comfortable defending the position on corrections rather than liquidating for a short-term gain. The talk in the trade is that soybean exports could continue to expand with South America having difficulty with their crop this year. This pushes the risk that soybean carryover could actually move lower over the upcoming month.
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the risk that soybean carryover could actually move lower over the upcoming month.
floor price under inventory and then adjust upward if bullish surprise events occur.
This then sets up a very strange situation for the soybean-corn relationship. I believe the potential exists this year for burdensome corn supply, but reasonably tight supplies of soybeans as the marketplace views the future.
market will be struggling to keep prices up. Very wide basis is already seen in western states. If corn carryover remains anywhere above 1.6 billion, I expect basis will start to widen after the middle of June and continue to widen as harvest draws near. This implies there are a few necessary things to get done.
What can change? Yield potential this summer for the crops and how many double-crop soybean acres are brought into the market this summer. Other factors include how fast South America expands production this fall, when the Chinese grain reserves hit the market, how fast farmers move unsold inventory before the next crop comes on board, whether the U.S. Dollar remains weak to help exports, and whether the Chinese economy stumbles again [putting into question short-term demand prospects]. As you can see, there are a lot of things that could go wrong. As always, I suggest producers look at taking advantage of seasonal rallies in the market to get a
Corn Strategy: As fall nears, the corn cash
Old Crop. Set a specific date when basis and
flat price will be locked up for all old crop sales. I suggest the best flat price and basis time period is from mid-June to mid-July. If it must be sold off the combine due to storage space limitation, I suggest setting mid-July as the absolute date to price it. New Crop. After mid-July, have all expected
inventory priced that you intend to sell by the spring of 2017. Looking forward, if you have to sell a lot of inventory off the combine or you have feed needs, I would start thinking about reownership in September and/or October. At that time, I would also be working on a plan
to get inexpensive deep-out-of-the-money December 2017 calls bought and paid for in order to aggressively sell a spring of 2017 pricing event when offered. In summary: The potential for a solid corn
production year is going to keep corn stocks high enough that corn prices will find great difficulty moving significantly above recent highs. The only wild card that I see right now that could improve corn prospects is if soybean prices take off to the upside. SOYBEAN: With strong export demand
prospects, most bulls have heavily discounted any increase in soybean acres. The battle I see developing is how much of the bullish price outlook has already been factored into the market. If there is anything I’ve learned about this complex, it is a bull has to be fed while a bear can be starved. The big question now will be how long the funds will defend their very big net long position. Even with long-term prospects for tighter supplies as we move into the winter of 2016, I believe the bulls will want to take some profits from early August to fall. I would not be surprised if they then attempt to reload on fall lows to take advantage of any South America weather scare event. The opportunity [for producers] to take advantage of this price action to move before the high is confirmed is possible. I have found it very difficult to act decisively on sharp downward price action even if there is strong technical confirmation. Old crop: Those with old crop soybeans
have won the pricing sweepstakes. It is now time to take the prize home. I strongly suggest against waiting until August to get the last ounce of price strength due to weather scare. Use that strength to price the expected 2016 crop. New crop: After July 4 we move into
the prime time period for greatest price variability due to weather impacts on the crop from late July to early August. I suggest dividing any remaining unpriced inventory into three units and pricing at least one unit every two weeks starting the first week of July and being done by the first week of August. In regard to pricing while many may be talking about sharply higher values, I have to say the market has had a lot of problems just below $11. If it is believed that the market has more upside potential, consider buying deep-inPartners — Summer 2016
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the-money January puts during this time period. This gets a floor under the market and still provides a way to improve the cash selling price if any late summer weather impacts are seen on soybean yields. WHEAT: Wheat continues to be
plagued by big world stocks. The only positive feature I see is a high percent of the world stocks are held by the Chinese for internal domestic usage. Many think this implies the actual free stocks are tighter, which is a move in the right direction. The problem, as we all know, is the Chinese can change their game plan rather fast. So the overall wheat market is stagnant with only modest upside price potential until some type of production event can be identified. This implies storing on farm when it needs to be sold to capture carry. Those planning to be a net seller from January to March should start buying deepout-of-the-money July 2017 wheat [courage] calls NOW. I suggest at least $1 and maybe even $1.50 out-of-the-money. If possible,
i
have the calls bought by no later than late August. If the risks are understood, use technical analysis to help identify a late summer low. At that time, focus on selling deep-out-of-the-money May puts to help pay for the long calls. Please note, this is a speculative risk so understand the risks and rewards and understand exactly what to do “if” the market exceeds downside objectives. In summary, the soybean complex is the primary [grain] commodity with the tightest stock prospects. The only question now is how much of this future demand has already been factored into the $2 plus move off the winter lows. The net impact will be whether soybeans can pull up corn and wheat and excite the public into getting long? What happens when some of the excitement is let out of this bullish balloon? I cannot stress strongly enough the need to have a plan now to act if the market starts to break critical technical support once we get past the critical early July growing season. Good Luck! ■
ABOUT THE AUTHOR
Bob Utterback is the Farm Journal Economist and President of Utterback Marketing in New Richmond, IN. Call Bob for strategy updates at 877-898-4324. Email comments on Outlook to utterback@utterbackmarketing.com.
The opinions stated herein are not necessarily those of GreenStone Farm Credit Services. This material has been prepared by a sales or trading employee or agent of Utterback Marketing Services, Inc. and is, or is in the nature of a solicitation. This material is not a research report prepared by Utterback Marketing Services, Inc. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction without registration, the market commentary in this communication should not be considered a solicitation. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Utterback Marketing Services, Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.
AGRICULTURE – OPEN FIELDS BLOG BRIEF GreenStone publishes regular updates on our Open Fields blog. Check out some of the posts you may have missed at www.greenstonefcs.com! • Commodity Outlook Livestock and dairy margins continue to adjust downward from their record levels set in late 2014, as production increases and export demand declines due to the increasing value of the U.S. dollar. After declining $26.5 billion in 2015, the USDA projects that total U.S. livestock and product receipts will decline another $9.6 billion in 2016. Visit our blog to find a series of market outlook posts and learn more about specific commodities and their projects for 2016. • From Patriot Missiles to Honeybees: My Path to Farming in Michigan Adam Ingrao, co-owner and beekeeper at Bee Wise Farms LLC and executive director of the Farmer Veteran Colaition of Michigan, talks about becoming an Army solider in a time of crisis, and unexpectedly, life had a different plan for him. • Farmer Veteran Coalition National Conference Coming to Michigan Farmer Veteran Coalition (FVC), a national non-profit serving military veterans working in agriculture since 2008, has announced that the Michigan chapter of FVC will be hosting the third annual Farmer Veteran National Stakeholders Conference at the Kellogg Center at Michigan State University, Nov. 30 – Dec. 2, 2016. Visit the blog to learn more on the conference, and how you can get involved! ■
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CONNECT
NEWS: FARM FORWARD MENTORSHIP– UPDATE AND NEW CLASS OPEN
Investing in the Future
In coordination with our centennial anniversary, GreenStone developed the Farm Forward Mentorship program, pairing young, beginning and small farmers with experienced mentors. The program is uniquely designed to provide a valuable growth and learning opportunity for all participants. These individuals have the drive, knowledge and vision to strengthen the future of the ag industry.
Now halfway through the inaugural yearlong program, it participants are seeing positive outcomes from their participation. It launched in January for the mentee/ mentor pairings, and includes several coordinated conversations and site visits to the mentor and mentee farms, all designed to foster conversations around business areas they have prioritized. Some key areas of focus between the pairs have included: creating an effective business plan, managing risk, utilizing resources and overseeing day-to-day operations. While the mentors have the opportunity to learn new ideas and gain satisfaction of helping and teaching
the next generation, the mentees gain the knowledge of industry dynamics and practices, network with key industry contacts, and better understand the business model of agriculture today. Mentee Jeremy Brenner and his mentor, Bruce Lewis, were interviewed by The Hillsdale Daily News about the program earlier this year. Jeremy said, “I look forward to our meetings, so I can ask questions about many different things that pertain to the dairy industry. Bruce is a veteran of the industry and has been through the highs and lows of the industry. I look forward to hearing from Bruce about experiences that he has endured over the years.”
GreenStone recognizes that young, beginning, and small farmers are vital to the economic health of agriculture and the rural communities we serve. The Farm Forward Mentorship program focuses on sharing this wealth of knowledge with agriculture’s next generation who will help carry us forward into the next 100 years. As we look to the 2017 program, GreenStone is seeking the next set of customers who see value in this opportunity – both mentees and mentors. If you are interested in participating in GreenStone’s Farm Forward Mentorship program, contact your local branch today to learn more! ■
GreenStone has made a $25,000 contribution to the Great Lakes Ag-Tech Business Incubator, a non-profit organization focused on helping farmers and entrepreneurs commercialize their ag-technology machinery, equipment or software ideas and inventions. A key to this partnership is GreenStone’s commitment to offer Incubator clients resources in areas such as financial counseling, lending, and business finance training. “For the last century, GreenStone has supported organizations, programs and initiatives dedicated to advancing agriculture. This partnership with the Great Lakes Ag-Tech Business Incubator fits with our commitment to help Michigan ag-technology based businesses get started and become successful,” said Dave Armstrong, President and CEO of GreenStone Farm Credit Services. For more information on the Incubator, visit www.agtechincubator.com. ■
Hantz Farms Tree Planting Volunteers from GreenStone once again traveled to the city of Detroit to plant trees in abandoned lots at Hantz Woodlands. GreenStone’s commitment to non-traditional, urban agriculture through a partnership with Hantz Woodlands is transforming blight to beauty as vacant, abandoned properties are converted to fields for new agricultural production. To help with the effort, employees rolled up their sleeves, and got to work planting hundreds of trees in the city. ■
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MY ACCESS—MOBILE OPTIMIZATION AND OLB APP GreenStone is excited to unveil enhancements to My Access, designed to make your interactions with us more convenient than ever! Now, managing your account on-the-go is easier with My Access’ new mobile friendly design! • From your mobile device, navigate more efficiently to File Exchange and My Documents by using the new icons conveniently located both on the home screen and within the top-left menu button. Also, easily manage your communications, including custom email and text alerts, and email subscriptions through My Preferences. • In the new mobile Quick Links section, effortlessly enroll in Electronic Consent to receive required notices, disclosures, and documents via email, and opt to receive bills and statements electronically, both of which will help eliminate clutter. • Instantly know the number of new alerts you have received the moment you login by the bell token located at the top of your screen. In addition, customers can now access your Online Banking account form our convenient app, available in the iTunes App and Google Play stores. With the GreenStone app you can: • Make a payment from your linked bank account, or if you have a revolving line of credit, utilize our Remote Deposit Capture to make on-the-go payments by check. • Transfer funds between accounts. • Make or schedule disbursements. • Monitor account balances and upcoming payment deadlines. Take a moment to explore these features and more, from any device, anywhere today! If you haven’t enrolled in My Access, getting started is easy! Go to www.greenstonefcs.com, and click “Enroll in My Access” in the top right corner of the homepage. ■
National NAMA Award GreenStone was recently honored by the National AgriMarketing Association (NAMA) with a first place National Best of NAMA award in the “direct mail—directed to farmers,
growers and ranchers—three dimensional” category for a 2015 direct mail campaign. This award program honors 15
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the best work in agricultural marketing and public relations from the around the nation. ■
Quarterly Financial Update GreenStone closed the first quarter of 2016 with net income of $34 million through March 31, a decrease of seven percent from the first quarter of 2015. Total owned and managed loan volume was $7.5 billion as of March 31, 2016, while total capital at quarter end was $1.4 billion. The credit quality of our loan portfolio remained very sound with 96.2 percent of our loan portfolio classified as acceptable. “As parts of the agriculture economy face uncertain times in the near future, GreenStone remains well prepared for this cycle,” said Travis Jones, chief financial officer. ■
Members Elect Directors to Serve Rural Communities and Agriculture The members of GreenStone Farm Credit Services have elected four individuals to the cooperative’s board of directors, including one new board member. Peter Maxwell of Midland County (Region 1) was newly elected to a four-year term on the board. He and his wife, Allyson, own and operate a small cash crop farm, raising corn, sugar beets and soybeans. He also operates a sugar beet seed business, ACH Seeds, in Michigan Sugar Company’s west growing district, and is employed by Maxwell Seed Farms. The three incumbents reelected to their positions, all for a four-year term include:
Region 1: Ronald Lucas, Alpena County Region 2: Thomas Durand, Sanilac County Region 2: Scott Roggenbuck, Huron County “As GreenStone approaches our 100th anniversary, I’m confident our elected board will continue leading us in a direction that ensures we will be here to serve rural communities and agriculture, today and tomorrow,” said Dave Armstrong, GreenStone President and CEO. ■
Regional Vice President of Sales and Customer Relations
Mark Your Calendar...
Nicole Wesoloski has been promoted to regional vice president of sales and customer relations for GreenStone, and will oversee three branch locations in northeast Wisconsin. Nicole advanced to this position in alignment with the retirement of longtime GreenStone employee, Carl Treml after 35 years of service.
JULY
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Michigan Livestock Expo (13-19) Michigan State University Pavilion, East Lansing, MI
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4-H Youth Dairy Days and Michigan Dairy Expo (18-22) Michigan State University Pavilion, East Lansing, MI
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Farmers Market at the Capitol State Capitol Building, Lansing, MI
In this position, Nicole will serve as the leader of financial services officers, crop insurance specialists, and tax and accounting staff throughout their region. She will not only be responsible for the customer service from this group, but also for the guidance and development of the sales teams.
AUGUST
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Michigan Farm Bureau Young Farmer Golf Scramble Centennial Acres Golf Course, Sunfield, MI
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Wisconsin State Fair (4-14) Wisconsin State Fair Park, West Allis, WI
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National Blueberry Festival (11-14) South Haven, MI
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Breakfast on the Farm Event Tuscola County, Vassar, MI
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Agro Expo (16-18) St. Johns, MI
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Agriculture Innovation Day: Focus on Soil Saginaw Valley Research and Extension Center, Frankenmuth, MI
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Farmers Market at the Capitol State Capitol Building, Lansing, MI
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Breakfast on the Farm Event Lenawee County, Clayton, MI
Wesoloski began her career at GreenStone in 2001 as a tax consultant. Later, she was promoted to senior tax accountant and product manager of the association’s accounting services. In this position, Wesoloski was responsible for completing individual, partnership, and business tax returns, providing timely and accurate farm records to customers, and served as a resource for the cooperative’s team of tax accountants for accounting products and software. As we welcome Nicole to this new role, we also say farewell to Carl in his retirement. Carl has provided Farm Credit with many years of experience and service, and has been a valued leader to his team! ■
Retirement Announcement Congratulations to GreenStone’s executive vice president and chief sales and marketing officer, Randy Stec, on his recent retirement after 36 years of service to the Farm Credit System. During his career, Randy held a variety of roles including loan officer, branch manager, chief credit officer, and regional vice president, before assuming his most recent position on our executive team. We are grateful for his many years of service and applaud his leadership to GreenStone! ■
SEPTEMBER
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GreenStone Offices Closed In honor of Labor Day
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Great Lakes Logging & Heavy Equipment Expo (8-10) Oshkosh, WI
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Farmers Market at the Capitol State Capital Building, Lansing, MI
OCTOBER
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World Dairy Expo (4-8) Alliant Energy Center, Madison, WI
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Dream job: A job in the agricultural industry, owning a business. Lauren Heberling; Carsonville, MI Daughter of David Heberling and Amber Holdwick Majoring in: Animal science at Lansing Community College, with plans to transfer to Michigan State University People would be interested to know: “I serve as a junior member on our Farm Bureau Board.” Dream job: Dairy feed nutrionist.
GREENSTONE SUPPORTS YOUTH BY AWARDING $40,000 IN SCHOLARSHIPS AS PART OF GREENSTONE’S COMMITMENT TO YOUTH IN AGRICULTURE, THE COOPERATIVE AWARDED $40,000 IN SCHOLARSHIPS TO 22 INCOMING COLLEGE FRESHMEN PURSUING A DEGREE IN AN AGRICULTURE-RELATED FIELD. THOSE ATTENDING AN ASSOCIATE-STYLE COURSE WERE AWARDED $1,000 EACH, WHILE THOSE ENTERED IN A FOUR YEAR PROGRAM EARNED $2,000. “These scholarship recipients are outstanding individuals, and are the type of leaders we want to represent GreenStone’s commitment to youth in agriculture,” said Dave Armstrong, CEO and President of GreenStone. “This award speaks volumes to their past accomplishments, good citizenship, and passion to continue their growth and development as the future generation. GreenStone is proud to assist in furthering their education.” Alaina Ableidinger; Hillman, MI Daughter of: Todd and Marianne Ableidinger Majoring in: Biology and pre-vet at Michigan State University People would be interested to know: “I have been involved with 4-H for 11 years.” Dream job: A veterinarian Hannah Campbell; St. Johns, MI Daughter of Gary and Kelly Campbell Majoring in: Agribusiness management at East Black Hawk College People would be interested to 17
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know: “I prefer to spend my spare time barrel racing my horse, Rio.” Dream job: Owning a Simmental/Angus cattle and performance horse ranch, and a greenhouse out west. Claire Carviou; Porterfield, WI Daughter of Jayme and Sara Carviou Majoring in: Accounting and finance at the University of Wisconsin – Green Bay People would be interested to know: “I’ve been playing the piano since fourth grade.” Dream job: Working for the Green Bay Packers.
Stephanie Domke; Herron, MI Daughter of Roland and Kristi Domke Majoring in: Animal science at Alpena Community College People would be interested to know: “I enjoy bow hunting for deer.” Dream job: An animal nutritionist. Emily Fricko; Attica, MI Daughter of John and Sue Fricko Majoring in: Food science at Macomb Community College People would be interested to know: “I’m the middle of five children, and I love showing cattle.” Dream job: A meat inspector or food scientist at the USDA. Jennifer Gentner; Minden City, MI Daughter of Craig and Mary Kay Gentner Majoring in: Business management at Saginaw Valley State University People would be interested to know: “I enjoy eating 24/7.”
Madeline Henrickson; Allegan, MI Daughter of Lyle and Becky Henrickson Majoring in: Crop and soil sciences at Michigan State University People would be interested to know: “I can play the euphonium and didgeridoo.” Dream job: An agronomist or work in crop research. Claire Hrubecky; Mishicot, WI Daughter of David and Theresa Hrubecky Majoring in: Genetics at the University of Wisconsin– La Crosse People would be interested to know: “I have a passion for agriculture and medicine.” Dream job: To become a surgeon that incorporates my passion for agriculture and medicine. Loren King, Burr Oak, MI Son of Bart and Angie King Majoring in: Agribusiness and biosystems engineering at Michigan State University People would be interested to know: “I am an avid horseman and show Bareback and Western horses.” Dream job: Owning and running an agricltural technology company that focuses on autonomous vehicles, GPS, wireless sensers, and drones.
Jenna Kingsley; Webberville, MI Daughter of Steve and Kathy Kingsley Majoring in: General studies at Lansing Community College People would be interested to know: “I’m serving as the 2016– 2017 Michigan FFA State Sentinel.” Dream job: Working as an agriscience teacher at a high school with a FFA program.
Madeline Meyer; Ionia, MI Daughtor of James and Veronica Meyer Majoring in: Animal science at Michigan State University People would be interested to know: “I have five younger brothers.” Dream job: Color commentator sports broadcaster for the Michigan State University men’s basketball team.
Kathryn Kugel; Shawano, WI Daughter of Mary Lou and Chuck Kugel Majoring in: Agribusiness at Saint Norbert College People would be interested to know: “I love to knit, and my favorite animal is a dairy cow.” Dream job: Working in a management position for a Fortune 500 agricultural company.
Eric Moser; Dansville, MI Son of Stan and Laura Moser Majoring in: Agriculture, food and natural resources education at Michigan State University People would be interested to know: “I have played the trumpet for seven years.” Dream job: Working full-time at a state FFA association.
Brayton Lehman; Portland, MI Son of Mike and Lisa Lehman Majoring in: Crop and soil sciences at Michigan State University People would be interested to know: “I bought a combine when I was 17 years old.” Dream job: Working for a company to help further and make a difference in the agricultural industry.
Shannon Particka; Ubly, MI Daughter of Tim and Joan Particka Majoring in: Animal science (pre-vet) at Michigan State University People would be interested to know: “I started showing animals when I was 15 years old.” Dream job: A mixed animal veterinarian.
Brady Littlefield; Burr Oak, MI Son of Matt and Andrea Littlefield Majoring in: Animal science at Michigan State University People would be interested to know: “I am a twin, and have siblings that are twins.” Dream job: Owning and managing a large scale beef cattle operation.
Allison Schafer; Westphalia, MI Daughter of Leroy and Stephanie Schafer Majoring in: Agribusiness management at Michigan State University People would be interested to know: “I have my own herd of fifteen Holsteins and Jerseys.” Dream job: One that helps farmers.
Sarah Van Asten; Kaukauna, WI Daughter of Tom and Susan Van Asten Majoring in: Agricultural science education at the University of Illinois People would be interested to know: “I show beef steers at the Brown County Fair.” Dream job: To be the Wisconsin State FFA Executive Director. Cole Van Oss; Denmark, WI Son of Mitch and Connie Van Oss Majoring in: Accounting at the University of Wisconsin – La Crosse People would be interested to know: “I enjoy doing just about everything, and I always have an optimistic attitude.” Dream job: Sitting in a brand new John Deere, combining corn with a 12 row corn head, while a grain cart follows alongside all day. Peter VanderHoff; Hillsdale, MI Son of John and LeeAnne VanderHoff Majoring in: Agribusiness management at Michigan State University People would be interested to know: “I am a die-hard soccer fan.” Dream job: Owner and manger of an organic dairy farm. John Williams; Marshall, MI Son of Todd and Sharon Williams Majoring in: Crop and soil science at Michigan State University People would be interested to know: “I have hundreds of sunset pictures on my phone.” Dream job: Owning and managing a greenhouse, producing a variety of plants from vegetables to flowers. ■
Pause for Applause... 1. Leelanau County cherry grower
and GreenStone customer Ben LaCross is the newest member of Michigan’s 21st Century Infrastructure Commission. The group was created earlier this year by Gov. Rick Snyder to provide recommendations for improving state infrastructure systems including roads, water, energy and communications.
2. GreenStone customer, Kendell
Zemple of Manawa, WI, was recently featured in a special edition of Farm Futures magazine. The publication included customers and their transition to a successful future as part of the Farm Credit centennial.
SERVICE ANNIVERSARIES Help GreenStone congratulate and thank these staff who are celebrating an employment milestone. From five to 40, the years represent the dedication and service all employees provide our members. July: Tom Wilson (40) Sandy Arnold (35) Pam Sommerfeld (35) Elizabeth Conley (15) Rebecca Fischer (15) Ann Klemp (10) August: Karen Six (15) Karen Ansell (10) Melissa Vincent (10) Jonathan Eaton (5) Lori Phillips (5) September: Susan Bardins (30) John Jones (30) Carol Case (25) Carrie Lockwood (5) Merissa Prahin (5)
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BEHIND THE SCENES– GreenStone’s team includes more than 500 employees throughout Michigan and northeast Wisconsin. While Farm Credit commemorates 100 years of serving our communities, our staff together represent 5,755 years of service to the system and our local members. Our association continues to be well-positioned with a wide variety of experience behind those years; while some employees are newer to the team, bringing fresh ideas and knowledge, one fifth of our team members have 20 or more years of sound Farm Credit experience, dating back to the 1970s. Here, two of our most tenured staff share a bit about themselves and their time with Farm Credit.
38+ years of service: Jean Roos, customer service representative Ann Arbor, Michigan
39+ years of service: Pat Koester, senior financial services officer Mt. Pleasant, Michigan
What do you like best about working for GreenStone?
What do you like best about working for GreenStone?
I like to meet the customers who work on the farm with animals and crops. It’s nice to hear about what they do to keep them operating. It’s also great that we are a provider for rural residential customers who desire the calm of country living. That seems to be our forte at the Ann Arbor branch.
I love hearing from our customers. It makes my day when I hear how they appreciate the work we do and how GreenStone has been there for them.
What is your favorite memory from over the years? I feel like I’ve had so many memories and experiences that I probably would not have had working somewhere else. They are too numerous to just pin a particular one down. What has changed from when you first started working for Farm Credit?
Tenured Staff
Technology has changed a lot over the years. We continue to strive to make it better and better. People who are new to the company are always surprised by how much technology we use. What do you like to do outside of work?
What is your favorite memory from over the years? Believe it or not, it has been rewarding to see many of my customers thrive in recent years after the farm crisis in the 1980s. I’m happy to say there have been a lot of success stories. What has changed from when you first started working for Farm Credit? We have seen a lot of changes with technology, of course, but there have also been a lot of changes related to regulatory compliance. We are always learning new things. What do you like to do outside of work? My grandsons keep me entertained. I also love to fish, hunt and golf, or do anything competitive. ■
I love to spend time with my family the most. My husband and I also like to ride motorcycles. I learned how about eight years ago.
“
GreenStone FCS, “I want to thank you for your comments about looking at the bright side of life. I am 85 years old; I moved to Iowa many years ago and was a partner in an agricultural business for 50 years. Your comments are very timely as we look back to how things were 85 years ago and since. We now live in a global world and agriculture has, as you might say, become an industrialized business. We are a small customer from your Coleman office with the family farm still in the family. Thanks much your comments.
”
— Dr. Leroy Hanson
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...Candid Comments
Name: Matt Cramer Title: Credit Intern Branch: East Lansing Hometown: Bad Axe, Michigan College: Michigan State University Major: Agribusiness Management Internship goal: “I am hoping to gain professional experience and further knowledge about credit and GreenStone.” Name: Hannah Long Title: Information Services Intern Branch: East Lansing Hometown: White Oak Township, Michigan College: Grand Valley State University Major: Information Systems Internship goal: “I hope to gain insight into the various positions a company’s IT department can offer outside of software development.”
MEET THE 2016 GREENSTONE INTERNS GREENSTONE WELCOMES EIGHT STUDENT INTERNS FOR THE SUMMER, PROVIDING EACH WITH AN OPPORTUNITY TO SHARPEN THEIR SKILLS IN THEIR RESPECTIVE CAREER FIELD. SIX OF THE INTERNS ARE BASED IN OUR EAST LANSING OFFICE, WHILE THE OTHER TWO INTERNS ARE IN OUR GRAND RAPIDS AND CARO BRANCHES. Currently in its seventh year, GreenStone’s internship program is designed to provide college students with real-world experience to coincide with their education. Students take part in the same hiring process as our full-time employees, applying online to their desired position and going through the complete evaluation process. Intern selection is based on experience and aptitude, with an emphasis on performance in the classroom, extracurricular activities, and involvement in the community. Each intern will work approximately 14 weeks in their position before returning to school for the fall semester. In addition to real-world experience in the agriculture industry, GreenStone internship positions are also paid positions with the company. The summer 2016 class of interns includes: Name: Kelvin Alderman Title: Legal / Loan Processing Intern Branch: East Lansing Hometown: Owosso, Michigan College: Alma College Major: Economics Internship goal: “I hope to learn as much as possible and decide what I want to do after college.”
Name: Mitchell Black Title: Credit Intern Branch: East Lansing Hometown: Bloomfield Hills, Michigan College: University of Michigan Major: Economics Internship goal: “I would like to gain experience in credit analysis and learn more about the agriculture industry.” Name: Alyssa Brumbaugh Title: Audit Intern Branch: East Lansing Hometown: Charlotte, Michigan College: Davenport Major: Fraud Accounting and Auditing Internship goal: “I hope to gain a better knowledge of auditing.”
Name: Syed Naqvi Title: Application Systems Analyst Intern Branch: East Lansing Hometown: Muscat, Oman College: Michigan State University Major: Computer Science Internship goal: “I would mostly like to learn new skills and have the opportunity to job shadow, learning in an office environment.” Name: Allison Pung Title: Credit Intern Branch: Caro Hometown: Portland, Michigan College: Michigan State University Major: Agribusiness Management Internship goal: “I am hoping to gain financial experience and expand my knowledge of dairy operations in Michigan’s thumb region.” Name: Henry Smits Title: Credit Intern Branch: Grand Rapids Hometown: Hamilton, Michigan College: Grand Valley State University Major: Accounting Internship goal: “I hope to gain more exposure to the financial side of farming in order to build experience in the agriculture industry to help me reach my career goals.” ■
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a century of progress!
President Woodrow Wilson signs legislation creating the Federal Land Bank System on July 17, 1916.
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July 17, 1916 THAT IS THE DATE IN HISTORY WHEN PRESIDENT WOODROW WILSON SIGNED LEGISLATION CREATING THE FEDERAL LAND BANK SYSTEM, WHAT WE NOW KNOW AS THE FARM CREDIT SYSTEM. One hundred years later, as we reflect on our past and consider the future, it is easy to see how times have changed. We have seen advances in technology, from medicine to cars, computers and more. Our homes and social lives have changed… moving at a faster pace, continually doing more with less. With so many transformations, it is nice to reflect on ‘simpler times,’ remembering American life that now seems so quaint. In fact, it is almost humorous to think that following President Wilson signing the Federal Farm Loan Act, the very first loan made was for just $4,691.66. What seems like a small amount in today’s economy was enough back then to help a family farm, and lay the ground work for a system that now serves approximately 500,000 borrower-owners across the United States. Members like you, who today plant and nurture seeds, set country roots and raise families, toil land and
The 1916 Act provided for a Federal Farm Loan Board with five members, one of whom was the Secretary of the Treasury. The rest are pictured here in 1917. Second from right is Charles Lobdell who led the Board for a time as Farm Loan Commissioner and later became fiscal agent.
National Farm Loan Association Secretary M.J. Ehlers meets with a farmer in the Bay City, Michigan office in 1941.
maintenance equipment, raise and care for livestock, build barns and milking parlors, and expand storage, packing and processing facilities, all with the help of Farm Credit. As we move forward, GreenStone is committed to supporting organizations, programs and initiatives dedicated to advancing rural communities and agriculture—today and tomorrow. And as we honor our past, we also encourage you to view the many current faces and images of agriculture and rural communities on GreenStone’s Facebook page. We recently wrapped up the #GreenStone100PhotoContest and have featured the submissions in an album on our Facebook page. These photos represent the diversity of what GreenStone’s mission serves, and visually show our commitment to provide dependable credit and financial services to our members, and help them successfully achieve their goals and thrive in the next century.
Federal Appraiser William Grant in action appraising an orchard property in California in 1919.
By 1937, the Production Credit System had grown to include some 550 Production Credit Associations nationwide. Today, those associations have merged to approximately 75 associations in the Farm Credit System.
F.J. Brown of Peck, Michigan, shows his daughter Debra Lynn a bale loader which handled more than 5,000 hay bales in 1954. Brown used a loan from the Sandusky Production Credit Association to finance his 295 acres and 20 milk cows. In this 1959 photo, Ronald Friske cultivates raspberries on his family’s farm near Eau Claire, Michigan.
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Legislative Matters: GreenStone customers with the highest level of integrity and dignity. We are all very proud of not only Jed, but each and every one of our Michigan and Wisconsin farmers for their strong representation on the positive impact agriculture has on our country, state and communities. Another young, beginning, and small Michigan farmer, Adam Ingrao, had the opportunity to speak on the panel “Supporting the Next Generation of Agriculture” during the centennial events in June. Adam also serves as the Executive Director of LAST MONTH’S FARM CREDIT CENTENNIAL CELEBRATION the Farmer Veteran IN WASHINGTON, D.C., WAS SUCCESSFUL IN CREATING A Coalition of Michigan. HEIGHTENED AWARENESS OF THE IMPORTANCE OF THE His remarks were FARM CREDIT SYSTEM. powerfully affirmative of GreenStone’s support for non-traditional Among the coordinated activities were visits and beginning farmers. He also spoke to the to legislative offices, formal recognition opportunities and counseling on farming of agricultural supporters, and receptions operation finance and business planning he with key policy influencers, and panel has experienced with GreenStone. Adam presentations on hot agricultural issues. is dedicated to farming and the positive Farm Credit week in Washington, D.C. came impact it has on returning veterans. following the recent U.S. Senate Committee Numerous issues were addressed during on Agriculture, Nutrition and Forestry this centennial panel discussion, including: hearing covered in the CEO comments on learning to operate within the market, page three of this Partners issue. Both the young farmers recognized within the centennial events and the hearing were market, making transitions from small forums in which GreenStone members to larger farm operations, sustainability helped distinguish the System, along with of young farmers, vertical integration your Farm Credit association. challenges, recordkeeping, reasonableness At the Senate Hearing, GreenStone of Farm Credit covenants versus traditional customer Jed Welder had the opportunity bank practices, geo-politics with its effect to testify to the Senate Committee on the on all of farming, and the importance of importance of Farm Credit (http://www. mentoring young farmers. In this important agriculture.senate.gov/imo/media/doc/ presentation heard by many policy makers Testimony_Welder.pdf). His statements and legislative leaders, GreenStone, through were made in light of the American our Michigan relationships, stood out as Bankers Association and Independent first class. Bankers Association calling into question With all of this, the heat on the issue of the value of Farm Credit for the country. maintaining a strong Farm Credit voice has Jed represented Michigan farmers and
THE HEAT IS ON
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never been hotter. The need to withstand the temperatures and maintain a positive active voice remains high. We hope you embrace every opportunity to advocate for support and sustaining Farm Credit. You are a member of something you should be very proud of; your engagement remains important each day, and with each new election. ■
MICHIGAN FARMER VETERAN TESTIFIES BEFORE SENATE AG COMMITTEE REGARDING FARM CREDIT Jed Welder is a former military officer, and now the owner/operator of Trinity Farms in Greenville, Michigan. Invited by U.S. Senator Debbie Stabenow, Jed recently testified on his experience working with GreenStone and the Farm Credit System at the Senate
Committee on Agriculture, Nutrition and Forestry’s hearing titled, “The Farm Credit System: Oversight and Outlook of the Current Economic Climate.” In his testimony, he expressed the need for the reliable and consistent credit and financial services that Farm Credit provides. “This is a challenging time for farmers like me across the country. Right now, we are planting corn and soybeans with prices very near breakeven,” Jed said. “Having a lender that works with me, that knows my farm and the challenges I face, is more important than ever.” Read more about Jed’s story on the GreenStone Open Fields Blog at www.greenstonefcs.com. ■
PAC PROGRESS: THE ELECTION YEAR IS IN FULL SWING AND MANY THINGS ARE YET TO BE SEEN, BUT THE AGRICULTURE SUPPORT TEAM CONTINUES TO GROW AND DEVELOP, AND SOLVE CHALLENGES. As the Farm Credit PACs support legislators who value sound Farm Credit and agriculture policy, the legislators work to pass legislation that accurately reflects the requirements of agricultural producers. These strong bipartisan efforts allow agriculture producers to provide food and fiber to the world in a responsible manner. Without all parties working together, difficulties can arise in unpredictable ways, validating the need to stay engaged at high levels. The large success of the MI GreenStone PAC Patronage Campaign was followed by deliberation on the budget for the MI GreenStone PAC. The Board of Directors, with perspective from Kelley Cawthorne and the government relations team at GreenStone, identified 35 individuals to initially receive funds based on their farming background, commitment to growing Michigan’s agriculture economy and rural communities, and leadership in the Michigan legislature. Delivery of the funds has begun, including some meetings being held at GreenStone’s branch offices with member involvement. In Wisconsin, contribution limits to legislative candidates have been raised, and now present an important opportunity to provide campaign contributions to those who have led policy efforts that are priorities for the WI Farm Credit Legislative Committee. While financial resources are currently limited, conduit funds will go where directed by the contributor and PAC funds are being vetted and approved by the WI Farm Credit Legislative Committee for disbursement. The Farm Credit PAC has also been delivering contributions to federally elected legislators both in state and in Washington, D.C. GreenStone continues to be recognized as a leader in its efforts to build relationships and support elected officials with information, which also results in strong and positive recognition of Michigan agriculture and Farm Credit. None of this can successfully be done without partnering with other agricultural organizations in each state, as well as your continued support. The positive efforts and personal stories continue to draw attention to the great work being done by our farmers and rural community members. We commend your initiative and thank you for being a champion of the agricultural industry.
Update on Current Initiatives: The legislation to protect the mission of the Farmland Preservation Program (PA 116) passed on June 8, 2016. As a result, it is expected the processing of the contract agreements and tax credit refunds will be expedited. The Grain Dealers Act also passed on June 8, 2016 and will protect farmers in cases were a grain dealer/elevator fails. ■
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Directors’ Perspective:
GETTING STARTED AS PART OF GREENSTONE’S 100TH ANNIVERSARY, WE HAVE ASKED EACH OF YOUR BOARD DIRECTORS TO SHARE A BIT OF THEIR HISTORY WITH FARM CREDIT.
Take a minute to hear from three directors as they share how they started with Farm Credit, why they continue to choose GreenStone as their financial partner, and even some of their favorite memories working with the association. Check each issue of Partners this year to hear this same perspective from other directors as we reach this centennial milestone!
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Matt Berge
I have worked with Farm Credit for my entire dairy career, and my father had worked with Farm Credit for several years prior to my joining into the business. The first Farm Credit loan I was involved with was in 2000, when my family’s dairy farm went through a herd expansion and we needed loans to facilitate that growth. At the time we worked with Northeast Wisconsin Farm Credit, shortly before the organization merged with GreenStone. Farm Credit was instrumental in making that expansion goal a reality. We chose Farm Credit at that time because we felt they had the most expertise in the dairy industry when compared to other financial lenders that were available to us. They provided a key partner in making sure the expansion was well-planned out. In addition to offering more than just lending services, the interest rates were also lower than their competition.
Thinking back, my favorite memory related to GreenStone is my new director training shortly after I was appointed to the board. As I went through that training and met several of the people who work at the corporate office in East Lansing, I was continually impressed with each individual’s passion for agriculture, their passion for the cooperative structure of GreenStone, their belief in the Farm Credit system, and how honored they were to have a role in providing food, fiber, and fuel for the world. The level of care and commitment exceeded my expectations. I will continue to work with and recommend GreenStone in the future for many of the same reasons as I stated above. The people in the cooperative are not only some of the top people in their respective fields, but they are also passionate about agriculture, and care deeply about meeting the needs of their member owners, and will work diligently to find the best solution for each situation.
Dennis Muchmore
Ed Reed
As Farm Credit completes its first hundred years and looks toward the next century of service, I am particularly struck that, in the few years of GreenStone’s existence, we have seen the dramatic upswing of technological advancements in the farm industry and farm communities.
Our first Farm Credit loan was in the summer 1992, to purchase land for our sow farm. Following the land, we needed financing for excavation, construction and facilities; Farm Credit provided guidance through the entire process, making us feel comfortable. The startup financing was also provided by Farm Credit nine months before any cash flow; a lender with livestock experience was our key to success.
Younger people just entering the workforce, who are not necessarily cognizant of the general competencies required to manage a successful farm operation, need to be shown the opportunities available to them. We need not necessarily recruit new farm families, although that of course would be a terrific outcome of community outreach, but we do need to show the complexities that are confronting farmers and product managers – those challenges are just what this generation seeks.
We began working with GreenStone because we out grew our local banks ability to finance larger projects. Then, after our first loan, the relationship lending philosophy of GreenStone made them our first choice for the expansion project. We feel the relationship with our financial services officer to be part of our team’s success – we have worked with the same loan officer since 1992 – my sons and I are planning another expansion and GreenStone is our vendor of choice.
We must increase awareness and show young people that we need them in the industry, and with that need comes expanded job opportunities. As a by-product, there will be appeal to youth not familiar with agriculture. Let’s show them what they may not be aware of, and show them how they can be part of the continuing reliance on technology to maintain a lead in the world over emerging economies.
Speaking of my sons, one memory with GreenStone sticks out. The southwestern region previously hosted a summer outing in Nottawa, which my three sons thoroughly enjoyed growing up. It was structured as a family picnic with a hog roast, hay ride and lots of kid games!
We need to go back to square one a little and remind millennials what agriculture holds for them: self-reliance, innovation, character, and opportunity. If they are not from the farm community, let’s show them how their future can be enhanced and made whole using the components of a life style that demands hard work, insists on value for money, and links personal satisfaction to goal setting, personal values and personal drive.
When it comes to the future, the things I already stated are part of why we’ll continue to work with GreenStone. On top of that, the staff at our branch office is professional yet personal, with a working knowledge of our operation from top to bottom. GreenStone has worked to keep fees and rates competitive with the added bonus of patronage. Greenstone has returned $235 million to its shareholders! ■
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LIVE
From the Ground Up
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Tom and Nancy Kellner live on 80 acres in Denmark, Wisconsin, a small town about 20 miles from Green Bay. Together, they operate Kellner Back Acre Garden, selling produce, eggs, poultry, goat meat and honey from a storefront on their property, through a CSA, and at local farmers markets. The CSA, or Community Supported Agriculture, started 10 years ago with eight members. Today they have over 100 people who make a commitment each year to support their garden by purchasing shares of the season’s harvest.
with a small herd of cows, a passel of hogs, ducks and rabbits. Sixteen years ago, Nancy was diagnosed with breast cancer. While Nancy was recovering, Tom bought a small flock of chickens for her to keep her mind off cancer. She also began planting vegetables, perhaps too many, Nancy notes, and neighbors would drop by to visit and help with the bountiful harvest. As Nancy’s health improved, she did more work in the garden, growing more vegetables, and eventually decided she wanted to pursue farming as small business.
In the early years of their marriage, Nancy worked on her family’s farm while Tom was away in the Navy. When Tom returned from the military, the couple dabbled in farming
“We mentored with a CSA farm for about a year to learn how much work it would be and what we could grow, and then we came back here and started our own,” she
Summer 2016 — Partners
vegetables, and pick up meat and eggs all right on their farm.”
said. With a business and marketing background from the University of Wisconsin—Green Bay, Nancy wrote a business plan for the garden and took it down to her local community bank to see about financing. “They said, ‘this isn’t going to work,’ they didn’t even want to look at my plan.” Not getting discouraged, Nancy called GreenStone and presented her proposal. “GreenStone loved the idea,” she said. “A financial services officer came out, looked around, and said OK, we can do this.” With funding from GreenStone in place, Nancy went to work. And the garden name? Nancy said Tom’s family had a cabin up north they called the “Back Acres,” and when they were thinking of a name, he said ‘Well, we always have back aches,’ so they decided on Kellner Back Acre Garden, Nancy said with a laugh. As a family-run business, Tom and Nancy’s four children also help with the garden. “They each work full-time off the farm,” she said. Her oldest son, John, helps with harvest while Robert runs the poultry operation. Rebecca is an attorney and helps with legal matters, and Courtney has a marketing background and manages the garden’s Facebook page and blog. The garden’s two hoop houses provide space for plants to grow even through the harsh Wisconsin winters. Their season technically starts in February, when they plant green onions, radishes, kale
and spinach. By spring they switch over the hoop houses to tomatoes and other summer vegetables. Currently, the farm has about 800 tomato plants in each hoop house. They moved the plants under cover this season, as last year their entire tomato crop was wiped out by the central Wisconsin blight. In addition to the two hoop houses, they also plant about 15 acres of vegetables for CSA boxes and their storefront, which they added two years ago. “We turned the front end of our barn into a self-serve store with coolers and freezers for meat products.” About the same time, the garden was certified organic by Nature’s International.
In addition to running the day to day operations of the garden, Nancy also dedicates time to educating children about the importance of agriculture and healthy eating through a Farm to School program. Tom helped build a hoop house at McKinley Academy in Manitowoc, and Nancy goes into classrooms to introduce students to new vegetables each month. “One month we learned about beets, and the students used the juice as paint for an art project. Another time we learned how to make fries out of carrot sticks and kohlrabi,” explained Nancy. Looking to the future, Nancy says she wants to continue her work with the Farm to School program and maintain the CSA business. “I just want to grow good food and educate the public about how important it is to get back to basics, back to the land.” ■
Today Nancy works with Toni Sorenson, a financial services officer at GreenStone’s Sturgeon Bay branch. “Toni was just out here the other day,” said Nancy. “She loves what we do; she believes in us.” “Kellner Back Acre Garden has a unique concept that is unlike anything else in the immediate area,” said Toni. “People can stop to get fresh
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BUILDING A CAMPFIRE As the dusk spreads across the sky, and the summer temperature remains well into the night, gathering around a campfire with family and friends is a wonderful outdoor tradition. Whether you are hanging out in your backyard, visiting a campground, or backpacking through the wilderness, building a successful campfire is a great skill to have. Prepare your site. If you need to start from scratch, find a level spot away from overhanging branches, brush, or dry grass; avoid the base of a hill. Clear a circle ten feet wide down to bare dirt. Next, hollow out a fire pit six inches deep and two feet across at the center of the cleared circle. Pile the dirt around the fire pit. Gathering fire wood. A successful fire typically needs three types of wood: tinder, kindling, and fuel. Tinder includes small twigs, dry leaves or grass, and dry needles. Kindling consists of small sticks; and lastly, fuel is larger pieces of wood. Be sure to gather some of each! Add kindling. After loosely piling a few handfuls of tinder in the center of the fire ring/ pit, there are four different common methods to adding kindling: • Tip: lay the kindling over the tinder like you are building a tent; this method is great for cooking. • Cross: crisscross the kindling over the tinder; perfect for long-lasting campfires. • Lean-to: drive a long piece of kindling into the ground at an angle over the tinder. Next, lean small pieces of kindling against the longer piece; also great for cooking. • Log cabin: surround your pile of tinder with kindling, stacking pieces at right angles. Top the “cabin” with the smallest kindling; usually the longest lasting campfire. Attend to you fire. After igniting the tinder with a match or lighter, blow lightly at the base of the fire to provide oxygen, which will help increase the intensity of the flame and further ignite the wood. As time goes on, add larger pieces of dry wood to keep it burning steadily. Remember to never leave your campfire unattended, even for a few minutes. Extinguishing your campfire. First pour water on your fire, stir the ashes, and then apply more water; repeat as often as needed to ensure ashes are cool to the touch. If you have dug your own pit, do not bury the fire as it will continue to smolder, and could catch roots on fire, which will generally lead to the surface and start a wildfire. Be completely certain the fire and its embers are out and cold before departing. ■ Source: www.smokeybear.com, www.fs.usda.gov
Skillet Corn Bread Ingredients: • • • • • • • • • •
1 cup yellow cornmeal ¾ cup all-purpose flour ¼ cup granulated sugar 1 tablespoon baking powder ½ teaspoon baking soda 1 teaspoon salt ½ cup milk 1 cup buttermilk 1 egg, lightly beaten 8 tablespoon unsalted butter, melted
Oven Instructions: 1. Preheat oven to 450 degrees and place a 9-inch cast iron skillet in the oven to heat while mixing the batter. 2. In a large bowl combine the cornmeal, flour, sugar, baking powder, baking soda and salt. Whisk in the milk, buttermilk and eggs. Add all but 1 tablespoon of the butter. 3. Remove skillet from oven and reduce the temperature to 375 degrees. Coat the bottom and sides of the skillet with the remaining butter and pour the batter into the skillet. Bake for 20 to 25 minutes, or until golden brown.
Campfire Instructions: 1. Heat skillet over the fire. 2. In a large bowl combine the cornmeal, flour, sugar, baking powder, baking soda and salt. Whisk in the milk, buttermilk and eggs. Add all but 1 tablespoon of the butter. 3. Remove skillet from fire and coat the bottom and sides with the remaining butter and pour the batter into the skillet. Cover the skillet with foil or a lid. 4. Cook over medium – low heat for 15 minutes. Remove from heat and let the bread rest still covered for an additional 5-10 minutes.
Provided by the Michigan Corn Growers Association
Commodity Cuisine...
FOOD SAFETY AT SUMMER GATHERINGS THE SUMMER SEASON OFFERS MANY OPPORTUNITIES TO CONNECT WITH FAMILY AND FRIENDS THROUGH REUNIONS, GRADUATION PARTIES, CAMPING TRIPS, YOU NAME IT! HOWEVER, CONSUMING AND PROVIDING SAFE FOOD FOR YOUR GUESTS IS ONE THING TO KEEP IN MIND. AS THE TEMPERATURES CONTINUE TO CLIMB, AND THE RISK OF FOODBORNE ILLNESSES INCREASES. REMEMBERING FOUR SIMPLE PRINCIPLES CAN HELP ENSURE NO ONE FALLS VICTIM TO UNWANTED BACTERIA: CLEAN, SEPARATE, COOK, AND CHILL.
Clean First and foremost, always wash your hands before and after handling food. Use disposable cloths or moist towelettes if you are outdoors without running water. In addition, preparing all foods on a clean surface is essential to food safety. Thoroughly washing nutritious fruits and vegetables before chopping is important even if you do not eat the skin. When you cut through the outside, this brings in all the bacteria from everything the fruit or vegetable came in contact with. Separate Cross-contamination during preparation, grilling, and serving food is a prime cause of foodborne illnesses. Keep raw meat, poultry, and seafood securely wrapped to keep their juices away from ready-to-eat foods. Plan ahead and bring extra platters and utensils to avoid one of your guests accidentally grabbing the plate that held raw hamburger, for example. Cook To accurately measure the temperature of cooked meats, use a calibrated meat thermometer; it is difficult to judge doneness by color alone. Even though you may be cooking on a very hot grill, this is the only way to know if the food is safely heated, for long enough, at a high enough temp to kill harmful bacteria. Be sure to cook foods completely all at once, as bacteria can grow between cookings, even if you refrigerate food in between. Chill On a hot and sunny day, it does not take long for food to reach the temperature danger zone (40 – 140 degrees Fahrenheit), and for bacteria to multiply to unsafe levels. Put perishable foods back in the cooler or refrigerator as soon as you finish eating, and it is recommended to avoid consuming food that has sat out for more than two hours. When using coolers to store food, pack plenty of ice, and try to keep it out of the direct sunlight. If you have any doubts, play it safe and throw it out. ■ Source: www.foodsafety.gov, www.fda.gov
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LEARN
FRAUDULENT TAX FILING... WHAT NOW? By Yvonne Fleis, Tax Accountant HAVING YOUR IDENTITY STOLEN IS OFTEN FRIGHTENING AND CAN BE TIME CONSUMING. IMAGINE FILING YOUR ANNUAL TAX RETURN, ONLY TO DISCOVER THAT SOMEONE HAS ALREADY FILED FRAUDULENTLY ON YOUR BEHALF! ANYONE WOULD FEEL A RUSH OF ANGER, CONFUSION AND FRUSTRATION; BUT WHAT STEPS SHOULD YOU TAKE ONCE YOU LEARN OF AN IDENTITY BREACH?
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1. Pull a free credit report on yourself to see if any fraudulent activity has occurred. Annualcreditreport.com is a good website to obtain a report from all three of the major credit reporting agencies. You will be required to answer questions pertaining to your credit history that only you should know before your report is provided. You will not be given your credit score (you can purchase it), but you will obtain your credit history showing length of accounts opened, closed accounts, payment history, and even what company inquired last. 2. Contact one of the big three credit reporting agencies listed below. Inform them you are an identity theft victim and you wish to place a fraud alert on your credit file. Verify that they will alert the other two companies of this issue. Fraud alerts stay on your file for 90 days; however you can request to replace the fraud alert after the 90 days if you choose.
Other warning signs of identity theft include receiving letters from the IRS stating you may owe additional tax, your refund is being offset, collection actions will be taken against you for a year you didn’t file, or that IRS records indicate you received wages from an employer that you did not work for. If something seems off, it very well could be! The IRS/state governments will NEVER contact you via email, phone or text. If you receive any suspicious inquiries, do not provide any information. Again, contact your tax professional for assistance before responding to any correspondence you receive. ■
Tax Calendar...
• TransUnion: 800-680-7289 • Experian: 888-397-3742 • Equifax: 888-766-0008
SEPTEMBER
3. File a report with your local police department for identity theft. You will be required to paper file your income tax return, and you should attach a copy of the police report or IRS form 14039 “Identity Theft Affidavit” verifying you are a victim of identity theft. You should also attach a copy of your state ID to the paper return.
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T hird quarter estimate is due for 2016 for individuals that pay estimated taxes. Corporations file a 2015 calendar year income tax return (Form 1120) if you requested an automatic six-month extension. S Corporations file a 2015 calendar year income tax return (Form 1120S) if you requested an automatic six-month extension.
4. After you e-file and are rejected, you will most likely receive correspondence from the IRS and sometimes your home state if they too have received a return electronically on your behalf. Letter 5071C from the IRS will ask you to visit idverify.irs.gov to answer some questions pertaining to your history that will help the IRS sort out who is the real taxpayer. Your state may require copies of your state IDs, 1099s and W-2s to help verify who you are. Work with your tax accountant to make sure your correspondence is accurate and that you are indeed responding to a legitimate government agency.
Partnerships file a 2015 calendar year income tax return (Form 1065) if you requested an automatic five-month extension. orporations deposit the third installment of C estimated income tax for 2016.
OCTOBER
To help protect yourself in the future, learn how to spot phishing attempts and use the helpful hints below:
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Individuals file a 2015 income tax return (Form 1040) if an automatic six month extension was requested.
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Non-farm employers file Form 941 for the third quarter to report social security, Medicare, and withholding.
• Review any monthly financial statements for any suspicious activities. • Make sure you are using strong passwords that are updated regularly. • Use software with firewall and anti-virus protections that are updated regularly.
DECEMBER
• Encrypt any emails with your private information attached.
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• Do not make it a habit to carry around sensitive information like your social security card.
Corporations deposit the fourth installment of estimated income tax for 2016.
• Do not open any attachments or emails from a source you do not recognize.
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Finding Efficiencies By Agribank
FINDING EFFICIENCIES IN ERA OF LOWER COMMODITY PRICES After a strong multi-year period in which farm incomes easily outpaced production expenses, the tide has clearly turned. In its most recent forecast, the U.S. Department of Agriculture (USDA) projects that net farm income will drop by 3 percent in 2016, marking the third-consecutive year producer revenue has fallen. This forecast includes expected cash receipts for both major crop and livestock products, which USDA believes will decline by an aggregate 0.9 percent and 4.3 percent, respectively. In this new environment of lower commodity prices, which many experts believe may extend for several years, producers will need to wring every bit of efficiency out of their operations for long-term success. THE GOOD NEWS: SOME KEY PRODUCTION EXPENSES ARE FALLING, GOVERNMENT PAYMENTS EXPECTED TO RISE In spring 2015, many producers began to notice a softening in crop input pricings and livestock maintenance costs. According to USDA, that trend is expected to continue in many of the same categories this year, led by a forecast 14 percent year-overyear dip in fuel costs, a 4.7 percent drop in feed expenses and a 4 percent decline in seed, pesticide and fertilizer prices. While this forecast calls for an overall 2.9 percent rise in net rent expenses, that number is highly dependent on the quality of crop or grazing land and a producer’s ability to negotiate. For example, a recent Purdue University agricultural economics report predicted that cash rents for Indiana producers would fall between 4 percent and 8 percent this season. Similarly, annual surveys by Iowa State University show cash rents in that state declined an average of nine percent from 2013 through 2015, with further drops expected this year.
Under these circumstances, some producers are attempting to forego the fixed-cost pressure of a traditional cash lease arrangement by taking a closer look at flexible contract options. This type of rental arrangement usually provides a lower base 33
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cash rent price, with crop revenue or yield triggers that can balance the risk/reward fulcrum for both renter and landlord. Due to expected declines in crop prices, USDA projects that direct government farm program payments will increase over 31 percent this year, reaching nearly $14 billion. For 2016, USDA notes that corn producers will likely receive about two-thirds of Agriculture Risk Coverage (ARC) payments, which are calculated on county average revenues relative to a five-year “Olympic average.” Virtually all of the remaining ARC payouts this year are expected to go to soybean and wheat producers who elected that program. Meanwhile, USDA says nearly 80 percent of Price Loss Coverage (PLC) payments will go to enrolled peanut, rice and wheat producers. THE HARDER NEWS: BALANCE SHEETS A BIT WEAKER, MORE EFFICIENCY NEEDED TO STAY HEALTHY As a general rule, farm balance sheets are in relatively good shape. After debt-to-asset ratios reached an all-time low of 10.6 percent in 2014, the gap is expected to widen to 13.2 percent this year, largely due to a modest, yet persistent drop in the value of agricultural real estate. On the debt side of the ledger, USDA projects that real estate liabilities will rise a bit over 1 percent this year, a small increase that can be attributed largely to low interest rates and continued credit availability. A greater concern is the expected rise in non-real estate debt, which is expected to jump 3.8 percent in 2016. If that forecast holds up, the level of non-real estate liabilities will have risen from $117.6 billion in 2012 to $147.5 billion this year – a 26 percent increase. However, even this rate of increase is not surprising, given that operating loan usage has been at historically low levels for the past several years. Experts believe this increase is likely due to greater producer borrowing against farm equity to finance operational and living expenses amidst lower commodity price returns. As a result, this year’s projected farm sector debt-to-equity ratio is expected to climb to 15.2 percent. While that leverage is high relative to recent history, it is much lower than what producers faced during 1980s farm crisis. Assuming producers have already taken advantage of price drops in certain input categories and have renegotiated any cash rent arrangements they may have, the potential for an extended period of low commodity prices means even greater efficiencies will be required. That means looking past low-hanging fruit and tackling broader issues or opportunities, including:
needs. In addition, producers in those five states spent another $3.4 billion that year in wages for hired labor. As a result, farm income has historically accounted for more than 30 percent of all personal income in some rural counties in this five-state area. By doing some homework on the local relationship between farm income and economic vitality, producers can determine how much negotiating leverage they may have to buy needed goods and services. Debt restructuring. Even though the current environment has provided some relief in production expense, it’s worth crunching the numbers to see how a restructuring of existing farm debt might deliver improved cash flow. Schedule time to meet with your GreenStone financial services officer to ensure all options are being discussed! ■
Non-income producing assets. Just like non-farm families, producers can accumulate a range of possessions and goods that are rarely or never used. Producers should be looking at those non-productive assets and any excess equipment. Lower farm income = more local market leverage. A key point for producers to remember is that overall farm income trends have a strong ripple effect on local and regional economies. For example, a recent Federal Reserve conference studying the effect of farm income on rural communities in Iowa, Illinois, Indiana, Michigan and Wisconsin found that producers spent nearly $27 billion in 2012 on purchased inputs, such as food, fuel, seed, fertilizer and other
ABOUT THE ARTICLE
The content herein was provided by Agribank. Agribank is one of the largest banks within the national Farm Credit System. Under the cooperative structure, Agribank is owned by the 17 associations within its district, including GreenStone.
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CROP INSURANCE: By Brandon Walters, Crop Insurance Specialist
Most producers have been there before. No matter what you do during the growing season, sometimes Mother Nature just will not cooperate and you are anticipating that your yields may fall below your guarantee. Obviously this is not the situation you would like to be in, but that’s why you purchased crop insurance to begin with.
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If you do find yourself in a claims situation, there are some important things to remember that can help the process go a lot more smoothly. • Perils - The vast majority of naturallycaused perils are included under multiple-peril crop insurance (MPCI) coverage. This includes, but is not
limited to: adverse weather, failure of irrigation water supply, fire, insect damage or plant disease (unless you improperly or insufficiently applied pest or disease control measures) and wildlife damage. Those covered under Revenue Protection are also protected from a decline in market price as well. • Timeframe - Insurance coverage generally begins at time of application or time of planting, whichever is later. The end of the insurance period is generally recognized as the earlier of: total destruction of the crop, final
harvest of the crop, abandonment of the crop, or the end of the insurance period (which is Dec. 10 for corn insured as grain and soybeans). • Insured’s responsibilities -For planted crops, the insured must notify the insurance company within 72 hours of the initial discovery of the damage or production loss, but no later than 15 days after the end of the insurance period, even if the crop has not yet been harvested. If you have a revenue protection policy and have a claim based on strictly price, the insurance company must be notified within 45 days of the harvest price announcement for the crop. • Appraisals - If you are going to harvest your planted crop in any non-traditional manner, a crop appraisal needs to be completed, otherwise you may lose out on a potential indemnity payment. The most common time an appraisal is needed is when you are going to chop corn that is insured as grain for silage. If you have a corn policy, any acreage that is not harvested traditionally as dry grain should be appraised. You should contact your agent at least a week in advance of when you are planning on harvesting, to arranged for an adjuster to come out and perform the appraisals while the
crop is still in the field. In the event you harvest before an adjuster is able to perform appraisals, representative sample strips must be left in the fields for the adjusters to use for appraisals. The strips must be at least 10 feet wide and run the entire length of the field. If you do not agree with the appraisals you have gotten from the adjuster, do not sign them. Call your Crop Insurance Specialist right away and we can have another adjuster come out and perform a second appraisal. Throughout the whole claims adjustment process, if you ever feel uneasy or that something does not seem right, contact your specialist as soon as possible. Along those same lines, if you ever have a problem with the adjuster that is working your claim and you would like someone different, let your Crop Insurance Specialist know - we can generally make that happen. Obviously no one wants to have a claim; we can all agree producing a bumper crop is much more enjoyable than receiving a large claims check. Remembering these key points will help make the process go as smooth as possible. As always, if you have questions above and beyond what you have read, please contact your specialist and they will be able to help you out. ■
Crop Insurance Calendar... JULY
1
SEPTEMBER Forage & Fall Wheat Premiums Billing Date
15
Spring Acreage Reports Due & Processing Beans Final Plant Date
29
July LGM Sales Close Date
30
Wheat & Forage Production Sales Close Date End of Insurance Period (loss reporting deadline) – Peach & Blueberry September LGM Sales Close Date
OCTOBER
AUGUST
15
Spring Premium Billing Date
26
Oat Acreage Report Due
* Please note that dates can vary by county. Please check with your crop insurance specialist for specific dates if you are unsure.
15
Forage Underwriting Report Signature Due Date
25*
Wheat Final Plant Date
28
October LGM Sales Close Date
31
End of Insurance Period (loss reporting deadline) for Fall Crops Final Claim Reporting Date for Dry Beans
Partners — Summer 2016
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CROP INSURANCE NEWS: NEW FOR 2016 – ACRSI & ACREAGE REPORTS The Acreage Crop Reporting Streamlining Initiative (ACRSI) has been a work in progress for several years at RMA. The goal is to streamline acreage reporting for producers by allowing them to report all of their acres at one location. The reported information will be shared electronically between RMA (through agents and AIP’s) and the FSA office. The ACRSI 2016 spring expansion includes all states and numerous crops. Any producer reporting acres of the ACRSI crops to their agent is already participating in the ACRSI expansion program. Now, it is up to the producer to decide if they want to report their non-MPCI crop acres to their agent as well. Producers are still required to complete, submit, and sign acreage reports with their agent. Once the acreage reports are received, the Approved Insurance Provider (AIP) will submit the acreage information to a clearing house at RMA. The RMA clearing house will then push the ACRSI data to FSA. When the producer arrives at their FSA office, the ACRSI information will be available. The producer must ask the FSA o¬ffice to pull the data from ACRSI to pre-populate their FSA report. The producer will review the completed acres at FSA before signing. This will streamline the process and result in a less time consuming FSA appointment. By now, you should have received your Acreage Report for 2016 Spring planted crops. It is the producer’s responsibility to report the crop that was planted in each section, the planting date, and the percent share
Important Date Reminder Late fees will be charged on any unpaid premium on Oct. 1, 2016. Please make note of this important change as late fees cannot be waived. If you cannot pay your premium before the due date, please contact your AIP to make payment arrangements. Payment is due regardless of whether or not you have an outstanding claim. ■ Hail Insurance It is not too late to purchase Hail Insurance for 2016! Hail is a separate policy from multiperil crop insurance coverage. As an added bonus, a hail policy can provide coverage for fire, lightning, vandalism/ malicious mischief and transit to
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Summer 2016 — Partners
the first place of storage. Rates and coverage can vary by crop and county. Keep in mind, hail insurance must be purchased before damage occurs. Contact us today to set up an appointment to review your options. ■
of that crop. As always, reporting the crop accurately is very important. Corrections or changes can no longer be made after the reporting deadline, which was July 15. If you would like to participate in the new ACRSI program, have any questions or would like assistance, contact your local GreenStone Crop Insurance Specialist who is more than willing to help. ■
Appraisals are required when a customer plans to do something with the crop other than harvest in the normal manner. If you do not plan to take your wheat/forage to harvest, the acres must be appraised prior to destruction. ■
fresh review at any time during the year or at claims time. You will be asked to prove that you have sold your apples as fresh and at what price they were sold. The requirement is that 50 percent or more were sold as fresh, at a fresh price in at least one out of the last four years. Call your GreenStone Crop Insurance Specialist if you need more information regarding what documents can be submitted and what needs to be on those documents. If you cannot prove fresh sales, RMA requires that your apples be changed to processing for the current crop year. ■
Fresh Apple Reviews
Forage Production
Please remember, a fresh apple policy can be signaled out for a
If you think you may be facing a forage production loss, make sure
2016 Fall Wheat & Forage Claims
to contact your Crop Insurance Specialist to file a claim. If you did not have forage insurance for the 2016 crop year and are interested for 2017, the sales close date is the same as wheat, September 30. ■ Crop Insurance Alert! Before You Chop! Even though the corn crop is still young, it will not be long until it is time to fill the bunker silo. Before chopping corn for silage, please call and arrange for an appraisal ahead of time. Every effort will be made to have your crop appraised before you chop. Otherwise, you will be instructed on how to leave samples in your field for later evaluation. ■
Ag Education takes shape at Jackson College Starting this fall, Jackson College will offer a new program focusing on education in agriculture. The Agricultural Technology—Associate of Applied Science program prepares students for careers in skilled agricultural and agri-business areas.
opportunity to learn, and visited other colleges in the Midwest offering similar programs. “We wanted to offer affordable, quality agricultural education for Michigan students,” said Sanford, noting there were very few options available in the area.
The 61-credit degree will provide students with the diverse skillset necessary to work competently within the various sectors of the agri-food industry, including: agricultural production (plant or livestock), precision farming, agribusiness and finance, pest management, soil or other conversation management, and food processing.
Jackson College, Dean of Arts and Sciences, Todd Butler agrees, “We’ve talked to several in the community and in the tri-county area, and there is a demand for agriculture education,” he said.
GreenStone customer, Chris Sanford, is a member of the Agriculture Advisory Board at Jackson College. He has been involved in establishing this program since the beginning, more than two years ago. While working to develop the best program design, they took the
i
The program will offer two tracks, one as an Associate of Science for students looking to transfer to a four-year bachelor’s degree program in agriculture; and another track, an Associate of Applied Science, for those wanting to complete a two-year degree and then go to work in farming or agriculture-related business. Know someone looking for a local agriculture education option? Learn more about the program at www.jccmi.edu. ■
WHAT IS HTTPS, AND WHY DOES IT MATTER?... Knowing what HTTPS means is essential when banking, shopping, or attempting to avoid phishing attempts online - it indicates a secure web connection. When you connect to a website with HTTP, all the data is sent over the internet in clear text. This means an eavesdropper on a public wireless network, your internet service provider (ISP), or the National Security Agency (NSA) could see the web pages you are visiting along with the data you are transferring back and forth. The eavesdropper could potentially see passwords, credit cards or other data if sent over a HTTP connection; which is never encrypted. HTTPS sites add an extra layer of protection by concealing sensitive data from an eavesdropper.
You can tell if you are connected to a website using HTTPS if the address begins with https:// (includes the “s”), and you will also notice the lock icon located in your browser’s address bar. HTTPS is vital whenever you are logging into a website or giving payment details online. If you are about to enter a password or other personal information, check your address bar and ensure you are on an HTTPS site. If you are not, it may not be safe to enter such sensitive data. GreenStone is keenly sensitive to the information security of our customers. Among other proactive precautions, our My Access site provides this layer of security for your safe exchange of electronic documents and information.
...Tech Tip
Partners — Summer 2016
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3515 West Road East Lansing, MI 48823
Partnering for a century... For 100 years, GreenStone has provided financial services to our members. We have evolved to meet your changing needs and will continue to support rural communities and agriculture day in and day out, for generations to come. Contact your local GreenStone branch today!
800-444-3276
www.greenstonefcs.com