Partners - Summer 2007 by GreenStone Farm Credit Services

Summer 2007

Editor’s Note

Editor’s Note Summer has arrived…that period of time that for most of us is so highly anticipated, yet seems to come and go in an instant. We sincerely hope you and your family are enjoying the many wonderful things associated with this time of year…warm temperatures, longer hours of daylight, weekend barbeques and outdoor activities. At the same time, we encourage you to take a few moments to read our latest issue of Partners Magazine – including, among other things, a column on renewable energy, information on two GreenStone office moves, and a feature article on a unique dairy operation doing its own processing and marketing. Happy reading…and as always, your comments and ideas are welcomed. Published by

CONTENTS

SUMMER2007

YOUNG, BEGINNING, AND SMALL FARMER FOCUS 9| Next generation finds niche in dairy market When Wendell and Ruth Van Gunst’s daughters left the dairy farm to attend Dordt College in Iowa, they had no idea they’d find young men who would one day take over their farm.

IN EVERY ISSUE 2|

CEO Comments

Market Outlook

Director’s Corner

11|

News Update

COLUMNS 4|

The roadblocks to smooth business transition By David Kohl

Farms and renewable energy generation By Troy M. Cumings

CEO Comments

CEO Comments by Jim Schiller he agricultural production year is well under way for 2007. Generally throughout GreenStone’s territory crops were planted timely with warm weather and adequate moisture for germination. Now we need continued warm weather and gentle rains. As we all know, it is a long way from now until completion of harvest. The preliminary all-farm products index of prices received by farmers in May was up 3 percent from April, showing prices for crops up 2.1 percent and livestock prices up 3.9 percent. On the negative side the prices paid index was up 0.6 percent from April and 6 percent more than May of last year. Generally things look good for a positive and profitable year for the agricultural industry. Of course, we know that volatility in the agricultural industry is a given, and we all must manage in a manner to mitigate risks as much as possible. Use of crop insurance and a well-thought-out marketing plan with price protection are key parts of that risk management strategy. Key to their use is quality of records and information systems so that cost of production is known and financial targets are accurate to insure profitability. GreenStone provides crop insurance, accounting services, and farm records through specialized, knowledgeable staff to assist in the process. If you are not using those services, please give your local branch office a call to see how they can benefit your operation.

Interest Rates Interest rates are maintaining a flat yield curve. Rates with 30year terms are equal to rates for 90-day maturity. Normally, you would expect rates to increase as the term increases from 90 days to 30 years with a normal spread of 21/2 to 3 percent. What does that mean for our rates going forward? The Federal Reserve, through the discount rate set for member banks, influences short-term rates while the marketplace determines intermediate and long-term rates. With national economic activity slowing, it would appear that short rates are too high. One could expect the Fed to then reduce rates and again stimulate more economic activity. However, the Fed has been reluctant to lower rates because some parts of the economy are strong and the fear of inflation is high. My predictions would support a continued flat yield curve, and a holding of rates by the Fed due to inflationary pressures for at least the next three to four months. If inflation fear subsides, then short rates would likely be reduced and intermediate and long rates increase slightly forming an upward sloping yield curve by the end of the first quarter 2008. It is not likely that we will be saddled with significantly increasing rates for the remainder of 2007 and into the first part of 2008.

Elections Congratulations to Scott Roggenbuck who was elected as the new board member representing Region II (the Thumb area). He replaces Dave Thuemmel who retired from the board after 28+ years of service. Please review the article later in this issue giving tribute to David for his years of service and many contributions to GreenStone’s success. Also congratulations to incumbents who were re-elected: from Region II, David McConnachie, and from Region I, Lynn Gould and Gilbert Ritter.

Customer Satisfaction I am pleased to announce that our customer satisfaction survey results are in and our customers/members gave us a 95 percent rating of satisfied or highly satisfied with our service. Congratulations and a thank you to our staff as it is their efforts that keep us focused on our number one priority–our customers and membership and bringing added value to their businesses and personal lives. A 95 percent satisfaction rating is world class, and we pledge our continued efforts to maintain the level of service you have come to expect.

Wisconsin Facilities Update Recent activity in Wisconsin has upgraded our facilities and provided more convenient access to our offices for our customers. We have opened a fully staffed office in Appleton that includes senior financial services officer, Gayle Olson; credit officer, Bob Panzer; agriconsumer financial services officer, Meryl Anderson; and customer services representatives, Sandra Fritsch, Tammy Lamers, and Karen Spaeth. We have recently opened a full-time office in Manitowoc at 2005B Dufek Drive. Working from that location are financial services officers, Laurie Schetter and Michelle Backhaus; and customer services representatives, Nancy Boushka and Beth Gallas. We have recently moved to new facilities in Escanaba, a more convenient location for our customers. The new address is 1801 N. Lincoln Road. Staff at that office includes lead financial services officer, Ann Harrington; senior tax accountant, Steven Zimmerman; tax accountant, Kristine Thibeault; accountant, Cynthia Trudeau, and customer service representative, Karen Ansell. The Sturgeon Bay office is being remodeled to provide additional space at our current location, 3030 Park Drive. Staff members at the office are Antonia Sorenson, financial services officer; Barbara Martell, senior tax consultant; and Paula Sullivan, accountant. We believe enhanced facilities provide added service and convenience to our customers. We are pleased to have made these commitments for our Northeast Wisconsin Region including the Upper Peninsula of Michigan.

Summary GreenStone, your financial services cooperative, continues to perform well with a significant growth rate in our loan volume. We pledge our continuous efforts to remain your most competitive source of lending and quality financial services. We appreciate your business; and as always, we welcome your comments and questions. Best wishes for a safe and happy summer season.

Summer 2007 PARTNERS

Market Outlook

Market Outlook Summer 2007

July corn futures to trade close to its 50-day moving average, currently $3.75, until given a reason to break one way or another. At this writing, 2007 December corn futures are trading over $3.90. December of 2008, 2009 and 2010 are all trading over $4.00 per bushel. Never in my career have I seen values this good. Corn producers should take advantage of this market by making multi-year sales. Caution, however, must be exercised in making multi-year cash sales; i.e., direct sales to grain elevators. There is lots of counter-party risk when making sales to grain companies many years in advance…be sure you talk to the company you are selling to and get a firm understanding of the ramifications of selling many years

“DECEMBER CORN FUTURES ARE TRADING OVER $3.90. DECEMBER OF 2008, 2009 AND 2010 ARE ALL TRADING OVER $4.00 PER BUSHEL. NEVER IN MY CAREER HAVE I SEEN VALUES THIS GOOD.”

By Ken Lake

he focus of the corn trade for the past several weeks–and for several weeks to come–is and will be corn plantings and corn’s eventual yield. Currently, both USDA and various private analyses consider final planted corn acres to be somewhere north of 90 million acres, and final yield to be over 150 bushels per acre–yielding a production number of 12.4 billion bushels and an eventual carryout of around a billion bushels. A carryout number of a billion bushels in this demand driven market is comfortably snug, to say the least, and with ethanol demand on the rise one would expect corn values to remain firm through the pollination period. Expect

PARTNERS Summer 2007

production in advance. Also read and understand the contract terms, and always deal with reputable firms. Soybean seedings this spring have plummeted to about 67 million acres and we now expect the 2007 production to be a rather small 2.745 billion bushels, leaving a tight carryout of 320 million bushels. Values have risen to over $8.00 and look to remain there until we see the crop through pollination and get a sense of the number of acres the South Americans will plant. As with corn, deferred values have risen to well over $8.50 for 2007, 2008 and 2009 and multi-year sales should be considered.

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. He writes a regular market update, “MAC Marketline,” which is available to GreenStone FCS customers through GreenStone’s marketing alliance with Michigan Agricultural Commodities Inc. MAC Marketline can be found at www.greenstonefcs.com. The opinions stated herein are not necessarily those of GreenStone FCS.

Farm Management

by Dr. David Kohl

THE ROADBLOCKS TO SMOOTH BUSINESS TRANSITION From where I see it, the top five roadblocks in family business transition and how to deal with them are: 1. Fair and Equal Mom, Dad, Grandma, and Grandpa want to treat all family members equally. Point blank, you can’t. You can treat them fairly and equitably. In today’s world of rising land values in farm and rural real estate that have nothing to do with agricultural return, the dollar signs start dancing around in everyone’s minds. Remember, sweat equity built up by the child or partner who is carrying on the business must be rewarded.

5. Communications In succession planning we “talk the talk” but some never “walk the talk”. Discussion, planning, and execution of the plan, with communication along the way, are critical for this work in progress.

Culture can also be a sticking point. In the family business, cultural traps most often occur in the following areas: • What is the major stakeholder’s philosophy on debt, investment, and risk management? Older members tend to be conservative while younger people seek financial leverage and growth, and are willing to take more risk. • What is the culture concerning management philosophy and work ethic? Here, older members sometimes “live to work” whereas the young people seek balance and “work to live”. This cultural clash can make for tense times in the work environment.

2. Time to Plan Yes, Cow 23 is ready to calve, it’s a wet fall and the crops need to be harvested, but succession and business planning must be a priority. Set a date and location and stick to it.

• Another hot spot in cultural clashes involves who does what, when, and where. Frequently, the new family member or employee is like a “chip off the old block”. Often an audit of employee and management needs and capabilities and interest of the existing and potential workforce is overlooked. By evaluating the skills and personal traits needed in a business, employees can be hired who contribute new ideas and help to make the business more successful, instead of duplicating existing talent.

3. Economics and Growth Does the asset that is being transferred have economic potential? Better yet, is it currently profitable? An objective examination of this is critical with your lender and accountant.

4. Phase In, Phase Out What’s the strategy for the younger generation to phase in and the seniors to phase out? A timeline with responsibilities and duties of each party is a requirement for smooth transition of the business.

It’s no wonder that half of family business transitions fail to materialize. As you are doing your planning, be wary that the business culture issue can be a major hurdle to cross.

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. Summer 2007 PARTNERS

Guest Column

FARMS AND RENEWABLE ENERGY GENERATION

by Troy M. Cumings, Warner Norcross & Judd LLP

PARTNERS Summer 2007

INTRODUCTION Both the federal government and Michigan are currently implementing policies to dramatically increase the production of renewable energy–including policies specifically aimed at farms. For example, Congress passed the Farm Security and Rural Investment Act of 2002 that established a grant and loan program to support investments in renewable energy systems by farms. Also, in 2006, the Michigan legislature enacted a bipartisan package of bills that authorized additional renaissance zones for renewable energy facilities and created the Renewable Fuels Commission within the Department of Agriculture that will recommend strategies to promote the use of alternative fuels such as biodiesel and ethanol. In addition, Michigan’s 21st Century Electric Energy Plan proposes that 10% of Michigan’s energy generation be fueled by renewables by the end of 2015 and proposes a further goal of 20% by the end of 2025. Currently, about 3% of Michigan’s electricity is generated by renewable energy sources. Considering the escalating focus on global warming, Congress and the Michigan legislature will undoubtedly pass more initiatives in the future that support increased renewable energy production and provide financial incentives for this production. Farmers have a unique opportunity to profit from these initiatives by directly and indirectly contributing to renewable energy generation. DISCUSSION Although there are many sources of renewable energy–including thermal solar, photovoltaic, wave, and geothermal–two sources are particularly relevant to farms: wind and biomass. Wind energy is simply a form of solar energy that is created when air circulation driven by the sun’s heat spins turbines. Biomass can mean either the direct combustion of biological materials (e.g., burning switchgrass and corn stalks in a biomass generator) or the indirect combustion of biological materials (i.e., burning ethanol produced from corn).

1. WIND ENERGY A) Distributed Generation A Michigan farm can install and operate a wind turbine to generate electricity. A typical wind turbine designed for farm use has a 10-25 foot rotor and generates less than 30 kilowatts. Farmers need to be mindful of legal issues associated with constructing turbines, including zoning laws that might restrict the height and location of wind turbine installations, existing agreements that may prohibit wind turbines on the property, and contracts with companies to construct the turbines. After installing a turbine, a farmer must interconnect with the grid. Interconnection is a relatively simple process handled by the turbine owner’s electric utility according to the utility’s established procedures. The process is regulated by the Federal Energy Regulatory Commission and the Michigan Public Service Commission. The electric utility may charge the turbine owner a fee and, in some circumstances, other charges for the interconnection. In Michigan, the FERC regulations require utilities to pay generators with a capacity less than 30 kilowatts the “full avoided cost” for the power they produce. This is accomplished through net metering–a process whereby the utility charges a generator only for its net energy consumption. In addition, when generation exceeds the owner’s electricity demand, the owner can receive a credit (or possibly cash) for the net excess generation. Net metering can pay for the upfront purchase and installation costs of a wind turbine over time. And once the turbine is paid for, the continued operation of the turbine is pure profit for the owner. B) Wind-Farm Generation A Michigan farm can also expand its involvement with wind power by leasing a portion of its land for use as a wind farm to a utility or private generation company. A farm should analyze the legal issues involved with this type of arrangement, including the terms of the lease and any existing agreements that may prohibit the farm from leasing the property for this purpose. The terms of wind-farm leases vary, but a reasonable estimate for a 250 acre farm is $14,000 per year, with only 2 to 3 acres of land removed from farm production. The farmer would still be free to grow crops and raise cattle on the 247 acres untouched by the turbines’ small footprint. 2. BIOMASS In addition to wind energy, farmers in Michigan may participate in biomass-fired electricity generation in at least two ways. First, the farmer can harvest and sell energy crops

that are sources of biomass fuel. Second, a farm can harvest and burn the methane produced by animal waste to generate electricity. A). Biomass Fuel Production: Energy Crops Energy crops include corn, rice, switchgrass, and crop residue (stalks and leaves). A farm can sell these crops to a utility that can use them as fuel–primarily by co-firing the crops with coal in coal-fired power plants. A farm can also sell the crops to an entity that converts them into fuel sources like ethanol. In some situations, energy crops can produce similar or better profits for a farmer than food crops, and selling crop residue can commoditize an otherwise wasted resource. Transportation costs ultimately determine biomass production profitability in any given case. Therefore, proximity to a biomass–fired generation plant or ethanol distillery is essential for a profitable arrangement. B). Biogas Production Biogas is methane (natural gas) produced from the anaerobic digestion of animal waste. A farm can trap the biogas produced by a manure pit in a sealed digester. The farm can then transport the biogas to a turbine, where it is burned to generate electricity. The legal issues and interconnection standards applicable to biogas generators are similar to those applicable to wind turbine generators. Unlike the wind turbine scenario, however, many farms have the biogas capacity to produce more than 30 kilowatts. The Michigan regulations requiring net metering only apply to generators with a capacity less than 30 kilowatts. Therefore, the sales arrangements between these larger generators and utilities are much more open to negotiation. CONCLUSION Both Congress and the Michigan legislature are demanding increased renewable energy production and are providing financial incentives and support for this production. Farmers are well situated to capitalize on the growth of renewable energy in Michigan. But before deciding to become involved with renewable energy, a farm should investigate the possible financial incentives and analyze the many economic and legal ramifications involved with the particular type of renewable energy activity. Troy Cumings co-chairs his Firm’s Government Affairs Group. He counsels and represents businesses and associations on matters in front of state agencies and the Michigan legislature. Troy also practices in the area of environmental law. He has extensive experience in procuring economic development incentives for businesses such as brownfield redevelopment financing; natural resource matters related to wetlands, sand dunes, and inland lakes and streams; and CERCLA and state cleanup law matters. Troy can be contacted by e-mail at tcumings@wnj.com.

Summer 2007 PARTNERS

Director’s Corner

CATHY WEBSTER Your Region VI Director

Cathy Webster and her husband, Larry, have been farming in Michigan’s Clinton County for more than 41 years. Cathy and Larry started in partnership with Larry’s father in 1966, when their operation included the milking of 57 cows. In 1991, the Webster’s son, Wayne, joined the partnership. Wayne was the 4th generation to farm at the location. Tragically, Wayne was killed in an auto accident in July 2005. A decision was made to sell the dairy operation and the sale was finalized in April 2007. At the time of the sale, Webster Ridge Dairy had grown to a milking herd of more than 900 cows. The operation also included the raising of more than 1,300 acres of alfalfa and corn. The Websters also have a daughter, Michelle Hammond (Jeff), and three grandchildren. In addition to handling the bookkeeping duties for their farm, Cathy previously spent 15 years as a bookkeeper for a farm implement dealer and following that, she worked in the mortgage department of a local bank. She has been a Farm Credit Board of Director for 15 years, originally starting with Farm Credit Services of Michigan’s Heartland before it became GreenStone FCS.

PARTNERS Summer 2007

What do you enjoy most about being a director of GreenStone FCS?

How would you describe the value GreenStone FCS brings to its customers?

First and foremost are the people I’ve met over the years… the staff, the management, the other directors. It’s also been enjoyable and invaluable to learn about farming operations in other states, and how their farming practices and challenges are different from what we may have here. These people become your friends and the relationships become very important to you. As a board member, it’s also been extremely rewarding to work on behalf of the customers and their best interests, while also having in mind the long-term interests of the organization. It’s been a very good experience.

For us, it’s always been that GreenStone knows the farming business and has a very good understanding of what is best for our dairy farm. I’m sure anyone else doing business with GreenStone would agree…that their industry expertise from being specifically farm lenders is what sets Farm Credit apart. You just don’t receive that type of service at a bank. Also, in the last 15 years or so, the Farm Credit pricing model has become so much more competitive. So you couple Farm Credit’s knowledge of agriculture with the competitive interest rates and you have an exceptional lender.

What would you say is the most important issue facing farmers today?

Ten years from now, what do you anticipate will be the most significant change to agriculture from today?

Being involved in a dairy operation with a lot of animals around, I would say it is without question government regulations, in particular, manure management. The regulations seem like they’re constantly changing, and it becomes extremely challenging and frustrating for farmers to make sure they are doing the right thing.

“GREENSTONE KNOWS THE FARMING BUSINESS AND HAS A VERY GOOD UNDERSTANDING OF WHAT IS BEST FOR

I don’t know that we’re really going to see anything significant from what we know today…I just think we’re going to see gradual and continuous changes similar to what we are seeing right now. You’re going to see more expansions, bigger and more centralized operations. That’s what’s happening now…that’s what has been happening…and it’s what is going to continue to happen. Therefore, I don’t necessarily think this will be a big change; it simply is going to be continual change. As with all changes, we learn, we grow and we adapt. Agriculture is always going to be here and I think it has a very bright future. I think we all want to keep eating!

OUR DAIRY FARM... BEING SPECIFICALLY FARM LENDERS IS WHAT SETS FARM

CREDIT APART. YOU JUST DON’T RECEIVE THAT TYPE OF SERVICE AT A BANK.” It appears like it is worse each year. I’m not sure what the solution is exactly, but it certainly would help if the organizations involved would work more closely to agree on the regulations that the farmer needs to comply with. The large majority of farmers really are interested in complying and doing the right thing, but they need to hear a consistent message in order to effectively make that happen.

Summer 2007 PARTNERS

Young, Beginning, and Small Farmer Focus

All in the family– New generation finds niche in dairy market By Dick Lehnert

hen Wendell and Ruth Van Gunst’s daughters left the dairy farm to attend Dordt College in Iowa, they had no idea they’d find young men who would one day take over their farm. But that’s what happened. The formal transition process took place last year, moving overall management duties from Wendell to two sons-in-law who now share them. Paul Arkema, who married Betsy, manages the milk processing plant at Country Dairy, overseeing the processing, bottling, manufacturing and sale of milk and milk products from the farm’s 1,200 cows. The farm handles milk and milk products from production to retail. Rob Eekhoff, who married Teresa, manages the cropping system that produces 2,650 acres of corn and 1,300 acres of alfalfa to keep those cows fed. The two men, both 38 and natives of Iowa, without farm backgrounds, who met their future wives in college, are working together learning to manage “the cow side.” Wendell is still very involved in the process of coaxing milk

PARTNERS Summer 2007

three times a day from those cows, which are kept in four separate herds at four locations on the farm. That’s the part that has Paul the most nervous, because, he said, Wendell has “a gift” when it comes to understanding and managing dairy cows. There are four Van Gunst daughters. Trudy married Matt Ash. They live and work in Minnesota, so they have no working interest in the farm. They have a financial interest. Amy Van Gunst, who has a family counseling practice in Grand Rapids, also works part-time for the farm interviewing and hiring employees. The farm has a payroll of 85 to 90. To formulate the transition, family members sat down together at the GreenStone Farm Credit Services’ office in Grand Rapids. That was a logical choice. Country Dairy has had a long relationship with GreenStone FCS, which makes loans to them for both real estate and capital purchases. They met with Mike Fassler at Salisbury Management Services, who helped them

develop their transition plan. That overall plan covers ownership and management. Country Dairy is a corporation with a board of directors that includes Wendell (called Wendy by everyone) and Ruth and members of “the fourth generation” that includes the daughters and their spouses. The plan includes provisions for the fifth generation, which includes the 14 grandchildren of Wendell and Ruth, who range in age from 1 to 21 and are the children of their four daughters. Part of the plan is to offer positions to family members who want to work for the dairy, after they have finished higher education and been away from the farm, Paul said. Financial interest is separate from employment. Family members who actually work on the farm include the two men and their wives. Betsy does payroll and works with her husband in marketing. Teresa runs the farm store and also the restaurant. The farm is located in west central Michigan near the intersection of M-20 and U.S. 31, north of New Era and

just south of Shelby, an area known for consumers, to asparagus, fruit and tourists. which Country R REALLY MADE US A NICHE IN The tourists eat at the restaurant and Dairy was able to buy some of the 700 pounds of cheese TS APPEARANCE IN MILK respond. In his THE MARKET Country Dairy makes and sells each week. view, the product The financial transition was easier “did nothing for RESULTED IN AN OUTCRY FROM than the management transition, Paul the consumer and said. Wendell had changed the farm CONSUMERS TO WHICH OUNTRY AIRY never really from a sole proprietorship to a helped the dairy WAS ABLE TO RESPOND corporation in 1994, the year Paul came industry. to work on the farm. Rob had joined the Dairymen who use year before. In 1997, the structure was it have to because hook,” Paul said. “Wendell realized pretty modified when another farm was others do. But those who don’t want it quickly that some people did not want purchased and treated as an LLC are adamant. We have customers who’ll that in their milk.” involving the three working families. The farm developed a label and a sales drive half way across the state to buy The transfer of financial interests began our milk.” strategy based on selling milk produced then, with “a lot of gifting” from One persistent item of discussion by from cows not treated with rBST. Wendell and Ruth, Paul said. the board is how far this trend will go. “It was customer-driven from day Country Dairy’s roots go back to the Paul sees it as “a growing fire. BST will one,” Paul said. “It has pushed our 1880s, when Andrew Van Gunst be an issue for some time to come,” he emigrated from the Netherlands. said. The “no BST” sales tool gives them The farm he and his wife Jane started included a few cows, some fruit and vegetables. Their son Henry and wife Ellen took over in 1936, and the farm passed on to Wendell and Ruth in 1968. Wendell was the family’s first specialized dairyman, focusing on purebred Holstein cattle. The real change came in 1983, Paul said, when Wendell became frustrated with the efforts of his cooperative to sell milk profitably and went into the The Country Dairy business of processing and ’s Farm Store, esta blished in 2004, is throughout the re a destination for gio n. bottling milk. school tours and tourists In February 1994, Monsanto began marketing Prosilac, a growth over the last 10 years.” The farm a premium of 20 to 30 cents a gallon on genetically engineered (recombinant) has 10 times as many cows now as it had their milk. The question is, should they form of the natural hormone bovine in 1983. “rBST really made us a niche in somatotropin (rBST). When rBST hit the the market,” Wendell said. Its appearance go further and perhaps produce milk organically? Sales of organically market, “the phone began ringing off the in milk resulted in “an outcry” from

“ BST

”...I

“

”

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Summer 2007 PARTNERS

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News Update

produced food are growing exponentially and the premium would be in dollars per gallon, not just cents. But it would take a whole different production process that would eliminate

Wendell is quite pleased with the way the farm has grown, remained a family business and now is moving to the next generations. He also likes his new role. The farm contains four

use of herbicides in corn production and antibiotics in herd health. But, given consumer trends, it’s worth discussing, Paul said.

separate milking operations, ranging from the smallest, a 100-cow purebred operation to which he now devotes special attention. “I’ve gone back to the

Because... down on the farm

is no place for amateurs!

cattle end of the business,” he said. Each herd has a herdsman, who reports to the top herdsman, Johann Vosloo. “He’s the person I work with,” Wendell said. Most of the farm’s dairy products– milk, ice cream, cheese–are handled by a distributor, Cedarcrest Dairy, but in 2004 Country Dairy opened its own retail store as well. In addition to milk, cheese and ice cream, it has a restaurant with daily specials, a gift store and Moo School, a destination for school tours and tourists.

When it comes to agricultural lending, we know our stuff. After all, GreenStone Farm Credit Services has proudly served farmers for over 90 years – not many banks can say that! From financing that piece of equipment for your operation to accounting products that keep your books on track, GreenStone FCS is always here for you.

Our products and services: • Farm Real Estate Loans • Construction Loans • Equipment Loans • Life Insurance • Part-time Farm Loans • Crop Insurance • Operating Loans • Appraisal Services • Rural Mortgages • Farm Recordkeeping • Leases • Tax Services

800-444-FARM www.greenstonefcs.com EOE

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PARTNERS Summer 2007

News Update

News Update Soldiers and Sailors Interest Rate Relief Act Available for GreenStone Customers in Military Service GreenStone FCS loan customers on active military duty and their dependents are eligible for the Soldiers and Sailors Interest Rate Relief Act. The policy applies to all

loans where the borrower or co-maker is in active military service in any of the service branches–Army, Navy, Marine Corps, Air Force, Coast Guard, or certain Public Health Service positions detailed for Army or Navy duty–regardless of whether they are in a combat zone, engaged in combat or in line for combat duty. This includes any reservist

who is called up from reserve status to active duty, as well as any National Guard member who is called to active duty. According to the Federal legislation, the

“ACCORDING TO THE FEDERAL LEGISLATION, THE MAXIMUM INTEREST RATE THAT CAN BE CHARGED IS SIX

(6.00%) PERCENT PER ANNUM...” maximum interest rate that can be charged is six (6.00%) percent per annum, unless a court of law establishes a different rate in response to a petition. If the customer’s rate presently is higher than that, it will be lowered to six percent effective from the date they are placed on active duty status and continue until the date they are released from active duty status. If a customer’s rate is equal to or less than 6% per annum, no change to the rate will be processed. GreenStone also cannot foreclose or collect on loans, or charge default interest or late fees to the borrower, while they are on active duty according to the Act. The loans have to have been obtained prior to the borrower’s active duty. Rate reductions will be provided either upon application by a customer or when staff otherwise becomes aware of customers engaged in active military status. Contact your local branch office to apply for the Soldiers and Sailors Interest Rate Relief Act if you or your loved ones meet the qualifications.

Summer 2007 PARTNERS

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News Update

GreenStone FCS Board Member Retires After 28 years of service to Farm Credit boards in Michigan, David C. Thuemmel from Port Austin, Michigan retired from the GreenStone Board of Directors. He was presented with a Testimonial Resolution from the board expressing their appreciation and deep gratitude for his devoted service, sound judgment, and counsel based upon his successful agricultural and business background. Mr. Thuemmel served as the board chairperson for the former FCS of East Central Michigan association for ten years, the PCA of East Central Michigan, and the PCA of Sandusky. He also served as chairperson of the GreenStone board for two years and was active on several committees during his tenure as a board member. Dave is a graduate of Michigan State University and served in the military. He was a dairy farmer for 35 years and a forage crop producer for several years. He is active in the Port Austin community where he served on the Port Austin and North Huron Board of Education and the Huron Intermediate Board of Education. He is also active in several other community organizations and the United Protestant Church of Port Austin. Thuemmel and his wife Charlotte reside in Port Austin, a northern town in Michigan’s “Thumb.” They have three grown children and several grandchildren. Dave will be missed by the GreenStone Board of Directors and management.

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PARTNERS Summer 2007

GreenStone FCS Announces Board of Director Election Results GreenStone Farm Credit Services has announced the results of its recent election for four seats on its Board of Directors. IN REGION I (MICHIGAN), incumbents Lynn D. Gould, from Clare County, and Gilbert Ritter, from Saginaw County, were re-elected for three-year terms. Gould, a three-year board member, rotational grazes 500-head of stock cattle and custom feeds 300-head in addition to owning and operating a bed and breakfast inn. Ritter, owner and operator of a cash crop farm growing 800 acres of wheat, corn and soybeans, is a 16-year board member. IN REGION II (MICHIGAN), incumbent David McConnachie, from Sanilac County, was re-elected to a three-year term, while Scott Roggenbuck, from Huron County, was newly elected to the GreenStone FCS Board of Directors for a three-year term. McConnachie, a nine-year board member, is in partnership on a 3,300 acre cash crop farm producing sugar beets, corn, wheat, dry beans, and soybeans. Roggenbuck farms in a cash crop operation, custom harvests 1,000 acres, finish feeds 500-head of steers, and operates a Pioneer seed agency. The 2007 Nominating Committee included from Region I: Richard C. Kleinhardt, Clare County; and Eugene Weisenberger, Saginaw County; from Region II: Timothy F. Ruggles, Tuscola County; and Scott K. Shaw, Sanilac County; from Region III: Larry D. Bush, Lenawee County; Bonnie M. Hunt, Lenawee County; and Gary A. Weidmayer, Washtenaw County; from Region IV: Roger R. Gentz, St. Joseph County; Kenneth Norton, Branch County; and William M. White, Cass County;

News Update

from Region V: Alan L. Sherwood, Gratiot County; and Harold Walcott, Ottawa County; from Region VI: Patrick J. Feldpausch, Clinton County; and Douglas Irrer, Clinton County; and from Region VII: Vernon L. Ainsworth, Shawano County; and Nancy Meulemans, Outagamie County.

Manitowoc and Escanaba GreenStone Offices Open in New Locations Effective May 7, GreenStone Farm Credit Services has moved its Manitowoc, Wisconsin office to 2005B Dufek Drive. This is adjacent to the Menards Home Improvement Center.

GreenStone’s Manitowoc Branch celebrates with a Ribbon Cutting Ceremony in June.

The new, full-service branch replaces the previous Manitowoc location at 3712 Kadow Street, which was a part-time satellite office. The Escanaba, Michigan GreenStone office moved into its new location at 1801 North Lincoln Road, Suite A on May 31. This replaces the old location at 1401 North 26th Street. All of the staff members and the

GreenStone’s Escanaba Branch

phone and fax numbers at both of the offices remain the same.

GreenStone customer appreciation picnics scheduled at Oldsmobile Park Break out the Peanuts and Crackerjacks! Baseball season is upon us and GreenStone’s Charlotte and St. John’s offices are treating customers and their families to a Lugnuts game at Lansing’s Oldsmobile Park. In addition to an exciting nine innings, each event includes a buffet-style dinner and a fireworks show following the game. The St. John’s branch event will be held on July 20; gates open at 5:50 pm. For more information contact the St. John's staff at 989-224-9321 or e-mail Tracey at tracey.dominguez@greenstonefcs.com.

The Charlotte’s branch event is scheduled for August 3. For more information contact the Charlotte staff at 517-543-1360 or e-mail Kelly at kaiken@greenstonefcs.com.

Summer 2007 PARTNERS

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Because ... recreational land

financing has its rewards!

Itâ&#x20AC;&#x2122;s no fishing tale... when it comes to recreational land loans, GreenStone Farm Credit Services offers affordable options including terms up to 30 years. Plus, now through September 30, 2007, when you finance eligible recreational land with GreenStone FCS, youâ&#x20AC;&#x2122;ll be entered to win exciting prizes, including an all-day excursion with Fishing Pro Mark Martin!

Mark Martin

Call us today for more information.

800-444-FARM

www.greenstonefcs.com

*Eligible customers will be entered into prize drawing after securing a qualifying recreational land loan with GreenStone FCS by September 30, 2007. Grand prize fishing excursion includes: six hour guided fishing trip for two, necessary supplies and gear and $100 for travel and related expenses. GreenStone FCS reserves the right to make case-by-case decisions on the distribution of prizes. GreenStone FCS employees and their immediate families, along with GreenStone directors, are not eligible. Residential properties less than 25 acres are not eligible for this promotion.

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