CEO Comments

CEO Comments:

Heading into Harvest

I don’t know about you, our members, but this year just seems to be flying by for me. As I am writing this update in early September, it just doesn’t seem possible that football season is here and more importantly, the fall harvest will be well underway by the time you read this. Your GreenStone executive team and Board of Directors had our board meeting and annual planning session on August 15 and 16. The team shared some excellent results with the board and I continue to tell anyone that will listen to me that GreenStone is the best performing Farm Credit association in the country. That doesn’t happen by accident. It starts with you, our customers, our members, our owners. Having the courage to make bold decisions every day regarding your farms and businesses and meeting your financial obligations allows GreenStone to be a dependable, competitive and responsible source of credit and financial services for you and all our members. It also doesn’t happen without our 600 plus dedicated employees who do everything possible to meet the financial needs of our members. Some of the highlights we discussed with the board are as follows:

Financial Results to Date

- Net income for GreenStone is on pace to be a record in 2022. - That net income should allow for another record Patronage payout in March of 2023. - Loan growth has been very strong for your organization. The average balance of loans outstanding in 2022 may end the year between 9%-10% higher than 2021. - Credit quality is at an all-time high.

Comparison to other Farm Credit Associations

I am a “little” competitive. Dave Armstrong, my predecessor, was the same way. A number of years ago, we developed a scoring system that measured GreenStone against the other large Farm Credit associations in the country. Today, we are the 7th largest association with approximately $12.5 billion in total assets. We measure ourselves against the 12 largest associations in eight financial categories that include areas such as operating efficiency, profitability, capital, credit quality and growth. “Knock on wood,” we consistently rank in the top third of these associations when we total our scores in these categories. Well, for the first six months of 2022, we led the group as the top financial performing association in the country according to what we believe is a well-balanced scoring system. Our staff work very hard to make your association one you can be proud of and confident in.

Customer Satisfaction

In our recently completed customer satisfaction survey, you rated our customer satisfaction at 95% satisfied or highly satisfied, up from an already high result last year of 92%. Almost all of our business lines and regional teams also saw strong and improved results. These results don’t happen without our dedicated staff. We work hard to make our organization a great place to work for our teammates, and those dedicated teammates do an outstanding job of servicing our members. I am very proud to work with a team who provides the drive and cooperative spirit to help meet your needs every day. Thank you to all of the randomly selected members who responded to the survey. We pay attention to every ranking, and we read every comment. We use your feedback in an effort to make us a little better every day and every year.

Commodity Conditions

I did not plan on sharing so much detail on commodity conditions and certainly don’t plan on this detail in the future. However, I have been with GreenStone 15 years and I don’t remember it being this consistently good from all areas of our territory and for so many of the commodities.

Previously, I said I was a little competitive. Well, I am also a little superstitious. I don’t want to jinx our members before we have crops in the bin or mess up our commodity prices. I also realize we had dry spots in Michigan and northeast Wisconsin and our members are still facing challenges. However, on average, we have been blessed with a very strong growing season and good commodity prices – so let’s acknowledge the wins while we continue working together to address the challenges. The following are summaries from the areas of GreenStone’s territory. Dairy • Dairy is looking to have a great year with strong markets. • The dairy feed situation should be average or better and quality looks good. The weather has been conducive to producing exceptional crops. • Labor issues continue to escalate, which could cause some to consider a transition to a cash crop operation. Crops • Crop conditions as a whole appear to be in great shape with yields looking strong. With a diverse portfolio in most of our territory, many commodities appear to be looking great. • The area has received a good amount of moisture and heat, although a few pockets that missed the rains that could result in lower yields. • Corn and soybeans are expected to have good yields and prices.

Many individuals contracted at good prices during the spring and there has been good rain in a majority of the areas. • It is anticipated that the cost of production and breakeven prices will increase during the next 12 months, cutting into margins. Timber • Strong results in most areas of the timber industry. • Weather in the U.P. has been very good for both the farm and timber operations. • Adequate rainfall should result in good tree growth this year. Greenhouses • Greenhouses have had a solid year. When talking to many growers it is not the year that 2020 and 2021 turned out to be but are still expecting positive margins. Fruit • Weather has been average. The fruit crop should be good this year. • Apples are anticipated to have a good crop, better than last year. • Peaches looked excellent throughout the summer. • Cherries appeared to have a good year from a production standpoint, however pricing is still unknown given the payment structure in this industry. Given the good production, some processors have begun only accepting a limited quota due to the large amounts of crop on hand. • Blueberry size is down slightly in 2022 but strong quality and pricing have more than made up for any issues. So again, I don’t want to jinx your situation nor downplay your challenges. It would be wonderful if we didn’t have labor issues or rising operating expenses. It would also be outstanding if you didn’t have to worry about the cost and availability of fertilizers for 2023, among other things. But I didn’t know if I would ever again get to report such positive anticipated results from so many corners of our territory. Many of us ask for God’s guidance and blessing every day. Michigan and northeast Wisconsin have seen those blessings so far in 2022. Best wishes for a safe and bountiful harvest season! Please feel free to reach out to me any time if I can ever be of assistance. Thank you for your partnership and business!

Travis Jones

517-318-4144 travis.jones@greenstonefcs.com