Fall 2008
Editor’s Note
Editor’s Note
Autumn is upon us…and with it, for many of our producers comes the harvest season. We sincerely hope it is a safe and bountiful one for all of you. Agriculture is certainly in the midst of experiencing many changes, but it’s also important to always remember how fortunate we are to be involved in such a wonderful industry that has such a positive impact on everyone. We hope during this busy time of year, you still find a moment to enjoy this latest issue of Partners—which includes a feature article on a couple from
Wisconsin, highlights from this year’s GreenStone scholarship winners, and details on our last Holiday Card Coloring contest. Happy reading…and as always, your comments and ideas are welcomed. Published by
CONTENTS
FALL2008
FEATURES
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IN EVERY ISSUE
Young, Beginning and Small Farmer Focus Mario Micheli and his wife, Claire Thompson, were casually looking for a place to buy in Door County. They never dreamed it would take them down the path of a major life change.
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GreenStone FCS Announces Hiring of New Chief Executive Officer The Board of Directors of GreenStone Farm Credit Services has named Dave Armstrong as the next President and CEO.
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GreenStone Awards Scholarships GreenStone Farm Credit Services recently awarded $12,000 in scholarships to six students.
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CEO Comments Market Outlook Director’s Corner News Update
COLUMNS
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Lessons Learned by Dr. David Kohl
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Requirements for Above Ground Storage Tanks by Matthew C. Schroeder P.E. and Christopher G. Paré.
CEO Comments
CEO Comments by Jim Schiller
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all 2008—we are now heading into the home stretch to finish a generally successful year. Volatility continues to be the buzz word, and as always, we will see different results for different parts of the agricultural industry. Most will recall that at the beginning of the growing season and until mid-July we were looking at generally a bumper crop throughout our territory. Then, in some areas, we did not see measurable rainfall until mid-September. The corn crop will likely be “ok,” but soybeans will have some significant reduction in yield. The livestock and poultry sectors continue to be challenged as feed costs remain high. While it appears 2008 will finish at least reasonable for most of our operators, there is concern regarding increased costs of inputs and continued low prices for our hog operators. Fortunately, many of our customers have built liquidity over the past few years and, together with following prudent risk management practices, are weathering the storm. GreenStone—A Stable Force in A Volatile Economy GreenStone continues to perform well financially. Success in all of our financial disciplines allows us to provide loans at a very competitive price and accrue funds for continued patronage distribution of a portion of our earnings. Growth is strong and credit quality remains sound. Recent volatility in the financial markets has brought questions regarding the Farm Credit System and how is GreenStone, as part of that System, affected? How does the U.S. Treasury’s plan to assist Fannie and Freddie impact the Farm Credit System? It is good news to note that there is no direct impact. Assistance plans only include the housing government-sponsored enterprises (GSEs). The Farm Credit System lends to agriculture with Congressional oversight of the System provided by the agriculture committees in the House and Senate, not the Congressional Banking Committees. The government’s assistance to the housing GSEs has improved debt spreads over treasury which has indirectly impacted the Farm Credit System to our benefit. Our spreads tend to move in line with the housing GSE spreads. The financial position of the Farm Credit System, including capital levels and credit quality, are strong which supports the System’s AAA credit rating. The next major difference between the Farm Credit System and the housing GSEs is the structure of the Farm Credit System. It is a cooperative that is owned by its borrowers and has been serving rural America since 1916. The Farm Credit System with the exception of Farmer Mac (a separately chartered entity) has never
had publicly traded common stock like the housing GSEs. Benefits derived from the Farm Credit System’s GSE status, which includes our GreenStone organization, serves to enhance the ability of us to meet our Congressionally-mandated mission to provide a stable and dependable source of financing to rural America. Residual benefits are returned to borrowers in the form of patronage. The Farm Credit System and GreenStone are financially strong. As cooperative-structured companies, we are better aligned with a long-term mission based focus. Stock companies can be motivated toward stock value appreciation. Short-term strategies may be emphasized to influence the stock price. It is another positive reason to borrow from GreenStone, a cooperative and part of the Farm Credit System vs. our competitors who are mostly stock investment structured. Transition At the end of this year I will be leaving this great Farm Credit System and the GreenStone organization after nearly 37 years. David Armstrong will be assuming the role as Chief Executive Officer on January 1. He has over 27 years of experience with GreenStone and predecessor organizations and has been instrumental in making GreenStone successful starting with the mergers in 2000 and the addition of northeast Wisconsin on January 1, 2003. Together with a competent Board of Directors and an energized leadership team and staff I am confident that they will carry forward to continue GreenStone’s focus on our customers and bring value to agriculture and the rural communities. Personally, I will miss the excitement of the business and the people—customers, staff, and other stakeholders—that I interact with everyday. I have truly enjoyed a wonderful career serving an industry that I grew up with and will continuously support. Farming, agriculture, and rural communities will always be part of my life. I would like to publicly acknowledge and thank the many farmers and customers that have supported this GreenStone organization, the Board of Directors for their vision, and a highly energized staff for making it all happen. While I will miss all of the business activity, I look forward to changing the pace slightly, staying connected with agriculture and enjoying travel, fishing, golf, and water sports at our lake home on Devils Lake. Again, thank you for the opportunity to be of service and for the many friendships I have established. Agriculture is an exciting and dynamic industry with a tremendous future, and I wish all of you success and happiness.
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Market Outlook
MARKET
OUTLOOK FALL2008 By Ken Lake
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n the summer 2008 edition of my newsletter, I talked about the futility of trying to predict moves in markets that clearly display no semblance of order. Now, three months later the horizon is a bit clearer, but markets will likely continue to show lots of volatility and erratic price moves. December Corn made a high in late June of $7.99, but recently traded around $5.50. November Soybeans traded over $16.00 at the same time and have recently dropped to under $12.00. December Wheat made a high of just under $13.00 on March 11, and traded under $8.00 recently. Future price moves in corn and soybeans will be dependent on both demand and production input costs. It certainly looks to me as if values for both are close to seasonal lows. I would expect to see sideways market movement through harvest and then a tendency to increase into the spring of 2009 to entice acres to be planted. I don’t think the summer of 2008 highs will be exceeded, but if input costs to grow these crops do not fall on lowered demand for the expensive stuff, then anything could happen. The market must show farmers a value that gets acres in the ground, but once planted, we could witness an appreciable price decline on a lower demand/increase stocks scenario, particularly in corn. Regarding lower demand, it is likely too early to tell the extent of the damage done in the corn market when it traded nearly $8.00, but it is certainly significant. Ethanol production is still on the increase as plants under construction are being commissioned but many, many more projects are now on hold or dead. I talked in my last newsletter about the idea that Ethanol value has attached itself to corn value…that theory is being proven as Ethanol price fell a dollar a gallon when corn dropped two dollars a bushel, a clear signal to ethanol-
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producer wannabes that if you think you are going to turn cheap corn into high value energy…think again, it may never happen again. Yet the Biofuels mandate in the Renewable Fuels Standard continues to over-stimulate production– depressing ethanol value to historic discounts to the unleaded gasoline market. You will continue to hear talk about lowering the Biofuels mandate in the RFS, a move in my opinion that ultimately supports both ethanol and corn price. The soybean market has been marked by strong institutional liquidation as fundamentals continue to lower both U.S. yield per acre and total production. The market must ultimately reconcile the fact that additional supplies are needed and show farmers higher prices. Not only has wheat fallen $5.00 a bushel from its high on the Chicago Board of Trade, wheat basis has been under extreme pressure as well, reflective of the size of the 2008 Soft Red Winter Wheat crop. Production in Ohio, Indiana, Michigan and Ontario overwhelmed the cash grain market. Exporters had more supplies than they could use or sell within the harvest period. Combine that with futures trading around $8.00/bu., making ownership of wheat very expensive for processors and millers. The market will need the country to carry the large supply of red wheat over the course of the marketing year in order to work it into the demand chain. You should expect SRWW values to remain under pressure for the foreseeable future.
Ken Lake is the Origination Services Coordinator for Michigan Agricultural Commodities Inc., Lansing, Michigan, and a licensed commodities broker registered with the National Futures Association. The opinions stated herein are not necessarily those of GreenStone FCS.
Farm Management
Lessons Learned from the General Economy By Dr. David Kohl
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hen is the curtain going to drop on the agricultural economy with all of the economic challenges in the secondary markets, urban and suburban real estate, and the auto industry? If you are involved in the livestock industry, the financial stress is already upon you. With skyrocketing input costs and revenue volatility in the grain markets, stress could be just around the corner. What are some lessons learned from other industries that are having problems?
Lesson One Greed, speculation and easy credit are a recipe for financial turmoil. No documentation and low documentation loans with disregard for earnings, cash flow, and asset and liability positions can be costly to both the lender and borrower. Cash flow and earnings repay financial obligations. Knowing your costs and financial metrics are very critical in making sound, objective financial decisions. Having another set of eyes, like a lender or financial expert, can be useful in decision making as well.
Lesson Two Dr. Ed Seifried has a great saying he learned from his father. “If it grows too fast, it’s a weed.” Keep this thought in mind as you acquire more land and assets at skyrocketing costs. In a
global economic environment there will be long term pressure on asset structure in the United States. In the long run, asset turnover, asset utilization, and margin management are a recipe for financial success.
Lesson Three Economies go through cycles, and the agricultural economy is no different. Position your business capital to be able to fight through the cycle on the downturn and take advantage of opportunities. This requires disciplined, objective growth while maintaining cash and working capital reserves.
Dr. David M. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University (Virginia Tech), Blacksburg, Virginia. He has conducted more than 3,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FmHA, and regulators, as well as producer and agribusiness groups. He has published four books and over 400 articles on financial and business-related topics in journals, extension, and other popular publications. The opinions stated herein are not necessarily those of GreenStone FCS.
Comments? Please send your remarks to AgGlobeTrotter@accountlist.com. I would like to know what you are thinking. –David Kohl
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Guest Column
r o f s t n e m e r i Requ
Above Ground
Storage Tanks
and How They Affect Agriculture
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o you store gasoline or diesel fuel in above ground storage tanks (ASTs) at your farm? Do you store 1,100 gallons or more of one of these products at your farm in a single AST? Do you know these ASTs must be registered? Do you know there are new requirements for these ASTs in Michigan? These are the types of questions we have been asking our clients. Although many farmers have stored fuel in ASTs for years or decades, they were surprised to learn that in the state of Michigan there are rules, requirements, and registration procedures for these ASTs. What is most significant is that the requirements that apply to ASTs are changing. As of August 13, 2008, any existing AST that stores flammable or combustible materials (such as fuels) must have (1) spill protection, (2) overfill protection, and (3) corrosion protection. This article presents an overview of the registration procedures and new AST requirements. REGISTRATION If you are installing a new AST with greater than 1,100gallon capacity, you need to register this AST with the Michigan Department of Environmental Quality (MDEQ). A plan review is to be submitted to the MDEQ and a fee of $203 is required for the review. Each year after the installation of the AST you are required to pay a registration fee of $61.50. The objective of the registration is to document the date of AST installation, type of construction, type of fuel stored, and other relevant information. A database of this information can
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By Matthew C. Schroeder P.E. and Christopher G. Paré The Dragun Corporation be used by the regulatory agency to track compliance, record keeping, inspections, and annual fee payment. NEW REQUIREMENTS As mentioned above, the new rules effective August 13, 2008, require ASTs to have (1) spill protection, (2) overfill protection, and (3) corrosion protection. Spill protection involves containing the fuel spilled at the fill port. A “spill containment bucket” can be installed around the fill port to contain any small spills due to over fill when a bulk load of fuel is delivered. Overfill protection involves stopping the tank from being overfilled and spilling fuel onto the surrounding soil. A simple device that acts as a float valve can be installed to stop the fuel delivery or significantly slow down the flow of fuel being delivered. Typically, these devices are installed at the fill port. Additionally, overfill alarms can be utilized to notify the operator when the tank is approaching capacity during filling.
Corrosion protection involves ensuring the tank and other components will not degrade to the point at which a release will occur to the surrounding soil. A number of options for addressing the requirement are available to AST owners, including: • Installation of cathodic protection system
If you have any questions regarding the information contained in this article, or if you have concerns about your own compliance status, please contact Mr. Matthew Schroeder, P.E. at mschroeder@dragun.com, or Mr. Chris Paré at cpare@dragun.com, or by phone at (248) 932-0228.
• Raising the AST to allow for inspection of tank bottom • Installation of a double bottom or barrier • Certified inspection to determine corrosion rate RECOMMENDATIONS For those of you with an AST in Michigan, you may be affected by the August 2008 deadline. You can do the initial inspection and ask yourself, “Is there a risk of spillage from tank/piping failure because of significant corrosion or overfill?” Another question may be, “What would happen if there was a fuel spill? How would I contain and control the spill?” Because of these new requirements, you may need to evaluate how you store fuel on your farm. If you purchase a new tank that is under 1,100-gallon capacity, you will not need to register the AST with the MDEQ. We recommend that if you purchase a new AST make sure it has the three new requirements discussed in the above section. The objective of this article is to educate farmers about regulations affecting your ASTs and motivate you to perform your own inspection on the farm. In the end, compliance with the rules is a business decision; you can keep the existing tanks and upgrade to comply with the new requirements or buy a new AST that complies. If you are ready to make upgrades or have your AST inspected, you can always contact a professional engineer, certified inspector, or environmental professional to assist you.
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Director’s Corner
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R o t t g o g c e S n buck t ee EGION II DIRECTO R R U R YO
, In a financial business with a 16-person board guiding the association, you need experience, diversity and teamwork…Scott Roggenbuck seems to have all three in Harbor Beach, Michigan. Although Scott is a relatively new board member, first elected in 2007, he has been farming for over 25 years with a family team including his Dad, two brothers and son. Together they work roughly 1,700 acres growing corn, soybeans, wheat and often beans; and raise around 500 head of beef cattle. Along side, though of equal significance, they run a seed corn agency, selling seed for Pioneer Hi-Bred. Scott’s wife, Cindy, is another key member of his team. She handles the office work, manages the farm books, drives truck and keeps everything organized for him. “I certainly get a lot of support from my wife. She is the most ambitious person I have ever met. We have a great home life, and have been blessed in life and family,” Scott remarked. His daughter, Ashley, attends Saginaw Valley State University; and his son, Aaron, works with Scott on the farm.
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“I also have a special passion to work with the young, beginning, and small farmers. They are our future and I think we owe it to them to help them find their place in agriculture.” What is your main goal or issue you would like to address as a director? Right now, my main goal is to make sure we maintain a strong credit flow to the GreenStone customers, especially during these volatile times. I am concerned about the credit crunch we are currently experiencing. Therefore, I believe it is important that we continue to be able to maintain credit to our customers; this is a very essential part of what we do. I also have a special passion to work with the young, beginning, and small farmers. They are our future and I think we owe it to them to help them find their place in agriculture. I work with some really talented folks and am impressed with the quality of this next generation, the business skills they encompass, the way they embrace technology, their natural ability to utilize their talents, and their admirable drive for agriculture—these qualities are going to get them a long way in today’s agricultural world!
GreenStone FCS customers encompass a uniquely diverse industry of products and services. In general, what do you see as the key to their success in the future? The diversity of the GreenStone customer base is key to the success of our association. We have been able to take advantage of the strong growth in areas like dairy and blueberries while we wait for other industries like timber and pork to recover. I feel we need to remain flexible and be quick to meet the needs of the marketplace by leveraging our diversity. Of course, one area we want to continue to work toward is financing more of the economic growth in rural America—I think there is great promise there.
What do you view as GreenStone’s strategy to accomplish its mission and ensure the vision of the organization is achieved? I think it is simple—provide outstanding customer service, competitive rates and products that fit the GreenStone customer needs. If we can do this, we can accomplish our mission and ensure the vision of the organization. It is pretty cut and dry!
“There are fewer farmers feeding so many more people than ever in history... they will be asked to do even more in the future, and they will continue to succeed!” What has been the most significant advancement you have seen in your lifetime in regards to agriculture? I’ve been farming since 1981 and there have been so many changes in agriculture during that time: computers, GPS, transgenic crops, ethanol—the list is long. But I believe the most significant advance I’ve seen is the overall efficiency of the American farmer. There are fewer farmers feeding so many more people than ever in history... they will be asked to do even more in the future, and they will continue to succeed!
Final Thoughts? I do enjoy being on the board. I’ve learned a lot, and have picked up so much from our members. It is nice to be on a board where everything is working well and going so strong, but I think we need to keep our head in the game and not become complacent. I realize these are volatile times in agriculture and we need to keep our eye on the ball—I farmed in the 80’s, I remember what it can be like. Fall 2008 PARTNERS
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Farm Shows
Summer FARM SHOW Wrap–up This summer, GreenStone hosted exhibits at both the Michigan Ag Expo and the Wisconsin Farm Technology Days. At the 2008 Michigan Ag Expo, GreenStone sponsored a paintball shooting gallery. As a result of expo attendees hitting the bullseye on the farm varmint targets, GreenStone made a donation to the Michigan 4-H Foundation. GreenStone also awarded a $500 Cabelas shopping spree to the lucky winner Troy Haynes, a dairy farmer in Middleton, Michigan. The northeast Wisconsin Region of GreenStone Farm Credit Services hosted the exhibit at the 2008 Wisconsin Farm Technology Days. Heavy rain and storms cut the show short this year but several prizes were awarded to the lucky winners during the two days of the show. William Dallman of Reedsville, Wisconsin and Aaron Behmke of Peshtigo, Wisconsin both won a $100 Fleet Farm gift card. Bob and Sue Hackendorf of Athens, Wisconsin and JenLynn Zutz of Valders, Wisconsin won handheld GPS systems which were donated by Rural Community Insurance Services and the Great American Insurance Company. The grand prize winner was Erwin Waack. He was given the choice of going on a five-day Carnival Cruise or use of a John Deere or Case IH compact tractor for one year.
Miss Michigan 2008, As hle GreenStone paintball sho e Baracy, tried her luck at the oting gallery.
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Laredo Adams, future farme r, and his parents stopped by the GreenSton e exhibit during Ag Expo. He is the grandson of Gre customer Gary Adams, of Bro enStone oklyn, Michigan.
ting their skills in the Participants had fun tes ry. paintball shooting galle
Dairy Benchmark
dairy farms in the program to produce customized reports and graphs that profile your farm and illustrate how it is performing among other farms of similar size. A few of the many reports you’ll receive are: • Key Profit Indicators • Your Farm’s Historical Analysis (up to 5 years)
How does your dairy business stack up?
• Comparative Gross Margin Analysis—your farm to size benchmark and top 20 farms • Financial Ratios Summary • Culling, Internal Herd Growth, Calves DOA, Equipment Investment and Feed Analysis • Range of Key Factors for Profitability, Production, Marketing, Cost Control Measures, Labor Efficiency and Financial Factors • Regional Benchmarks • Your Farm’s Comparison to Farms of Your Herd Size • Your Farm’s Comparison to Top 20 Farms in Benchmark
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airy farmers, how is your farm’s business performance? The Large Dairy Farm Benchmark Program can measure your dairy farm’s business performance. It shows how your farm’s performance compares with over 250 other dairy farm businesses in the program. You’ll get tough questions answered about improving your business in a practical setting. You can learn how to decrease labor expenses, whether or not you should board out your youngstock, when or if it’s the right time to expand, or why you may have had a large drop in production last year. Also, participating in the program means you’ll receive help from a GreenStone Farm Credit Services Commercial Financial Services Officer to compile a worksheet that profiles many aspects of your business, from income to production. You will also need to provide a balance sheet and income analysis. All of your information is kept strictly confidential. Farm Credit Services then incorporates your numbers with data from all
Participating in a comprehensive, two-day seminar that is customized to the benchmark information from your unique group is another benefit you’ll get. You will take part in practical hands-on exercises to help you analyze and enhance your farm’s performance. The interaction between participants involved in the program allows for the sharing of information and ideas. The minimum herd size to participate is 300 cows or expansion within the next year. The 2009 seminar will be held from noon on March 31, 2009 through noon on April 1, 2009 in Liverpool, New York. GreenStone FCS will charter a bus which will depart on March 30 and return April 1. Travel arrangements will include some farm tours. Don’t miss this opportunity as several top level dairy industry speakers will present at this event. Following the seminar, if requested, a GreenStone FCS Commercial Financial Services Officer will visit your farm to review your Large Dairy Farm Benchmark Report and develop a personalized action plan. The deadline to join the program is January 15, 2009. For information on program fees, contact Dana Sue Kirk at (989) 224-9321/800-622-9187, Ben Spitzley at (616)527-1930/800968-8421 or Marisa Bramer at (616)527-1930/800-968-8421.
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Young, Beginning, and Small Farmer Focus
By Laura Moser It just didn’t seem right to Mario Micheli and his wife, Claire Thompson, to be tilling the soil, raising fresh vegetables and plants for the City Farmers’ Market, while the busy I-94 freeway buzzed alongside them. While Mario and Claire loved the chunk of land they carved out of the rented community garden plot in Milwaukee, they still felt there was more they could be doing to fulfill their love of the outdoors and “farming.”
On the Cover: Mario and Claire of Clario Farms display their merchandise at the Milwaukee Farmers’ Market.
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“We had a desire to be outside,” Mario says. “We were worn down in the city and found ourselves choosing to watch the sunsets out in the garden rather then spending time in local clubs and cafes.” On most weekends, Mario and Claire would drive north to Door County to visit friends that ran a local orchard. Their attraction to the Door County area had them keeping their eyes open for a future “retirement place.” While they were casually looking for a place to buy, they never dreamed it would take them down the path of a major life change. “It has been a series of fortunate events,” Mario says. “We started talking more and more about moving to the Door County area. Then a career opportunity for Claire with the Extension Service opened up. Our house in Milwaukee sold quickly and for a good price, so we started looking for a farm. We were lucky to find one that was the right size since most farms have been parceled out leaving only an acre or two with the house. Within a few short months of Claire taking her position, we had purchased our 40-acre farm. The stars just lined up right with this one!” To those watching the lifestyle change, it may have appeared that the young, professional couple from the city was trading it all in for the “simple life.” But in actuality the young couple was in store for some of the hardest work they had ever faced. “There is nothing simple about what we are doing,” Mario says. “The house and buildings needed major repair, and the land needed to be built up after years
of cropping. We were clueless about so much that needed to be done. We never would have made it without the help of our friends.” Today, just 18 months later, they have
“Our neighbors have made this so much easier for us. Their advice and reassurance have been invaluable.” established a successful fruit and vegetable presence at the local Farmers’ Market and are looking to expand to more on-farm sales and a wider variety of products, and potentially a CSA (Community Supported Agriculture) program. While neither has given up their “day job”, Mario and Claire are loving the satisfaction that comes from tilling the soil. “It has been a shift in mentality,” Mario says. “We are thinking more about being happy than money.” While the renovations and first
season of gardening held many surprises for Mario and Claire, the most pleasing surprise to them has been the helpfulness of their neighbors. After the first snowfall, the neighbors John and Cheryl Eberle, whom they had not met yet, cleared their driveway for them. That neighborly gesture started a friendship that has benefited Mario and Claire time and time again. “Our neighbors have made this so much easier for us. Their advice and reassurance have been invaluable,” Mario says. The five years that Mario and Claire put into their garden plot in Milwaukee gave them the experience to put in a large garden on their farm. While they were building up their garden in Milwaukee, they read lots of books and gathered information off the Internet to learn all they could about raising organic produce. They made small test strips in the garden to see what grew well in different situations. While they were comfortable with the gardening, raising livestock was a bit more intimidating for them. Their first venture was
Above, Claire gives one of the farm’s buildings a much needed facelift.
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with organic chickens to supply eggs for the farm stand and on-farm sales. They then bought a couple calves and some Katahdin sheep. “We have come to the realization that people want organic, grass-fed beef and lamb,” Mario says. “We are incrementally building up a herd. We need to see how much is involved and how well we can do with it. We are finding that we really enjoy having the animals around.” Mario and Claire are excited about the future possibilities of their new farm and lifestyle but they are cautious not to take on too much too quickly. Striking the right balance of being successful, while being able to manage it on their own is important to them. Mario, a freelance graphic artist and Web site designer, is able to work from home which is beneficial to keeping up with the daily chores on the farm. On the weekend, they manage their stand at the Farmers’ Market. This season they have had a market for all their products, which keeps them optimistic
for the future. “We only put in a one-acre garden this year, next year it will be at least two acres, maybe more,” Mario says. Mario and Claire’s farming education has also included the ins and outs of farm financing. When the credit union they had always worked with told them they didn’t write farm loans, they were thrown for a loop. Then their friends told them about GreenStone Farm Credit Services. “The financing issues that came up with the farm were intimidating to us,” Mario says. Our financial officer, Toni Sorenson, has been very helpful and supportive of what we are doing. We believe in using credit wisely and for as little as you can and she has been understanding of that and tailors her approach to meet our objectives.” The popularity of local Farmers’ Markets and the desire to buy locally grown food may have other couples thinking of making a lifestyle change like Mario and Claire, and while it is doable, they know they couldn’t have
Mario shows off his new toy, a New Holland 476 small square baler.
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done it without the help of friends. They also advise others who may be looking to do something similar to be prepared for costly start-up items like a tractor and building renovations. They also suggest making sure you buy as much land as you think you will need. “We rent out the majority of our land now, but it is there so we can expand into it,” Mario says. “I wouldn’t want to outgrow the farm right away – it is too hard to find additional chunks of farm land.” Changes in Mario and Claire’s lives will be taking place again this winter, as they become parents for the first time. “Something about being on the farm got us thinking about the future and needing some help around here,” Mario quips. You can find out more about Clario Farms by visiting their web site: www. clariofarms.com. If you are in the Door County area, they can be found every Saturday at the Sturgeon Bay Farmers’ Market.
Sale Leaseback
Consider a Sale Leaseback for End of Year Tax Planning! When it comes to year-end tax planning, many people are looking for ways to spend money and avoid paying taxes. What many overlook as a viable option is leasing in the form of a sale leaseback. If you have purchased equipment, a building, grain bin or installed irrigation equipment in the past year and either paid cash or financed that item, you can sell that asset to GreenStone Farm Credit Services and we can lease it back to you. Sale leasebacks are a simple process. Provide a copy of the purchase invoice to your local GreenStone representative to verify the price you paid for the asset and they will take care of the rest. Because there are so many ways to structure a lease, they will ask you several questions in order to make sure we meet your individual financial needs. Based on the information you provide, we will calculate a repayment structure specifically for you. If you are unsure of what your needs are, talk to your accountant or ask one of GreenStone’s staff tax specialists. The benefits of a sale leaseback, as well as any lease, are to maximize your tax savings by writing an asset off quicker than normal depreciation. In addition, if you are at the higher limits of your Section 179 write offs, leasing also provides a tool to reduce the upper thresholds and get you back into the deductible levels. Some of the other benefits of leasing are
that it improves your working capital position, cash flow, helps avoid forth quarter depreciation limits and it can also be used for estate planning purposes. There are many ways to structure a lease to get the maximum tax savings benefits from your purchased assets. Ask a GreenStone representative for more details on how leasing can benefit your operation and put money back in your pocket.
CLARITY GAIN IT–PROTECT YOUR ASSETS AND THE ENVIRONMENT
Sustainable practices Community awareness Market impact Environmental balance Energy change Learn how to master them all.
Agriculture’s Conference on the Environment January 28, 2009 • Lansing Center, Lansing, MI Get more information and register at www.maeap.org/ACE
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New CEO
GreenStone FCS Announces Hiring of New Chief Executive Officer The Board of Directors of GreenStone Farm Credit Services has named Dave Armstrong as the next President and CEO. Armstrong, who currently serves as the Executive Vice President of Customer Delivery for GreenStone, will assume full responsibilities for the position on January 1, 2009. He will succeed Jim Schiller, who is retiring as President and CEO of GreenStone at the end of this year. Armstrong has nearly 27 years of experience with Farm Credit Services in Michigan. After his graduation from Michigan State University with a bachelor’s degree in Animal Science, he started his career as a loan officer with the Production Credit Association of Southeastern Michigan in 1981.
“I look forward to continuing to work closely with our management and staff to help assure that we strive every day to deliver on our mission…to promote the success of our customers and the rural community by being the best at providing credit and financial services.”
In 1985 he transferred to Farm Credit Services of East Central Michigan and assumed the role of branch manager. He later was promoted to Vice President of Sales and Marketing, and in 1996 he became the Chief Executive Officer of FCS of East Central Michigan. He served in that role until 1999, when the four Farm Credit associations in Michigan merged to form GreenStone Farm Credit Services, at which time he assumed his current role. Armstrong has held many community leadership roles over the years, and currently serves as Treasurer for the Michigan FFA Foundation and Board Vice-Chair for Rural Partners of Michigan. According to GreenStone FCS Board Chairman Lyn Uphaus, the appointment will help provide continuity of direction for the organization and allow it to maintain the momentum it has been building in serving the marketplace. “The Board of Directors is very pleased with the performance our association has demonstrated over the past several years and we are extremely confident that Dave will be a tremendous leader for our organization going forward,” said Uphaus. Armstrong looks forward to taking on his new duties within the organization. “I welcome the opportunity to assume the role of President and CEO of such a great organization,” said Armstrong. “I look forward to continuing to work closely with our management and staff to help assure that we strive every day to deliver on our mission…to promote the success of our customers and the rural community by being the best at providing credit and financial services.”
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PARTNERS Fall 2008
News Update
News Update 2008 Michigan State Fair Grand Champion Butter GreenStone was proud to be a supporter of the 2008 Michigan State Fair Livestock Auction. The auction, which provides educational funding to support the youth in agriculture, grossed over $135,000.
GreenStone supported the event by purchasing the 2008 Grand Champion Butter that was produced by the Michigan Milk Producers Association Constantine Plant.
Crop Insurance deadlines fast approaching... Fall acreage reports will be mailed in October 2008 for wheat and forage. At this time, it is the customer’s responsibility to report the following information: what crop was planted in each section, the date that crop was planted, and your percent of share of that crop. November 20 is the sign up deadline for purchasing a new fruit crop insurance policy or for making changes to your existing policy. Visit your local GreenStone FCS branch or call 800-444-FARM to speak with your Crop Insurance representative for more information.
AutumnFest 2008 The Michigan State University College of Agriculture and Natural Resources is once again planning for AutumnFest, scheduled for Saturday, November 8, at the MSU Pavilion for Agriculture and Livestock Education. The event, which starts three and half hours prior to the kickoff of the MSU–Purdue football game, is an opportunity to join friends, family and fellow Spartans for a day filled with food, fun and football. Guests will have the chance to mingle with supporters from Michigan’s agricultural and natural resources industries, while raising money for the ANR Alumni Association Scholarship Fund, CANR student activities and alumni programming. Highlights include a superbrunch, silent and live auctions, raffles, Sparty, the MSU Pep Band and cheerleaders, and children’s games. Adult brunch tickets are $20 prior to the event and $25 at the door; student brunch tickets (ages 621) are $10; while children five and under are free. Tickets for the football game are $46 each. For more information on AutumnFest, or to register for the event, call 517-355-0284 or e-mail anralum@msu.edu.
SURE Disaster Program Recent bulletins from the Farm Service Agency have indicated that for a producer to be eligible for disaster funding in the future, all crops that are grown on their farm need to be covered with a crop insurance policy. This also includes pasture land. If you have questions about the new disaster program, SURE, contact your local FSA office for further information.
Fall 2008 PARTNERS
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GreenStone Scholarships
GreenStone Awards Scholarships
Dustin
GreenStone Farm Credit Services recently awarded $2,000 scholarships to five students from Michigan, who were chosen by the College of Agriculture and Natural Resources at Michigan State University, and one student in Wisconsin, chosen by a committee of GreenStone FCS representatives.
Blake
DUSTIN BAKER The son of Jim and Lori Baker of St. Louis, Michigan, is studying Animal Science at Michigan State University. BLAKE LAETHEM The son of Mike and Lynn Laethem of Caro, Michigan, is studying AgriBusiness Management at Michigan State University.
Ethan
ETHAN BOSSERD The son of Dave and Pam Bosserd of Marshall, Michigan, is studying AgriBusiness Management at Michigan State University.
Sarah
SARAH CAMPBELL The daughter of Gary and Kelly Campbell of St. Johns, Michigan, is studying AgriBusiness Management at Michigan State University. CLINTON STEKETEE The son of Jim and Karen Steketee of Caledonia, Michigan, is studying Crop and Soil Science at Michigan State University. Clinton
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PARTNERS Fall 2008
KIMBERLY MALVITZ The daughter of Fred and Mary Malvitz of Sturgeon Bay, Wisconsin, is studying Communications at University of Wisconsin–Green Bay.
Kimberly
2008 GreenStone FCS Holiday Card Coloring Contest The time has come to announce the annual Holiday Card Coloring Contest at GreenStone FCS. But don’t be mistaken, 2008’s contest is particularly special as it marks the conclusion of this program. Make sure the children in your family don’t miss out—take advantage of this final opportunity! Similar to previous years, those children 12 and under who are related to a GreenStone FCS customer may enter their artwork for a chance to win a $150, $100, or $50 U.S. Savings Bond. In addition to the $150 U.S. Savings Bond, the first place winners may have their artwork reproduced as the cover on their respective branch’s holiday greeting cards. Entry forms are now available at your local GreenStone FCS branch and are due back by Friday, October 31, 2008. See your local branch for more details or visit www.greenstonefcs.com to get your entry form today.
Fall into a career with GreenStone! If you are a soon-to-be college graduate or you know one, GreenStone is looking for high caliber professionals to join the team. Consider a future with GreenStone FCS in one of the following fields: • Agricultural Lending • Consumer & Rural Residence Lending • Credit Analysis • Appraisal Services • Insurance • Tax / Accounting Services • Corporate Accounting • Marketing • Human Resources • Information Technology
For more information or to view current career opportunities go to www.greenstonefcs.com/about/jobs.aspx
Fall 2008 PARTNERS
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RUNNING STRONG That’s GreenStone!
In an economy that has worked over some financial lenders, GreenStone Farm Credit Services is on track and stronger than ever. We’re committed to maintaining a financially sound organization, while providing the products and services you need. Find out how GreenStone FCS can help you drive into a profitable future.
800-444-FARM• www.greenstonefcs.com
This newsletter is published quarterly for the customers of GreenStone Farm Credit Services. PARTNERS PO Box 22067 Lansing, MI 48909 517-318-2290 jim.nowak@greenstonefcs.com aaron.classens@greenstonefcs.com bill.eva@greenstonefcs.com melissa.rogers@greenstonefcs.com
1760 Abbey Road East Lansing, MI 48823