Promoting the business success of our customers and the rural community
Spring 2011
moving ahead
with a plan & ambition
young now; it’s time “toI’m invest and reinvest... ”
market outlook
Are increases a blessing or a warning? Coalition strives to strengthen voice of AG!
agriculture’s challenge: population growth and the environment
directors’ perspective
impact of technology agdirect– equipment financing easier than ever
Editor’s
Note Spring 2011 Published by:
GreenStone Farm Credit Services
2 Comments from CEO Dave Armstrong CEO Dave Armstrong shares an optimistic spring outlook and makes note of many GreenStone and industry developments.
3 Market Outlook Ag Economist Bob Utterback explains how increases can be a blessing and a warning for producers.
The long, blustery winter has finally passed, and as temperatures warm and the outdoor colors brighten, it’s time to turn our attention to another growing season. There are so many positive things happening in our industry, especially in our agricultural-rich states of Michigan and Wisconsin. And, while this time of year is undoubtedly busy for all of you, we hope you will take a moment to reflect on how fortunate we all are to be involved in such a great industry that helps feed the world with a safe, reliable and affordable source of food. We also hope you’ll take a few minutes to enjoy this issue of Partners, which includes a feature article on a young dairyman from northern Michigan, information on our MI GreenStone PAC, and announcement of our Circle of Excellence Award winners. Happy reading…and as always, your comments and ideas are welcomed.
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8 MI GreenStone PAC Launched New PAC will raise awareness and the voice of our industry.
9 Young, Beginning & Small Farmer Focus Young Farmer Jeremy Werth is making his move and his mark through smart decisions and solid planning.
17 15 Directors’ Perspective Learn how three directors feel today's and tomorrow's technology will drive and shape our industry.
17 Guest Column
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The growing paradox between meeting global demands for food production and maintaining an environmental foothold will no doubt spur changes in technology, production methods and the way agriculture communicates with the public.
Spring Notes 5 News Update 12 AgDirect 13 Candid Comments 14 Agricultural Leaders of Michigan Please note: GreenStone offices will be closed in observance of holidays on the following dates: May -Monday, 30th July -Monday, 4th
This newsletter is published quarterly for the customers of GreenStone Farm Credit Services. Partners, 3515 West Road, East Lansing, MI 48823 • 517-318-2290 • marketing@greenstonefcs.com
Comments From CEO Dave Armstrong
As I write this, spring 2011 is fast approaching and I can hardly wait! Winter’s grip has been extraordinarily tight this year with the Lansing area receiving a record amount of snow in February. Even though March came in like a “lamb”, we natives know it is likely just another one of Mother Nature’s cruel jokes of leading us on only to crush our hopes of warm sunny weather at least another time or two before the winter of 2011 is a distant memory. The past year was another great year for your association because, in general, it was a good year for agriculture across our territory. Dairy and hog prices finally turned the corner and ended the extended period of red ink for both sectors. Cash crop producers once again experienced average to above average yields and excellent prices as the global market rations low grain stocks to an insatiable demand for commodities of nearly all kinds. Timber, greenhouse, and
So what do these strong earnings mean to you, our members? It means that you can continue to be assured of a dependable, competitive, and responsible source of credit delivered through a farmer-owned cooperative and by local staff members who understand your business for years to come. In a time of tremendous volatility and uncertainty in world financial markets, isn’t it nice to know that your lender will be there when you need them? And, of course, let’s not forget that GreenStone just distributed $18.2 million in patronage to its members on our sixth consecutive Patronage Day on March 15. This year’s distribution represents an average return of nearly ½ percent of outstanding principal to our members in 2010. Over the past six years, GreenStone has returned a total of $85 million in cash patronage to its members! When you couple these with the other ancillary services your cooperative provides, including a strong voice for agriculture and thousands of dollars in sponsoring community and industry events, I hope you will agree that GreenStone remains a competitive and relevant force in the Michigan and Wisconsin agricultural industries.
“ Over the past six years, GreenStone has returned a total of $85 million in cash patronage to its members!” nursery producers continue to struggle due to their reliance on the housing industry. Hopefully, economic growth will continue to accelerate over the next year and make a modest dent in the nation’s persistent high unemployment numbers, thus raising consumer confidence and their willingness to start buying homes again. Even with these mixed results across our portfolio, GreenStone experienced record earnings in 2010. These were primarily a result of about $20 million of extraordinary one-time, non-recurring earnings from a Farm Credit System Insurance Fund refund, a gain on the sale of two large acquired properties, and our receiving nearly twice the budgeted patronage from our wholesale bank. These items, coupled with modest portfolio growth of just less than 4% and strong margins, generated $93.5 million in earnings.
You, our members, know even better than I that all of this doesn’t just happen. Our organization’s success is the result of not only responsible and loyal members, but the hard work and dedication to excellence that our staff members provide you each and every day. That’s why GreenStone recently held its 5th Annual Circle of Excellence Awards Banquet (see article on page 7) to recognize our new business development leaders for 2010. This year’s event was held at the Kellogg Center on the campus of Michigan State University and included over 100 staff and their guests. While the banquet officially recognizes our annual “sales leaders” and their individual support teams, they would not be able to do what they do if it were not for their
Continues on page 6...
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MArket outlook
MarketOutlo By Bob Utterback
Let’s face it, American grain and livestock farmers are in very exciting times; they have experienced a rapid increase in almost all commodities since last summer’s lows. Just about any commodity produced on land is now giving major price incentives to producers to increase production. The debate this spring—will enough supply be created to meet current usage or will prices have to move even higher to ration demand? It is difficult to believe usage is not being rationed with $7 corn, $9 wheat and $14 soybeans, but so far it looks like limited impact has been seen on usage. Reduction in cattle and hog breeding herds through the tough 2008 to 2010 time period has left overall herd size very tight. This, plus improving consumer demand due to a stabilizing general economy, has helped lift prices since October. While grains have rallied, cattle and hog producers have been able to make money. Subsequently, we have seen no real reduction in feed utilization. I would, however, suggest caution for hog and cattle producers as we move into the third and fourth quarters. If there is any weather event for corn, we could see another round of herd contraction due to producers’ inability to handle higher feed costs. I suggest all cattle and hog producers be prepared to protect downside risk of livestock prices if grains start to take off after mid-May. Corn, soybean and wheat producers have experienced a sizable price event since last
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Partners Spring 2011
fall. In my opinion, the profit motivations are the strongest for corn and cotton producers and less for soybeans and wheat producers. I believe one has to assume corn acres will grow at least 4 million and soybeans up 1.5 million as we move into spring plantings. I, however, cannot express strongly enough how critical weather will be on the markets this year. Simply put, demand is not being rationed fast enough and we “MUST” have above average yields to keep prices from igniting. I will be watching the charts very carefully for a clue to impending price direction in early April. After the March prospective plantings reports and the bearishness of bigger planted acres, if we start to see the market rally above the winter highs as the crop is being planted, the trade is saying as loud as it can that it needs a bigger weather premium in the market because of concerns about yield reducing weather. This is when it gets really interesting. As we move into July, I suggest that most ethanol plants, industrial end users and livestock feed buyers have limited upside price protection for corn and soybeans. How fast will they start to ration usage? Will it be like the cotton market that exploded and then finally forced end users to shut down due to poor profit? Because of all these conflicting fundamentals the June to August time period could be very violent for both the bullish and bearish sides of the market. This uncertainty causes me to strongly urge all producers to be cautious in their actions. In regard to the selling side of the equation for the expected 2011 crop, I urge producers to have a floor under the market to protect profits and spend some money to protect the upside if the market starts to make new highs after mid-April. Many advisory services are suggesting multiple-year selling; I suggest the following...
“I hope p do not allo positive ta their head... the best cu prices is hig
MArket outlook
ookSpring2011
producers ow all this alk to go to . Remember, ure for high gh prices!”
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Demand growth is for real in regard to China and India. It will be a real challenge we will have to deal with for the next several years. Subsequently, I stress the market must pay producers a premium to take the risk of selling early. I believe producers need at least $350 to $400 per acre above all production costs to justify selling expected 2012 corn. If corn production costs can be kept around $4.25, it suggests at a minimum $6 for December 2012 corn, in my opinion. If soybean production costs are below $9 a bushel, I believe it suggest producers will need November 2012 soybeans in excess of $14.50 to motivate a high level of sales. If the market does give producers the opportunity [during June and July] to sell at high profits for 2012, I believe producers should act. The best course of action, in my opinion, is to use futures where there is flexibility rather than a cash-related product where hands are tied. On a solid fall correction I would then look to start an upside price protection strategy of buying calls to protect against a possible spring of 2012 weather event. We are moving into what many may say is the golden age of profitability for grains and oilseeds. I hope producers do not allow all this positive talk to go to their head and forget about protecting the bottom line. While we are experiencing a historic demand push, eventually domestic and global producers will react to the high profits to create more supply. Remember, the best cure for high prices is high prices! Now is the time to create a market plan so all members of a farm operation are on the same page. Work with your banker so there are no surprises and then be prepared to act with confidence and not fear in implementing a profitable selling plan for now and the future.
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All producers must work on letting consumers and politicians know how good of a deal they are getting for their [food] dollar. One of my biggest concerns is that, if a weather event does occur this year, politicians may react to short-term concerns about rising food costs and change government policy in regard to ethanol and other farm programs. We must tell them that, while it may help short-term, it only hurts the long-term prospects for increased world supply in a world where food demand is expected to increase by a factor of three by 2030. You are not going to get farmers and agribusiness excited about expanding and taking risk if the best they can expect is increased government regulation, increased taxes, and changes in government policy every time prices rise dramatically. We need to tell them as loud and as clear as possible, “Let the free markets work!” ABOUT THE AUTHOR Bob Utterback is the Economist for Farm Journal magazine and President/CEO of Utterback Marketing Services, Inc., located in New Richmond, Indiana. He has over 28 years of experience analyzing ag commodity markets, with special emphasis on the corn and soybean markets. Strategy updates are available by subscribing to Utterback Marketing Services’ email/internet services at www.utterbackmarketing.com or by calling 800.832.1488 (ask for Laura). he opinions stated herein are not necessarily T those of GreenStone FCS.
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News update
NewsUpdate
Spring2011 Farm Credit System Shows Support to USFRA The Farm Credit National Contributions Review Group, on behalf of the entire Farm Credit System, recently approved a $50,000 contribution to the U.S. Farmers and Ranchers Alliance (USFRA). The vision of the USFRA is that food production partners will work together to enhance consumer trust in today’s food production to ensure the abundance of affordable and safe food. Farm Credit’s contribution will go towards helping USFRA develop and implement a communications/ education program to provide consumer influencer organizations and individuals accurate information about today’s agricultural production technologies and methodologies used in growing and raising our food stocks. The Farm Credit National Contributions Review Group is made up of leaders from various Farm Credit System banks and associations throughout the country, who look for opportunities to provide national support to 5
Partners Spring 2011
organizations and causes that advocate for the rights, health, safety and financial well-being of farmers and ranchers, and also have a positive impact on Rural America. For more information about USFRA, visit www. usfraonline.org.
Local Farmer Honored Jake Clark of Grand Ledge, Michigan, was one of three finalists for Top Producer Magazine’s 2011 Top Producer of the Year Award. Clark joined Jim Kline of Hartford City, Indiana and Justin Crownover of Sunray, Texas as the three finalists for the annual honor, with Kline being named this year’s winner. Clark helps farm the land that has been in his family for 175 years. He returned to the farm in 1996, and today he grows corn and soybeans with his father on more than 10,000 acres. He recently revamped the farm’s storage and drying capacity and added a new elevator system. He also built up side businesses, and the farm now includes fertilizer application, custom harvest and planting, and spray application among its farming enterprises. With its Top Producer of the Year awards program,
the magazine recognizes business excellence among the nation’s agricultural producers. Winners are selected because they have demonstrated superior capabilities in agricultural marketing, finance, family business relationships, production or environmental stewardship.
GreenStone FCS Announces Hiring of Regional Vice President GreenStone Farm Credit Services recently announced the hiring of Erin DuBois as its Regional Vice President of Sales and Customer Relations in the Southeast Region. In this Regional Vice President position, DuBois will serve as the leader of GreenStone’s financial services officers, crop insurance agents and financial services staff in GreenStone’s Adrian, Concord, Hillsdale, and Monroe offices. With 19 years of experience in the banking industry, she is fluent in developing sound business and financial decision making strategies related to lending and operations management. DuBois will be responsible for the guidance and development of the sales team. Her leadership experience and financial knowledge will be fundamental as she works to ensure GreenStone customers continue to receive superior service provided by knowledgeable
and dedicated staff. Having served in various roles throughout her financial career, GreenStone is pleased to have her implement her strong sales, management, team building, and analytical business skills in this position. DuBois holds a Bachelor of Science degree with a concentration in Business Administration from Hillsdale College. She resides in Jackson, Michigan, where she serves as an honorary board member for Family Service and Children’s Aid and teaches Sunday School at First United Methodist Church. Outside of work she enjoys spending time with her family, boating and camping.
News update
GreenStone Scholarship Opportunities GreenStone Farm Credit Services is proud to offer six $2,000 scholarships to graduating high-school students who are pursuing their agricultural interests at the collegiate level. GreenStone’s scholarship program aims to assist deserving students with continuing their education in order to prepare for a career in production agriculture or agribusiness. University of Wisconsin One scholarship will be awarded to an incoming University of Wisconsin freshman that has selected a major preference in the College of Agriculture and Life Sciences. Applicants must meet specified criteria and submit a completed application form to GreenStone FCS by June 1. Michigan State University Five scholarships will be awarded to deserving incoming freshman that have applied to Michigan State University and have selected a major preference in the College of Agriculture and Natural Resources. Michigan State University will automatically send applications to eligible students. Completed applications are due to MSU by April 15. For additional scholarship information, eligibility requirements, or to print out a University of Wisconsin application please visit greenstonefcs. com/scholarships.
...CEO Comments continued other teammates in areas like Information Technology, Legal/Loan Processing, Human Resources, Credit, and Finance and Accounting. We are blessed to have a great team spirit at GreenStone and enjoy celebrating each other’s success. Please join me in congratulating this year’s Circle of Excellence winners!! I also encourage you to read the article in this issue outlining a new group made up of Michigan agricultural organizations called Agricultural Leaders of Michigan (ALM). This group, which includes GreenStone, Michigan Allied Poultry Association, Michigan Potato Growers Association, Michigan Milk Producers Association, the Michigan Agri-Business Association, and the Michigan Pork Producers Association was created to provide various Michigan agricultural organizations a collective voice not only on issues facing the industry, but as a way to educate the public about what we do in our industry and why we do it. The group has entered into an agreement with the firm of Byrum & Fisk to provide it with communication and advocacy support throughout 2011. By working together, the members of the group believe their collective voice and resources can be leveraged more effectively in carrying out its mission of “proactively promoting and influencing state and federal business policy while enhancing the image of Michigan’s agricultural industry to maximize the economic opportunities agriculture presents for diversifying and contributing to the renewal of a vibrant Michigan economy.” It’s an exciting time in our industry and we look forward to working with not only ALM, but all of our industry partners as agriculture faces a never ending set of future challenges. So how will March, or for that matter 2011, go out? Like a lion or a lamb? While most of the commodities in GreenStone’s portfolio experienced a relatively profitable year in 2010 compared to 2009, we remain concerned about the impact high feed and input prices may have on the sustained profitability of our protein and dairy portfolio through the rest of this year and into 2012. For the most part, many of our dairy, hog, poultry, and cattle feeders grow some, if not all, of their corn, which should help offset the impact of high open market prices. Yet, for those who buy all of their feedstock, 2011 may prove to be more like 2009! In fact, we are also concerned what today’s high grain prices may mean for the future profitability of cash crop operations as well. Remember the old adage, “High prices cure high prices”? Oh, and the other one, “What goes up must come down”? And finally, here are a couple more questions to ponder: Will our economy grow enough in 2011 to make any meaningful impact on persistently high unemployment numbers? Where will interest rates and fuel prices be a year from now and what will the impact of all this be on producer profitability let alone land values? And probably the biggest unknown, will Washington make any meaningful progress on our rate of federal spending? I guess we will just need to wait and see. But, in the meantime, it might not be a bad idea to be prepared for what you will do if it’s a lion you encounter over the weeks and months to come instead of a lamb! As always, thank you for your business. Feel free to contact me at 517-318-4105 or dave.armstrong@greenstonefcs.com if I can ever be of assistance.
Dave Armstrong
Spring 2011
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News update
GreenStone Recognizes Top Sales Staff The Circle of Excellence Program is a way to recognize and reward those lending and financial services staff members who are the top performers within the Association. Various criteria including loan and revenue growth and number of new customers are used to measure performance. For the 2010 sales year, Platinum Awards were presented to the top 10 percent of GreenStone’s entire lending staff. While Gold Awards were given to the next 10 percent of lending staff, as well as the top 20 percent of Financial Services specialists. Two Regional Vice Presidents were also recognized for their performance during 2010, first place receiving a Platinum Award, and second place a Gold Award. Each of the winners, along with the support staff for all Platinum Award recipients, were recognized at the 5th Annual GreenStone FCS Circle of Excellence Awards Banquet on February 25 in East Lansing, Michigan. The GreenStone FCS staff members to the right represent the 2010 Circle of Excellence Platinum and Gold Award winners. Congratulations to all of the winners of the 2010 Circle of Excellence Awards!
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Platinum Award Winners Traditional FSOs Ian McGonigal, Grand Rapids, MI David Ballman, Lapeer, MI Duane Paturalski, Berrien Springs, MI Gordon Tulgestke, Traverse City, MI Brian Polega, Bad Axe, MI Wayne Sevilla, Bay City, MI
Gold Award Winners Traditional FSOs Tyson Lemon, Berrien Springs, MI David Meyering, Cadillac, MI Dave Messing, Sandusky, MI Kevin Bock, Bay City, MI Peter Hirschman, St. Johns, MI Jim Byars, Mason, MI AgriConsumer FSOs Mark Buuck, Monroe, MI Scott Sharda, Grand Rapids, MI Abby Dassance, Corunna, MI
AgriConsumer FSOs Amanda Kroll, Appleton, WI Cynthia Cole, Ionia, MI Sandra Arnold, Lapeer, MI Commercial FSO Jeff Sommerfield, Caro, MI Regions Carl Treml, Northeast Wisconsin, East Region. Appraisers Keith Aeder, Caro, MI Dennis Makula, Adrian, MI Crop Insurance Specialists Jason Clancy, Caro, MI Matt Evers, Allegan, MI Jessica Godley, East Lansing, MI Life Insurance Staff Sherry Lange, De Pere, WI Kathy Thiel, Ionia, MI Regions Randy Stec, Michigan, East Region
Commercial FSO Gayle Olson, Appleton, WI Tax and Accounting Staff Kelly Tobin, East Lansing, MI Cindy Temple, Bay City, MI Ralph Wesoloski, Coleman, WI Also, two additional awards were presented during the Awards Banquet. They were:
Rookie of the Year Award Wayne Sevilla, Bay City, MI
Most Improved Award Jeff Sommerfield, Caro, MI
Agricultural leaders
MI GreenStone PAC Help Us Help You Judging from the feedback at our recent membership advisory meetings, you want even more action from the GreenStone staff on the legislative and regulatory issues which affect our industry. When you speak, we listen. As you know, government action affects our bottom line—and yours. A prime example is our successful effort last year to pass the Farm Loan Parity Bill. The original version of the Michigan Business Tax (MBT) did not include a Farm Credit association in the definition of a financial institution. This meant that GreenStone Farm Credit Services’ state tax liability would have increased by over 100 percent, or more than $430,000 annually. In 2009 we sought a proposed legislative fix to include a Farm Credit institution, such as GreenStone FCS, in the MBT definition of a financial institution. Our bill quickly passed the House, but it stalled in the Senate for nearly a year. At that point, we enlisted the added assistance of a new lobbying firm,
Kelley Cawthorne, to assist us with a new strategy. This strategy involved sharper messaging, direct grassroot contacts by our members to key legislators, and more targeted political action or fundraising, ultimately creating more regular and consistent delivery of our messages.
bad public policy can drive up our operating costs—and yours—just when we can least afford it. That’s why the GreenStone team is out there fighting for you on issues like taxes, regulatory reform, and the upcoming re-authorization of the Federal Farm Bill.
Our strategy worked. In short order, we secured the passage of the Farm Loan Parity Bill which became Public Act 156 of 2010. This amendment saved us more than $430,000 annually in state taxation and allowed us to increase our patronage return to members accordingly. Even more important, our efforts helped establish GreenStone FCS as a major player on state agricultural issues.
Please help us win these legislative and political battles on your behalf. Become a member of the mi greenStone PAC. The MI GreenStone PAC helps give us access to key decision-makers in Lansing so we can tell our story before someone else tells it for us.
In our effort to continue this strategy of consistent messaging and grassroot connectivity, we recently formed the MI GreenStone PAC as a State of Michigan Political Action Committee (PAC). We would like you to make a voluntary contribution to the MI GreenStone PAC and help us continue to help you in Lansing and beyond. As previously mentioned,
MI GreenStone PAC is bi-partisan. We are not out to advance the interests of one party over the other. Your contribution advances only the legislative and regulatory interests of our industry. Together we can build on earlier success in passing the Farm Loan Parity Bill and enhance the ag economy in our territory.
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Young Beginning & small farmer feature
By Jennifer Vincent
Innovation means progress, new visions and ideas—moving forward. Forward progress is essential in life and business. If you aren’t moving, you’re simply steady—at best—and that’s not good enough for Jeremy Werth and his wife, Summer. Since Jeremy was just a young lad, he has maintained a steady forward march and shows no sign of being simply content. In June of 2010, at the age of 29, Jeremy bought a 200-acre farm with 135 tillable acres in Alpena about 10 miles from his home. “I’m young now; it’s time to invest and reinvest,” he says. “When I’m old, that’s when it’ll be time to slow down a little.” Jeremy’s newest purchase is another building block in creating a sustainable and profitable business 9
Partners Spring 2011
for his family and future generations —a concept he learned well from his father, Larry. Twenty-two years ago Larry started milking six jersey cows on a small farm. In 1999 an opportunity to purchase a 200-acre farm from Larry’s uncle became available. The herd was increased to 100 cows and moved to the new location in 2001. In 2002 Jeremy graduated from Alpena Community College with a business degree and was committed to the farm full time. Larry and Jeremy formed a joint operating agreement and Jeremy purchased springing heifers from another farm to bring his herd ownership up to 22 percent. In more recent years Jeremy has began to acquire cattle in the herd, as well. “We will likely form an LLC in the near future, as dad begins to
transition out of the farm,” Jeremy says. In 2004, Jeremy bought Larry’s original 40-acre farm and home and five years later renovated the barns and bought surplus heifers off the existing farm to raise and sell as springing heifers. “Of the 40 acres, only about 10 acres is tillable, so to grow my heifer business, I needed to obtain more land. Rental ground is hard to come by in this area, but when I heard one of the older farmers in the community was looking to retire and had no children, I went to talk to him,” Jeremy explains. Indeed, Lindy Torsch was looking to sell, but he wanted to see the farm continue as a farm—exactly what Jeremy had in mind. The package included 200 acres, several pieces of equipment, seven buildings and a mobile home.
“I checked with Farm Service Agency through USDA and I qualified for a participation loan,” Jeremy says. “But I needed another lender for the other half. We had done business with GreenStone Farm Credit Services before and were very satisfied.” Jeremy pulled from his business management degree and his on-farm experience and knowledge to develop a comprehensive plan. He worked with Pat Bordeau, GreenStone FCS financial services officer, to plug in the numbers. “Jeremy really took the time and effort to develop a good proposal. He really knew what he wanted to do and had a plan. He wasn’t jumping in blind,” says Bordeau, who recommended the loan. GreenStone FCS not only approved the other half of the FSA guaranteed loan, it approved the entire loan for
two months while the FSA loan was waiting to be processed.
raising and selling at auction. He has done very well with it.”
“When Jeremy approached me, I already knew his father and his thorough style of management. We look at character as part of the qualification and his father is one of the strongest borrowers I have. He’s very diligent and on top of issues; Jeremy shares those qualities. When l looked at Jeremy’s credentials, we analyzed what he had, what he was
Jeremy’s goal is to continue to diversify the farm; and while his original intent was to expand his heifer business, he has since decided to focus on raising high quality dairy hay. “I’ll continue to raise about 40 heifers, but there is good local demand for highly digestible, quality forages.”
“ Jeremy really took the time and effort to develop a good proposal. He really knew what he wanted to do and had a plan. He wasn’t jumping in blind.”
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Young Beginning & small farmer feature
Equipment financing just got simple, fast and flexible!
Jeremy currently rents out a heifer barn and the mobile home on the new farm, but that may change as “change” seems to be fairly constant for the Werths. In total, the Werths are milking 250 cows and farming about 1,000 acres raising alfalfa, corn and soybeans in a minimal till system.
AgDirect® offers the best equipment financing option in the business—quick credit decisions, flexible terms and highly competitive rates. An equipment financing program offered by GreenStone Farm Credit Services, AgDirect is only available through your ag equipment dealer. When you’re in the market to buy, lease or refinance equipment, ask for AgDirect financing. • Purchase, lease or refinance • Variable or fixed rates • Financing terms from 2-7 years* • No manufacturer rebate/financing restrictions • Delayed payments - up to a year* • Easy application & quick turnaround 888-525-9805 / www.greenstonefcs.com * Subject to approval. Some restrictions may apply. Rates and terms may change at any time.
While Jeremy Werth has many accomplishments in his 29 years, he says he’s most proud of his family and the life that farming provides. His daughter, Kiera, 5, often helps out with the calves. (Photo courtesy of: Mindy Pratt, MMPA)
“The steady growth on the (dairy) farm was done to see us kids carry it on. It inspired me to stay with farming. I love it and it’s a great way to raise a family.” Their efforts have not gone unnoticed. Jeremy and Summer Werth were named 2009 Outstanding Young Dairy Cooperators by Michigan Milk Producers Association. “Jeremy has the right business sense, with his dad’s guidance, to venture out on his own and it’s really working out for him,” Bordeau says.
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Partners Spring 2011
AGDirect
Equipment Financing Now Easier Than Ever One year ago, GreenStone FCS pioneered an initiative to enhance its options for point-of-sale machinery and equipment financing at dealerships all across its two states. AgDirect® was introduced, making Simple, Fast, Flexible Financing options for both new and used agricultural equipment available at dealerships throughout all of Michigan and Wisconsin.
Simple, Fast, Flexible Financing “AgDirect is a very simple, fast process. It is the easiest online financial tool I use.”
By partnering and working with other FCS associations across the Midwest, GreenStone gained access to better technology and a more efficient process that ultimately allows you, the customer, to enjoy lower interest rates. AgDirect now delivers competitive and convenient financing options for more than 200 machinery and equipment dealers, representing over 240 store locations across all of Michigan and Wisconsin. The AgDirect initiative provides a unified image of the Farm Credit System.
– Steve Wells, Owner/President of Well’s Equipment Sales, Inc.
GreenStone has been more than satisfied with the program results. The increase in new dealer-originated business has allowed GreenStone to be more successful in 2010, but more importantly, dealers and customers alike seem pleased with AgDirect’s financing options, services and the process by which financing gets done.
Knowledgeable Staff “AgDirect is locally represented by knowledgeable, courteous staff. Good southern Michigan representation along with helpful inside sales staff in Omaha (headquarters).”
– Mark Mahoney, Sales Manager at Purdy Tractor & Equipment, Inc.
– S teve Wells, Owner/President of Well’s Equipment Sales, Inc.
Competitive Rates “AgDirect rates are very competitive. Good rates keep the customer from shopping.”
GreenStone’s participation in the AgDirect program has helped provide Simple, Fast, Flexible Financing options for new and used agricultural equipment at dealerships throughout Michigan and Wisconsin.
Customer Satisfaction “Our customers like the very competitive rates and the fact that it is simple. I’ve always believed that if we get our customer the best rate that they are more likely to come back to buy and have more ability to buy.” – Dan Hupp, Owner/President of Dan’s Farm Supply, Inc.
The next time you are shopping for equipment, be sure to ask your dealer about Simple, Fast, Flexible Financing available through AgDirect.
“AgDirect is a very simple, fast process. It is the easiest online financial tool I use.”
One of GreenStone’s former financial services officers, Scott Welden, now serves as the AgDirect Territory Manager for Greater Michigan. Scott recently took the opportunity to speak with some Michigan dealerships regarding AgDirect. Their comments touched on some of the key reasons GreenStone has decided to continue with AgDirect.
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News Update
Michigan Ag Council The Michigan Ag Council (MAC) is a coalition of several commodity organizations united to help connect farmers and consumers through education and communication campaigns. Thanks to support from the Corn Marketing Program of Michigan, Michigan Farm Bureau, GreenStone Farm Credit Services, Michigan Pork Producers Association, Michigan Milk Producers Association, and the Michigan Soybean Promotion Committee, the MAC has some exciting projects in the making. To find out more about how they’re working to keep consumers connected with Michigan farmers visit www.miagcouncil.org.
Candid Comments... Dear GreenStone Farm Credit Services – After years of waiting, our dream hunting land came up for sale. After negotiating a good deal with the owners we headed to our bank for the financing. We were told that the bank’s policy on financing bare land meant that we couldn’t get a 30-year fixed rate without using our home as collateral, so we took a balloon loan at 7% interest. We had the down payment for the hunting land, had never missed a payment in over 35 years and had an A+ credit rating. We took the balloon loan and made the payments for three years but we were always uneasy with what the interest rate might do. The more we talked with people, hunters, farmers, and friends, the more we kept hearing the name GreenStone recommended, so we took our paperwork to GreenStone’s Caro office and met Les Karr. Les made us feel like we were sitting around a camp fire with an old friend. He answered all of our questions, checked our documents over and immediately started the process of transferring our balloon loan to GreenStone. In short order we were the proud owners of a 30-year, fixed rate 5% interest rate loan. We had a lower payment and our interest rate went down. I seldom sit down and write an “atta boy” letter but Les Karr and Randy Stec deserve the time and effort for me to say thank you. –Bob & Darlene Walker, Kingston, MI
2011 Customer
Customer Appreciation Events and Trade Shows
Customer Appreciation Events
UpComing Trade Shows
Grand Rapids and Hart: June 17, West Michigan Whitecaps Game at Fifth Third Ballpark
Ag Expo: July 19-21
Lapeer: June 21, Pancake Breakfast on the Brendel Farm St. Johns: June 24, Lansing Lugnuts Game at Cooley Law School Stadium Corunna: July 8, Lansing Lugnuts Game at Cooley Law School Stadium Ionia: July 24, Ionia Free Fair Schoolcraft: August 18, Annual Picnic at Nottawa Fruit Farm
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Partners Spring 2011
Lake States Logging Congress: September 8–10 Great Lakes Fruit and Vegetable Expo: December 6-8
Ag Leaders of michigan
countries, uncertainty over fuel supplies and costs, and so on.
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GreenStone Part of Coalition Striving to Strengthen Voice of Ag GreenStone Farm Credit Services recently joined forces with other groups in Michigan’s agriculture sector to form Agricultural Leaders of Michigan. This new coalition of agricultural, commodity and agri-business leaders is committed to bolstering the profile of our industry and educating policymakers about core issues affecting Michigan agriculture and agri-businesses.
Mission Statement
We want you to know that GreenStone, working with the ALM, strongly believes our industry in particular and Michigan agriculture as a whole have powerful stories to tell. ALM wants to tell those stories at every opportunity. To policymakers. To opinion leaders. To the news media. To the general public. To date, ALM is made up of the following groups: GreenStone Farm Credit Services; Michigan Milk Producers Association; Michigan Allied Poultry Industries Inc.; Potato
The purpose of Agricultural Leaders of Michigan is to proactively promote and influence state and federal business policies while enhancing the image and economic well-being of Michigan’s agricultural industry to maximize the economic opportunities agriculture presents for diversifying and contributing to the renewal of a vibrant Michigan economy.
Growers of Michigan; the Michigan Agri-Business Association; and the Michigan Pork Producers Association. We are reaching out to more groups so we can grow our coalition and strengthen our voice for the future of Michigan agriculture. As you know, those of us in agriculture do a great job, from producing goods to increasing yields to processing food to creating jobs to increasing efficiencies. We are on the frontlines of so many important things that are going on in our state, nation and world today. We are providing the food, fuel and fibers that are in high demand around the world, at a time when supplies are being called into question. You see it and read about it in the news virtually every day: Increasing food prices, anxiety over commodities, shortages in other parts of the world, exploding demand in faraway
You are all doing important work—and ALM wants to help us begin to tell our positive stories to policymakers in Lansing and Washington. As they develop agriculture policies that impact you, they must also hear form us. ALM and the members we serve in agriculture are ready to communicate to our government that agriculture is part of the solution to many of the challenges that our state and nation face. ALM believes that a core set of issues will be important to Michigan agriculture in coming years. While individual events and policies may arise, we believe in viewing them with the following priorities to help focus our efforts: • Trade • Infrastructure • Business activities •P rotecting the Great Lakes, land and air • Disease management • Farm Bill 2012 update ALM strongly believes that the broad scope and reach of these issues can benefit ALL segments of Michigan’s agricultural industry and beyond. If you have any questions, thoughts or ideas about ALM, please contact GreenStone President/CEO Dave Armstrong at dave. armstrong@greenstonefcs. com.
Spring 2011
Partners 14
DIRECTORS’ PERSPECTIVE
Technology... Directors’ Perspective:
How do you identify with it in today’s age? Computers, internet sites, cell phones, publications—each year we see the face of these resources advance and technology change. We asked three board directors to share their “go to” for information in several advancing categories. Then we asked them to look into the crystal ball and share how their list of key resources might change during the next five years.
Gene College Internet: “Information” is everywhere, but I obtain the majority of my information via the internet through sources such as the Bloomberg, Raymond James and PIMCO sites. Bloomberg and Raymond James focus on matters impacting capital markets, but Bloomberg's current updates on agriculture commodities are also helpful. Bill Gross, founder of PIMCO, has a long history of great success in bond investments. Since GreenStone obtains its money to lend customers from the bond market, his insights are meaningful to me.
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I would be remiss if I didn't mention Facebook…how else would I know all of the escapades that my grandkids are involved in! Person: I stay current with comments made by Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, but also those of Thomas Hoenig, President of the Federal Reserve Bank of Kansas City. Mr. Hoenig is often a dissenter on decisions made by the Federal Reserve board and provides a balancing viewpoint. Publication: I have an online subscription to the Wall Street Journal where I visit the World, U.S., Business and Markets sections of the site. It's an excellent way to stay very
current on issues impacting the world, our country and the economy. Future: There will be less emphasis on hard copy material. The only written publication that I will voluntarily receive will likely be the local newspaper. There will also be an increasing supply of sources of information, so it will be a matter of finding those that I believe best fit my personal needs—everyone is different.
Scott Roggenbuck Internet: The internet is certainly a valuable tool. The information at your fingertips seems limitless. I have several websites saved in my favorites, pioneer.com, michigansugar.com, and greenstonefcs.com are just a few.
I even started to text. Yes, text. I, who ridiculed the young people for this, found out that I could text my fertilizer guy instead of calling and talking to him for five minutes in order to find out what could have been answered in seconds. I also have the ability to send out one mass message to my seed customers. When used properly, texting is a great time management tool.
Person: I have a host of people that I rely on for information for any given situation. I lean on these people because of the knowledge and experience they have gained through years of service in their fields. You can get information quickly from a computer. But experience? That’s a personal asset.
Publication: I read the local newspaper for local news and the obituaries and get all the farm magazines, of which my favorite is the Progressive Farmer. Online, I like the Wall Street Journal for a broader news source.
Cell Phone: I have a smart phone and a memo pad. Together, they allow me to keep notes in organized files, get up to the minute access to world news anytime of the day, access radar and the weather, and get my e-mail anywhere.
Bill Stutzman Internet: I find myself turning more and more to my computer. I don't have to go looking through a large pile of publications in search of an article I remember reading the other day in order to get the information I’m looking for. It's a real time saver. The site I use the most on a daily basis is cmegroup.com. It provides the commodity futures markets from present day to four years out. That kind of information is extremely helpful when making plans for the future. Person: I consult most often with my fertilizer supplier and seed dealer. He is always up to date and knowledgeable about the newest product information and pricing.
Newspapers fight the battle of time. I, personally, still like to relax with the paper in my hands, just as I like to sit down with a good book instead of a Kindle. But, remember I didn’t used to text, either. In the end, I cannot imagine a time when I will not feel the need to call upon trusted friends and allies for advice. Every day is an opportunity to learn; most of what I have learned is from listening to people I trust.
Future: I see the smart phone technology continuing to advance and be widely adopted. The Blackberry, once synonymous with corporate executives, is now just as likely to be seen coming out of the shirt pocket of a farmer at the local coffee shop.
Cell Phone: Who would have believed five years ago that you would be checking and responding to your e-mail and accessing the web on your iPhone when you are away from your office? Information is changing so fast these days; you just have to find new ways to keep up. If you don't, you will find yourself “out of business”. It's just the way we do business today, and it saves a lot of time and fuel, not to mention wear and tear on the pickup! Publication: I would say that my favorite publication would have to be Field and Stream, because you have to keep a little “balance” in your life. After all, when a tough day on the farm comes to an end, doesn't everyone deserve to fall asleep reading and dreaming a little?! Future: As technology advances in the future, I see my use of the web increasing and the other resources that I had been using slowly
decreasing. Some things will always be with us, but in much diminished use. I also think that we will not cease using our desktop computers entirely, but we will put “feet” to that web access and do more and more in the mobile world with portable devices. Everyday we are demanding more at a faster speed. There really is no “status-quo”; you are either going forward or you're going backward! Which way would you rather go?
Spring 2011
Partners 16
Guest column
Agriculture’s Challeng Continued Growth and Environmental Management Should you be at
Big Man Camp or
Point Guard School?
By Alan Hahn The Dragun Corporation Modern agriculture is a great success story. In the 1960s and 1970s, there were predictions of widespread famine and food shortages by those concerned with growth in human population. However, food production has more than kept pace with demand. According to the American Farm Bureau, one farmer in 1940 fed approximately 19 people. Today, one farmer feeds 155 people. Additionally, according to Center for Strategic and International Studies, “Since 1960, the world’s population has more than doubled, from 3.1 billion to 6.7 billion, and real per capita income has nearly tripled. Over the same period, total production of cereals grew faster than population, from 877 million metric tons in 1961 to more than 2.3 billion metric tons in 2007…” However, this increased productivity has not come without change and controversy. Looking at the fundamental issue as it relates to livestock agriculture, increased inputs
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ge:
guest column
has lead to increased output; for livestock, this output comes in the form of manure. The handling of the output, or manure, is the crux of the environmental debate at Concentrated Animal Feeding Operations. Many farmers view manure as a resource and have traditional methods to handle the resource. Environmental activists have another view; they would like to see a more “regulated” approach under the Environmental Protection Agency. Communication between the two groups on how best to address this issue has been strained and in some cases, very strained. Zinn and Blodgett (1994) summed up the perception issue well when they referred to two divergent viewpoints regarding the need for more environmental policy for agriculture, there are “…environmentalists, who focus on problems that they believe need to be solved, and agriculturalists, who worry how solutions to the problems will affect the business of agriculture.” The environmentalists are focused on what they believe to be the “solutions” to the environmental issues; farmers, on the other hand, are concerned about how these “solutions” may impact their business. On one hand, livestock farmers feel they are good stewards of the environment; after all, why would you destroy the very land that provides you with a living? On the other hand, environmental groups insist that farmers are given special treatment and pollute soil, groundwater, surface water, and air, and that they should be regulated like any other industry with a discharge. But why has this chasm developed between farmers and the community? Certainly, a farm by nature has a lot of manure, feed, and animals that generate odors and create a working
environment that is not familiar to a majority of the public. This was not true two or three generations ago when we were by-in-large an agrarian society. Today, less than 1 percent of the population claim farming as an occupation. Two changing dynamics, fewer people exposed to farming life and farming practices changing dramatically, underscore the communication gap. What’s more, farming cannot afford to stand still. The demand for food is expected to double by 2050. By at least one estimate, doubling agricultural output to meet global demand by 2050 will require an annual average growth of almost 2 percent. So where does this leave us? For those in Michigan, the Michigan Agriculture Environmental Assurance Program is a model of where many of these elements (productivity with the integration of environmental management and communication), come together in one program. However, farmers will still have to understand how federal environmental regulations apply to them and to make sure that if they do apply, they are in compliance. Bottom line is, the challenges facing farmers are not minor, but they can be overcome. ABOUT THE AUTHOR The Dragun Corporation is an environmental consulting and engineering firm. They assist farmers and others who are regulated with environmental compliance and planning issues, including preparation of SPCC plans. For more information, visit www.dragun.com, or call 248-932-0228. The opinions stated herein are not necessarily those of GreenStone FCS.
Spring 2011
Partners 18
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800-444-FARM
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