CEO Comments

CEO Comments:

Welcoming Fall

What a difference a year makes! At this time a year ago, we started to come under more restrictive COVID-19 orders as infection rates began to spike again igniting what turned out to be a second spike that was worse than the original outbreak in the spring of last year.

While the Delta variant has surged through populations in a few states this summer, our marketplace (in general) has experienced mostly mild to moderate rates of infection recently. It’s been nice to enjoy life with few mask and/or social distancing restrictions. I know for me, it’s been great to see fans back in the stands here in East Lansing, MI and Madison, WI as well. Okay… maybe even in Ann Arbor, MI! There’s nothing like losing some of the simple things in life we typically take for granted to make us grateful when they finally return. Fall harvest is underway across our territory with “outstanding” yields having been anticipated early in many areas. However, corn producers are now realizing the significant yield impacts from tar spot. Higher prices for most crops will help bridge this gap, and bring a well-deserved smile to those cash crop customers experiencing high yields in other crops this year. Although dairy farmers and many of our fruit growers (who suffered losses from the spring’s freezing temperatures) are likely not going to experience the same euphoria as crop producers, they have experienced much worse in prior years and should do okay in 2021. In fact, based on our ongoing customer financial assessments, we’ve upgraded a significant amount of previously classified high-risk loan volume across a variety of commodities resulting in one of the lowest risk profiles in GreenStone’s 21-year history. This further supports the industry’s anticipated resilience of strong net farm income in 2021 based on economic fundamentals rather than the record government support and stimulus payments received last year.

PPP Loan Update

Speaking of government stimulus programs, I am very pleased to report that as this edition of Partner’s goes to press, GreenStone has assisted all of its customers in submitting their Paycheck Protection Program (PPP) loan forgiveness applications to the Small Business Administration (SBA) with less than 3% of the more than 4,900 loans awaiting final forgiveness. This is a significant milestone for GreenStone and our customers who received these funds to help keep their employees and cover other eligible expenses during the very difficult economic times created by the pandemic. It has NOT been an easy path due to the complexity and everchanging direction of the program. However, I am very proud of our team members who worked tirelessly to “do the right thing” (as our Core Four Values encourage) to help our customers through these tough times.

2022 and Beyond Business Direction

Moving forward, the GreenStone board and leadership team have completed the 2022 business planning process, which includes GreenStone embarking on a significant “digital transformation” strategy over the next 5+ years. The purpose of which is to continue to provide you with higher levels of service, convenience, and security while striving to create additional efficiencies that keep our costs competitive and our Patronage payments to you strong. Over the next 12 to 18 months, we will be implementing a new loan origination system, customer relationship management platform, a forms generation application, plus enhancements to our credit underwriting tools. While many of these systems are primarily “behind the scenes,” the benefits are far reaching. For example, the credit underwriting tool alone will allow customers to conveniently share their financial information with us through direct data feeds, optical scanning or other methods that will improve the accuracy of the information provided and eliminate redundant keying just to name a few. As you know in your business, constant change is a given. Our goal is to never stop making continuous improvements in our business that will make a positive impact on yours as well.

2021 Customer Satisfaction Survey

Our 2021 customer satisfaction survey results dropped slightly to 92% from 95% satisfied/very satisfied in 2020. The primary driver appeared to be concerns by some customers that GreenStone did not open its offices for walk in traffic as early as some of its competitors did. Also, due to the “tsunami” of new loan demand, including the PPP program we administered, our application to loan closing times were unusually long in some cases, often due to factors outside our control such as the time of completion of appraisals by third party appraisers and slower turnaround times at title insurance companies. Yet, overall, the results and feedback were very positive. We have reviewed the comments many of you provided in the surveys and are committed to make course corrections to exceed your expectations in the future. I want to thank all of you who took the time to complete these surveys to help us help you better in the future.

Welcome to GreenStone’s New Board Member

I would like to also introduce you to our newest Board Member from Region 2. Michael (Mike) Feight was elected to the board out of Region 2 in June of this year. He is from Tecumseh, MI in Lenawee County and has been a member of GreenStone and one of its predecessor associations for 36 years. He operates a partnership with his father and brother which includes 2,500 acres of corn, soybeans, and wheat along with 75 acres of carrots for Campbell’s Soup. In fact, Mike’s father, Fred, was one of the founding board members of GreenStone when it was formed in 1999/2000.

So, please read page 26 to hear more from Mike, and join me in providing him a warm GreenStone welcome!

Value Above and Beyond Just Loans

Before I close, I would like to focus your attention on this edition’s GreenStone Story about our land value benchmarking project, on page 23. Many of you likely already know that for years, GreenStone and its predecessor Federal Land Bank Associations maintained benchmark farm valuation data to assist its appraisers in completing appraisals that are required for the extension of credit. Today, with the advancements in information technology, we are excited about being able to provide much of this same information and more to you, our members, to use in your evaluation of future land purchases, rental negotiations and/or real estate values in general across our territory. We hope you find this information of value and see GreenStone as much more than just loans! From risk management products (crop insurance, DRP, etc.) to accounting and income tax services and now real estate benchmarking data, we are truly your one stop for high quality financial products and information. Best wishes for a safe and productive harvest and thank you for your business! Please feel free to reach out to me any time at if I can ever be of assistance.

Our goal is to never stop making continuous improvements in our business that will make a positive impact on yours as well

Dave Armstrong

517-318-4105 dave.armstrong@greenstonefcs.com

➡ Kristi and Nate

Shopbell own 3 North

Vines, a grape-to-wine enterprise in Croswell,

Michigan. Young, Beginning, and Small Farmer Feature

While Kristi and Nate Shopbell had corporate jobs, they got into wine as a hobby. They enjoyed wine tourism and making their own wine at home, and they were having fun doing it. Their interest then developed into the desire to start their own wine business.

Over a two-year process, the Shopbells developed their plan and educated themselves on how to do grape-towine. They worked with the librarians in Plymouth, Michigan, to research weather and soil data to see where they could feasibly grow a vineyard. They consulted with the MSU Product Center and the national Small Business Development Center that support startups. “We also attended a lot of Google University,” Kristi joked. “As we researched, I realized I’m an East side of Michigan person. Not that I don’t love the West side, but we knew we wanted to start our business here. Then the question came – can we grow on the East side?” In Croswell, Michigan, the Shopbells found 35 acres, with 17 tillable, that had been a soybean field. In 2007, they moved there from Plymouth and entered into a two-year land contract. Shannon Arbaugh, a VP of lending for GreenStone, became a part of their business plan when they financed their first tractor. They then began planting their vineyard, but the weather didn’t cooperate. “In 2008, we planted 24 vines on one acre,” Kristi said. “Then the next season, we planted another acre. They were up and growing great in 2014, which is when the polar vortex hit. It was -30 degrees, and we lost 40% of the grapes. It was terrible, and the ones that did survive still looked terrible.” Unfortunately, the next season wasn’t any better. “We replanted, and then the second polar vortex hit,” Kristi said. “The first years on a vineyard are a lot of pretty intense work, and now we were back to square one.” The Shopbells modified their planting plan, and eventually found hardy varietals that performed better in colder, unpredictable weather. The land came with a house that had been on the market for four years, and it needed a lot of work. The Shopbells worked with GreenStone to finance it. “Shannon came to look at the house as we were remodeling it,” Kristi said. “It’s an 1800s farmhouse, we had to gut it, and fix the foundation of it. Shannon was realistic, but also supportive of what we were doing.”

➡ Shannon Arbaugh, VP of lending for GreenStone, has worked with the Shopbells since they financed their first tractor.

➡ 3 North Vines formed a partnership with

Ryan Mulrenin to open a second tasting room in Lexington. Despite the impact of the polar vortex, in 2014 the Shopbells opened a tasting room on their farm site – 3 North Vines. “It’s great the way the property is laid out, because it’s on top of a hill, and the barn is surrounded by vines,“ she said. “It’s a cool kind of environment, because now the tasting room is creeping into the vineyard, which makes people ask a lot of questions when they’re right next to the grapes. This gives us a chance to teach about the actual agriculture that goes into our wine.” The vineyard tasting room in Croswell is currently open seven days a week and employs 14 part-time and two full-time people. Nate works off the farm as a project manager for Ground Effects Ltd., but he spends every spare minute on the farm managing the vineyard. Kristi works in the vineyard and is more involved in the wine making side of the business. Over the year, she prunes the vines, cuts them back, rakes them out and cleans up the vineyard, tucks the vines, removes leaves by hand to allow for better air movement, and clips buds. She compared making wine at home to making it commercially to going from making one batch of cookies to 25. “When you multiply your product by 25, you run into challenges like lifting a 200-gallon tank – knowing where you set it, that’s where it’s going to stay,” she said. “You need more grapes, and once a year you have the one chance to bring it in and make everything right. It goes from field to crusher to stemmer…not many wineries in the state grow their own grapes, and I can see why. It’s a lot easier to buy them.” The Shopbells later met Ryan Mulrenin and formed a partnership in a second tasting room in downtown Lexington. They also worked with GreenStone on the expansion “I love the downtown atmosphere, and we’re going to add a brewery and kitchen aspect to it in the future,” Ryan said. “With our experience, it should be a good transition.” Shannon has enjoyed working with 3 North Vines for the last decade. “I’m continually amazed at the research they do for everything related to opening, growing and expanding their business,” Shannon said. “They had a vision and they have made it a reality – a beautiful and successful reality.”