Fall 2014
Meeting Demand for Locally Grown
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Who we are: Northwest FCS is a customer-owned financial cooperative providing financing and related services to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, rural homeowners and crop insurance customers in Montana, Idaho, Oregon, Washington and Alaska. Northwest FCS provides approximately $12 billion in loans and is a member of the Farm Credit System, a nationwide network of borrowerowned lending institutions that provide approximately $205 billion in loans to rural America.
Board of Directors Karen Schott, Chair, Broadview, MT Dave Nisbet, Vice Chair, Bay Center, WA Rick Barnes, Callahan, CA Christy Burmeister-Smith, Newman Lake, WA Jim Farmer, Nyssa, OR Mark Gehring, Salem, OR Dave Hedlin, Mount Vernon, WA
FEATURE STORY > 3 Market-focused entrepreneurs are tapping into consumers’ growing appetite for locally grown food.
John Helle, Dillon, MT Greg Hirai, Wendell, ID Herb Karst, Billings, MT Kevin Riel, Yakima, WA Nate Riggers, Nez Perce, ID Julie Shiflett, Spokane, WA Shawn Walters, Newdale, ID
About Yields Yields is produced for stockholders of Northwest FCS, an Agricultural Credit Association. Comments and story ideas can be sent to the Marketing Department, c/o Northwest FCS, P.O. Box 2515, Spokane, Washington 99220-2515.
AgVision Financing for the Next Generation > 10 Executive Producers Summit and Succession Planning Seminar > 13
website: northwestfcs.com
Northwest Farm Credit Services is an equal opportunity employer and does not discriminate on the basis of race, color, religion, sex, national origin, marital status, age, disability,
Protecting Your Security When You Travel > 15
disabled veteran, Vietnam era or other eligible veteran status.
Locally Grown Opportunities Phil DiPofi, President and CEO
As consumer demand increases for locally grown food – particularly in large, urban markets like Seattle and Portland – we see a growing number of new producers getting started in agriculture. They’re interested in farming and learning how to build a business. Getting involved in the local foods market gives producers the opportunity to connect directly with the consumer. Most consumers purchasing locally grown products want a connection to the land. They tend to be more health conscious and appreciate a wider variety of food. People caring more about where their food comes from is a good thing for agriculture. Unfortunately, some people have never talked to a farmer before. Connecting with producers helps consumers appreciate farmers and what it takes to grow food. At Northwest FCS, we see tremendous opportunity to serve these niche markets. But they’re quite different from production agriculture. We’ve expanded staff to learn more about these producers’ needs. We know the local foods market is extremely diverse, which presents some challenges. We’re looking for ways to develop new systems and delivery channels to better address their needs. The next generation of farmers and ranchers will be more diverse than ever before. They’ll have a variety of opportunities to bring innovative ideas to agriculture. Our mission is to serve all aspects of agriculture. Urban farming presents an exciting business opportunity for Northwest FCS and we are looking forward to establishing the same long term relationships we’ve been privileged to have with traditional producers.
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Consumer demand for local foods is undeniable and growing. More and more people want to know where their food comes from. Yet, not so obvious is what defines “local.” When people hear “local foods,” they often picture small growers selling directly to consumers through farmers’ markets, farm stands or you-pick farms. Those are definitely aspects of local foods. But, retail grocers and the service industry are responding to the demand for local foods too. Their challenge is how to provide safe and reliable quantities of small-volume products through large-volume channels at affordable prices – 52 weeks a year.
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We recently visited with several Northwest FCS customers who represent a broad spectrum of the local foods marketplace. Some sell directly to consumers, while others use indirect channels to market through regional food distributors, restaurants and grocery stores. The following stories reflect how these market-focused entrepreneurs are tapping into the consumers’ growing appetite for locally produced foods.
Sol to Seed Farm Visit the University District Farmers’ Market in Seattle and you’re likely to meet Matt and Deanna Tregoning with Sol to Seed Farm. They’re here every Saturday from April to Thanksgiving to sell a bounty of fresh vegetables from their farm in the Snoqualmie Valley, just 30 minutes from the city. The Tregonings have a unique story to tell. Matt works part-time for a title company and Deanna is a full-time nurse. Neither grew up on a farm, but they share a passion for eating healthy and growing their own food. Today, Sol to Seed Farm is well known for their quality and variety of produce. Matt and Deanna grow all their vegetables from seed and manage the farm themselves – without employees – to ensure consistent quality from the ground up.
Deanna reaps the bounty of harvest
Matt and Deanna didn’t plan to become farmers. Originally, they were just looking for property to get away from the rat race and grow their own food. But, all that changed in 2005 when Deanna and Matt volunteered for a work share program with Jubilee Farm. In exchange for food, they worked four hours a week. Their passion for the land and farming grew. In 2008 they were able to purchase twenty acres of farm ground through Northwest FCS’ AgVision program for young, beginning producers. “The land was being leased by a Hmong flower grower and it hadn’t been farmed in years,” says Matt. “The place was a mess, totally overrun. We found a whole car dismantled in the blackberry bushes. But, we knew this valley had some of the best soil in the world. It was important for us to find land with a house, too, because you can’t build in this flood plain. Before we moved in, the first two years were tough. We were both commuting from Seattle and trying to get as much done in the daylight as possible. Now we’re on the farm full time. I think it’s really important to live here so you get to know your land in all seasons.”
Naturally grown to meet consumer demand Sol to Seed Farm is Certified Naturally Grown, a designation based on the highest ideals of organic farming tailored for Matt and Deanna have been selling at University District Farmers’ Market for four years.
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to sell to restaurants or hospitals, we’re being asked to compete in a wholesale environment. We can’t afford to drop our prices if the economics don’t line up on the production side. It’s a challenge.”
Building customer relationships Matt and Deanna actively use social media – Facebook and Twitter – to build customer relationships and share their story. They share fun photos, healthy recipes and the Tregonings’ sense of humor, like a recent Facebook post about Hank, the “Crazy-Eyed” Jalapeno.
Ricky Adams, Northwest FCS Relationship Manager and Matt discuss sustainable growing practices
small-scale, direct-market farmers. Matt and Deanna use heavy cover crop rotations to build nutrients and amend the soil. Chicken manure is used for fertilizer and the birds come in handy when it’s time to clean out the greenhouses. It’s amazing to see how much produce the Tregonings grow on this small parcel of land. “We’re actually growing less, but producing and selling more,” says Matt. “We’ve gotten a lot more efficient. When you first start out, you’re trying to grow everything – five different varieties of this or 10 different varieties of that. Then you start to figure out what people really want. Why grow 150 feet of broccoli when you can only sell 100 feet? It doesn’t make sense to grow it if you can’t sell it.”
Sustainable pricing Seattle is a great market for local foods with a large, diverse population willing to support local farms. But, Western Washington is also a very expensive place to live and work. To address the challenges, Matt recently served on a diverse, King County steering committee looking for ways to increase local food production and pay farmers a living wage. “People were shocked when I told them I make $4.50 per hour farming,” says Matt. “Sometimes people think if we’re going to farmers’ markets and getting market prices that we’re making tons of money or driving food prices up. That’s not the case. We can’t sell something for a dollar if it costs us three dollars to produce. We need to find creative ways to bridge the gap. As soon as we step outside farmers’ markets
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On a more serious note, Matt also writes a Sol to Seed Farm blog. In a recent post simply titled, A Farmer’s Perspective, he shared, “While academia, NGOs, non-profits, et al debate whether Organic or GMO will ‘feed the world,’ the farmers and ranchers producing that food must cope with the reality of economic viability on a daily basis. If you believe that organic prices are too high, you don’t understand the economics of farming. And if you believe that ‘conventional’ or non-organic food production is not as valuable, you don’t understand the economics of an industrial food system.”
Finding balance Matt and Deanna love to farm, but they also plan to keep their off-farm jobs. It’s tough to deny a living wage with 401K plans and health insurance. So, the Tregonings are finding balance in their lives outside the bustling city with their hands in the dirt. They’ve vowed to keep their workweek to 13 hours a day. “Living on the farm is a good balance,” says Deanna. “It’s not as stressful as my nursing job. As a health care provider, my role is to take care of people. Clinical medicine is so expensive and you don’t see many healthy people at a clinic. Our farm is all about providing nutritious food to get people on the right track towards healthy living. At the end of the day, that’s what matters most. When you buy from the farm it’s like getting a prescription for healthy, nutritious food.”
New Seasons Market Three families and 50 friends got together 15 years ago to open a local grocery store in Portland. They envisioned a friendly, fun, neighborly store that would support local farmers and ranchers. From the freshest produce and quality meat, to a curated selection of cheeses and chips, the store would offer products from smaller producers and food artisans in the Pacific Northwest. Today, New Seasons Market has 15 stores and 3,000 employees in the greater Portland/ Vancouver area. Each New Seasons Market is designed and named after the neighborhoods they serve, like Happy Valley, Fisher’s Landing and Woodstock (soon at the corner of Woodstock and 45th). New Seasons carries everything from the essentials to the extraordinary based on the neighborhoods they serve and the relationships they cultivate with ranchers, farmers and vendors. Many of their products are organic or naturally grown, but they offer conventional products too. We asked the team at New Seasons Market about the local foods movement and their role in the regional food system. Their approach and philosophy may surprise you. New Seasons is all about building partnerships with local farmers and ranchers. Their ultimate goal is to help these producers grow and be sustainable long term. They’re less
concerned about big corporate profits and more concerned about helping producers capture premium prices for the wholesome food they produce.
Producer partnerships “We want a true, authentic partnership,” says Alan Hummel, Meat and Seafood Director. “Our customers have certain standards and small producers may not always understand that. Our job is to help educate and bring our partners along without threatening the confidence consumers have in us. Sometimes there’s not a lot of consistency at first. Small meat producers may not be able to grade out each animal. They only have so many to sell. So, we may get a small pork chop here and a big one there. But over time, we can work with these partners to produce a more consistent product without putting a lot of Alan Hummel, New Seasons Market burden on them.” New Seasons offers system pricing on their meat. Instead of basing meat prices on the cattle market, like most grocery stores, New Seasons will lock in a price for a certain period
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of time. This gives producers time to produce a high quality product using sustainable practices important to New Seasons’ customers. Producers can also plan out fiscally every year without being at the mercy of the market. It’s truly a partnership. “We’ll watch the market and have conversations with our partners,” says Alan. “Can we adjust prices down to be a little more competitive once their volume has increased? Or, do we keep prices consistent? Our pricing programs are typically a little above market and don’t fluctuate a lot. We have the same philosophy with our smaller fishermen. If they’ll catch a certain way, handle a certain way and deliver premium quality products we can offer above market prices to meet our customers’ standards.”
Choosing like-minded partners The produce market is rapidly changing and the number of local producers is increasing. More people are growing vegetable gardens and looking for ways to get into farming. Jeff Fairchild, Produce Merchandising Director, spends time talking to growers about the types of fruits and vegetables he’s looking for. He visits farmers’ markets to source products that will increase New Seasons’ selection. At any one time, 70 percent of New Seasons’ produce is locally grown in the Pacific Northwest. Choosing like-minded partners is the key. Jeff Fairchild, New Seasons Market
“First, quality is absolutely critical to what we do – taste, freshness, value,” says Jeff. “Organic is important too. Then we look for partners who are using sustainable practices. Are they taking care of the land? Are they being socially responsible? How do they treat their labor? Last week we met with a group of potato growers who are planting in wetland bogs. They’re enhancing the wetlands, increasing fertility and decreasing pests. These are the stories we’re looking for. Our customers want to know the grower who raised their produce and why we’re buying from them. That’s the value we bring.”
Supporting Home Grown, local brands If the grocery aisles could sing, you’d hear a chorus of a thousand stories sung at New Seasons Market. There’s Tyler Long, a young Albacore fisherman in Charleston, Ore. You’ll find his name proudly displayed on the package. There’s Jacobson Sea Salt (harvested on the Oregon coast) who is teaming up with Bee Local Honey and Quin Candy to offer sweet, salty treats. You’ll hear from Lucy De Leon, whose family migrated across the country working in agriculture before they opened a small restaurant in Portland. Today the De Leons are bringing their popular salsas to the retail market with a little help from New Seasons Market. “Bring Your Recipe to Market” is a program offered by the Food Innovation Center at Oregon State University in partnership with New Seasons. Local food artisans bring in their ideas. Some have made it to packaging. Others are just in the concept stage. During the 12-week program they learn about food safety, compliance, ingredient labels and packing. Some may team up with a local producer for ingredients during the process. In the end, if they’re successful, their products will be introduced in New Seasons Market. “We want to work with local producers and artisans who have a great idea and a passion for wholesome food,” says Chris Tjersland, Private Brand and Development Manager. “We’re here to nurture these businesses and help them grow. We may offer their products in one store or all 15 stores, depending on their capacity. We talk a lot about balancing passion with managed growth. There’s no race to the finish line here. Our goal at New Seasons Market is to cultivate good food for generations to come.” Chris Tjersland, New Seasons Market
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John Wilson, Beef Northwest Feeders
Country Natural Beef The story of Country Natural Beef is epic. Ranchers Doc and Connie Hatfield knew there had to be a better way to bring naturally raised beef to consumers. In 1984 they formed a consumer-driven cooperative with 14 like-minded ranching families in eastern Oregon. They planned to focus their sales efforts in the Portland/Salem market. The small venture didn’t require a lot of money back then. Good thing, because these ranching families were strapped. Each member chipped in a few good calves to get the effort started. Today, the Country Natural Beef co-op represents nearly 100 family ranches from Washington to Texas and the Hawaiian Islands. The co-op is 100 percent owned by ranching families who retain ownership of their animals from birth to plate. John Wilson’s family has been raising cattle in Oregon since the 1800s. After graduating from the University of Oregon, he and his first cousin Jim Wilson, another fifth-generation rancher, formed Beef Northwest Feeders. The Hatfields approached them in 1996. Cattle raised for Country Natural Beef spend their first 14 to 18 months on pasture and rangeland. But, to ensure a consistent, year-round supply with limited resources, they needed someone to feed their cattle for the last 100 days. At the time, the small, naturally raised beef co-op was only processing 40 head of cattle per week. “We liked the cooperative nature of Oregon Natural Beef, now called Country Natural Beef,” says John. “We shared their vision for creating a brand that would pass additional
revenue back to family ranches for long-term, generational sustainability. We also shared their commitment to caring for the land, water and wildlife habitat, with wide open spaces for ranchers and farmers.”
Growing alliances The alliance between Country Natural Beef and Beef Northwest continues today, though on a much larger scale. Country Natural Beef will process 50,000 head this year. Beef Northwest is now a diversified agribusiness with three cattle feeding operations, two in Oregon and one in central Washington. They’re one of the Northwest’s largest suppliers of cattle to Tyson Foods in Wallula, Wash. and naturally raised cattle to AB Foods in Toppenish, Wash. “The markets we’ve helped Country Natural Beef reach have been consumer driven,” says John. Everything goes back to the consumer. There’s a certain type of consumer who will spend more for local or grass fed beef. They can afford to spend the extra money. But, it would be very difficult to feed the world this way. With Country Natural Beef we’re trying to build partnerships between smaller ranchers and larger cattle feeders and packers to increase volume and make these products more affordable to consumers who want them.”
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Consumer preferences Country Natural Beef cattle are fed a healthy ration of grain, alfalfa and potatoes after being raised on grass. Beef Northwest uses by-products from regional potato processing plants, including cooked peelings, excess trim and french fries that miss certain specifications. Potatoes and other natural proteins provide a 100 percent vegetarian diet sought by Country Natural Beef consumers. Consumer preferences for naturally raised beef have changed. From the original attributes of hormone and antibiotic free, standards have morphed to include environmental audits, animal welfare audits and even a small non-GMO feeding line for beef. To be successful in this niche market, producers must weigh the hidden costs. “From our viewpoint, a producer going into this type of business has to do enough due diligence to identify the additional costs,” says John. “We’ve seen a lot of businesses in the protein sector fail because they didn’t recognize all the standards they’re required to meet. Doing an in-depth cost analysis of all the input factors is critical.”
Ranchers offer samples of Country Natural Beef
Embracing change Country Natural Beef producers embrace their loyal customers and prospects. You’ll find these hard-working ranchers in urban grocery stores, like New Seasons Market, multiple times a year. They’ll be cooking samples and listening to customer feedback. They’re likely to share stories about life on the ranch and the rural communities they live in. More than anyone, this consumer wants to make the personal connection. They also want to know exactly how their food is raised and to what standards. 9 | Nor thwest Farm Credit Ser vices
Sometimes niche markets can be fickle. What’s selling today may have a completely different market demand two years from now. It can be frustrating for people in production agriculture both strategically and philosophically. Some would argue that animal welfare audits or non-GMO threaten the beef industry. With certain consumers there’s no reaching status quo. “Our job is to respond to consumer demands, even if these demands don’t represent all consumers in the market, says John. That’s why Beef Northwest formed an alliance with Country Natural Beef. We believe in joint ventures. We’re better at addressing the opportunities and challenges when we work together. Our experience with Country Natural Beef cattle that receive no antibiotics has raised our level of animal husbandry company-wide. We like to put our assets with other like-minded people to build a better product and find a better way. Over the years, this has been the key to our mutual success.”
Financing The Next Generation with AgVision Helping young, beginning and small producers get started in business ensures a solid future for agriculture and rural communities. Our AgVision program is specifically designed to help these producers who may have difficulty finding financing. AgVision offers financing at competitive rates with loan fee reductions plus education, technology wavers and business management education. If you’re 35 or younger, or if you’ve been farming for 10 years or less, the AgVision program is designed for you. Perhaps you’re a parent with sons or daughters who want to return to the operation. The AgVision program will help them establish credit and gain their independence. Northwest FCS AgVision customer Stuart Schuttpelz
AgVision Program Benefits All loan types and sizes. Producers can finance real estate including loans to acquire a farm, ranch, timberland or additional acreage. AgVision financing also includes operating expenses, livestock and equipment purchases, or can be used to refinance existing debt. Less restrictive underwriting standards. Because of age, early stage of business, or operation size, many producers do not have adequate capital and/or equity to secure competitive financing. Customers who may not qualify under normal loan programs may qualify under AgVision standards. Preferred rates and flexible terms. All qualifying loans receive preferred rates and/or flexible terms. Reduced or waived fees. While each customer and loan is unique, many AgVision customers qualify for a reduction in loan origination and appraisal fees.
If you’re 35 or younger, or if you’ve
Funds for management development and business tools. Through the AgVision program producers also receive funds to improve their management skills. At the time of the loan, customers are given three $500 vouchers to use towards continuing education, Northwest FCS Business Management Center programs, and technology tools like computers or software. Business management training. Educational programs include the annual Young and Beginning Producers Conference and financial and management workshops. These programs help AgVision customers increase their knowledge and build relationships with other producers. One-on-one mentoring. Northwest FCS credit officers work closely with AgVision customers, helping them analyze their income and expenses as they make decisions for the future.
been farming for 10 years or less, the
Talk to a Northwest FCS representative today to learn more about the benefits of our AgVision program.
AgVision program is designed for you. yields Fall 2014
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Business Management Center Events Northwest Farm Credit Services is committed to sharing industry knowledge and management lessons to help our customers make sound business decisions. We’ve invested in educational programs, industry insights and business tools to help customers enhance their management skills and support the transfer of leadership and management to the next generation.
Dates/Locations
Conferences, Workshops and Symposiums
Nov. 18-19, 2014
Basic Financial Workshops
Twin Falls, Idaho
Understanding financial statements and analysis.
Nov. 19, 2014
Tree Fruit Producer Symposium
Wenatchee, Wash.
Trends in the fresh produce business and orchard values.
Nov. 19-20, 2014
Advanced Financial Workshops
Mt. Vernon, Wash.
Managing growth and capital, profits, cash and risk.
Nov. 20, 2014
Tree Fruit Producer Symposium
Hood River, Ore.
Trends in the fresh produce business and orchard values.
Dec. 2, 2014
Global Influences, Local Impacts Symposium
Twin Falls, Idaho
Breaking down complex global issues with insights for local producers.
Dec. 2-3, 2014
Basic Financial Workshops
Mt. Vernon, Wash.
Understanding financial statements and analysis.
Dec. 3-4, 2014
Advanced Financial Workshops
Prosser, Wash.
Managing growth and capital, profits, cash and risk.
Dec. 12, 2014
Dairy Symposium
Kennewick, Wash.
What dairies need to know about markets and risks.
Jan. 6-7, 2015
Basic Financial Workshops
Prosser, Wash.
Understanding financial statements and analysis.
Jan. 7-8, 2015
Advanced Financial Workshops
Idaho Falls, Idaho
Managing growth and capital, profits, cash and risk.
Sept. 24-25, 2015
Basic Financial Workshops
Salem, Ore.
Understanding financial statements and analysis.
Featured Programs Jan. 15-17, 2015
Family Business Succession Seminar
Portland, Ore.
Transitioning ownership and management to the next generation.
Feb. 10-12, 2015
Young and Beginning Producers Conference
Spokane, Wash.
Market trends, personal finance and family business basics.
Feb. 11-13, 2015
Executive Producers Summit
Spokane, Wash.
Managing risk through the cycles.
Find out more about BMC programs: northwestfcs.com/resources Questions? Call: 866.552.9193 Email: bmc@northwestfcs.com 11 | Nor thwest Farm Credit Ser vices
College Scholarships Application Deadline March 1st Northwest FCS promotes youth education through our college scholarship program. Scholarships are awarded annually to high school seniors, current college students and those pursuing graduate degrees. All scholarships are $2,000 each.
Customer Undergraduate Scholarships – awarded to sons and daughters of Northwest FCS customers and employees. High school seniors and current college students will be selected based on school and community involvement, scholastic performance and educational goals.
Customer Graduate Scholarships - awarded to sons and daughters of Northwest FCS customers and employees. Graduate students will be selected based on their scholastic performance and post graduate career goals.
Land Grant University Scholarships – awarded to full-time undergraduate students seeking a degree in agriculture, finance, business or related fields at Northwest land grant universities. Students must demonstrate a commitment to agriculture, leadership and academic achievement.
Minority Scholarships – awarded to minority students studying agriculture, finance or business who have a passion for helping others overcome bias and recognize different beliefs and values. Recipients are involved in activities or committees that foster an environment where all have the opportunity to participate.
Visit northwestfcs.com/scholarships for eligibility, selection criteria and more information. Application deadline: March 1, 2015. Winners announced May 2015. yields Fall 2014
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Executive Producers Summit: Managing Through the Cycles Feb. 11-13, 2015 - Spokane, Washington Overview In today’s markets, managing volatility is one of the biggest challenges facing many agricultural businesses. National experts help you identify, prioritize and mitigate risks facing your operation, delivering practical tools and unique perspectives on successfully managing through the cycles.
Featured Speakers and Key Takeaways Ag Trends and Economics that Matter – Dr. Dave Kohl Understand the ‘Mega Trends’ influencing the future of global agriculture and what you need to know to stay ahead of the cycle. Focus on economic insights that affect your bottom line and the decisions you make every day. Strategic Risk Management – Dr. Steven Slezak Learn to apply strategic risk assessment frameworks and identify new dimensions of risk in your business. Take home tools to develop a comprehensive risk management plan. Ag Cycle Drivers and Outlook – Dr. Richard Volpe Understand the demographic and economic trends driving agricultural cycles, with a focus on current and future trends in consumer demand and food markets. Managing Weather Risk – Dr. Eric Snodgrass Learn simple weather forecasting techniques and get the 2015 forecast. Also gain insights on how climate change may impact agriculture over the next 50 years. Economic Outlook and Interest Rate Forecast – Dr. Ed Seifried Focus on key indicators and applied information to make smart, informed decisions and learn the latest Wall Street economic trends affecting the future of your business.
Family Business Succession Seminar Jan. 15-17, 2015 - Portland, Oregon Overview This interactive program covers strategies and proven processes to help families transition ownership and management from one generation to the next. Featured experts include Dr. Don Jonovic who brings more than 40 years’ experience working with family businesses in transition and Rich Thornton, former IRS Revenue Agent and 30-year tax partner for Moss Adams LLP.
Key Takeaways Strengthen Relationships and Build a Plan - The succession process can strain family relationships. Learn effective ways to communicate and address conflict to ensure relationships remain strong, balancing individual, family and business needs. Build enduring succession plans that balance business and family success. Financial and Legal Considerations - Understand the financial requirements and potential pitfalls surrounding succession, including retirement funding, business cash flow and family growth. Learn legal considerations and best practices for succession and estate plans, including options for funding and structuring buy-sell agreements. Tax Planning and Entity Structure - Learn estate tax planning best practices and avoid common mistakes to ensure your plan minimizes taxes without surprise tax bills or unintended consequences.
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Local Foods Hit the Big Time Gary Matteson VP Young, Beginning, Small Farmer Programs and Outreach Farm Credit Council
Production and sale of local foods has been a marketing
there a prescription that a food hub has to be a for-profit
phenomenon for years. Consumers have gotten
business. This allows the definition to include non-profit
accustomed to buying local foods at farmers’ markets,
entities or farmer cooperatives for that matter. One notable
farm stands and by subscribing to Community Supported
characteristic that distinguishes a food hub from a produce
Agriculture farms (CSAs).
wholesaler is the mission intent expressed; that a food hub has a sense of purpose to strength-
A substantial part of the value of local foods is the “story” that goes along with the food items—that extra information about where the
USDA defines a Food
access to markets. Also, a food hub
Hub as “a business or
farming practices may have been used. All that information makes the farm product unique, which makes for a higher price.
Food Hub Systems Increased consumer demand creates the expectation for more local food in more places, like restaurants, grocery stores and even schools. As local food production systems have matured there has been an
sources food locally and regionally,
organization that actively
along with the story of the farm,
manages the aggregation,
methods. The story always stays
food comes from, how it’s grown and what special organic or sustainable
en producer capacity and increase
distribution, and marketing of source-identified
producer or even the production with the product. The Farm Credit System is interested in how food hubs provide more
food products primarily
opportunities for farmers to sell
from local and regional
their products. Farm Credit institu-
producers to strengthen
importance of local foods as a mar-
their ability to satisfy
keting channel for farm producers,
wholesale, retail and
direct-to-retail farmers markets,
institutional demand.”
expansion towards wholesale
tions have noted the increasing
amplifying their presence beyond farm stands, or CSAs. Beyond providing more market access for farmers, it is evident that food hubs
markets in addition to continued increase in direct-to-
are effective in establishing a broader relationship between
retail sales. Food Hubs can be seen as a local food system
a community and the agricultural producers that feed it.
solution for aggregating and distributing local foods.
This is good for farmers, consumers, communities, and the future of agriculture.
The working definition of a food hub is quite broad in scope. There are no minimum or maximum sizes. Nor is
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Understanding Food Hubs Understanding how the local foods market sector works is
Food Hub Facts
important not just to farmers and food hub operators, but
• Approximately 222 regional food hubs operate in the
also to lenders like Farm Credit who need to understand where the risks are for the individual farmer, for each business function in the value chain, and for the sector as
United States. • Food hubs averaged more than $3 million in 2012 revenue.
a whole. We expect that consumer driven demand for local foods will continue to grow in economic significance for farmers and in cultural significance to communities that will also benefit farmers.
• 62 percent of food hubs surveyed in 2013 started up within the last five years. • Half of food hubs are for-profit enterprises. • Food hubs are profitable; more than half operate
One way for Farm Credit to estimate the potential of
independently of grant funding.
food hubs is to do a benchmarking study. A typical Source: “Findings of the 2013 National Food Hub Survey,” Michigan State University.
benchmarking study collects actual financial results, as well as operational measures such as how many miles were driven by delivery trucks, or how many people were employed. This information is compared to similar
53 percent of respondents were organized as a not-for-
businesses and then analyzed to determine a range of
profit business and employed an average of five employees.
performance. So the typical benchmarking study process is:
Grocery stores and restaurants accounted for 65 percent of
collect-compare-analyze.
sales by food hubs—showing that local foods are moving into wholesale distribution.
Benchmarking Studies The value of benchmarking rests in its ability to give the big picture of the sector being studied, as well as very detailed information about how each food hub business might be
The hope is that additional studies on the Food Hub industry will not only provide very valuable information to food hub managers, but will be a tool to utilize when such businesses are searching for financial assistance or a loan.
able to improve financial and operational performance. A benchmarking study allows business planning to Farm Credit’s Food Hub Benchmarking Study for the year 2013 shows that our sample of 49 food hubs across the country average $1.65 million in sales, source their local products within 500 miles and about 20 percent sell only organic products.
compare to actual, real results from the industry and pinpoint how any particular food hub compares to its peers. Food hub operators, local foods consumers, and Farm Credit will all benefit from a better understanding of the nature of how the market for local foods can expand through wholesale channels.
Across Market Segments Nationally, 33 percent of hubs are farm-to-business operations bringing local food differentiation into wholesale supply chains serving grocery and food service markets. Another 28 percent are hybrid food hubs, supplying wholesale as well as farm-to-consumer markets, such as direct delivery to large-scale corporate wellness programs.
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Protecting Your Security When You Travel The year-end holiday season and travel are a package deal in America. For an estimated 100 million Americans, the holidays include a trip at least 50 miles from home. Whether you’re traveling cross country or around the globe, don’t let your guard down because criminals are hoping you will. Personal electronic devices are a prime target for cyber-criminals. Before departing on your trip, ensure all personal electronic devices have been secured with a password. Remove all sensitive data from your device, delete browser history, cookies and stored passwords and always make sure the device is locked after use. Carry the device with you or leave it with a trustworthy family member or friend if you need to step away. It only takes seconds for a criminal to pick up your device, attack and infiltrate your confidential information. A quick trip to the food court could result in compromised passwords, credit card numbers, bank account numbers, etc. Additionally, always be aware of your surroundings while using devices in public places. A common practice used by criminals is shoulder surfing. Shoulder surfing is where a seemingly harmless person observes your information while you are using your device. Without noticing, the shoulder surfer can steal a great deal of information without touching your device. Always be aware of the people around you as well as what is being displayed on your device. If the information is personal or confidential make sure you view it in a secure environment with no possibility of shoulder surfing. Free wireless Internet hot-spots are always in demand when traveling. Connecting to a wireless hot-spot is a great way to burn layover time or finish that last minute gift shopping. It’s important to remember that public/free wireless hot-spots are not secure networks. Connecting to these hot-spots makes your device susceptible to malware and cyber-criminals that can capture your confidential information. In order to minimize these risks, purchase a Virtual Private Network (VPN) app or use your cellular 3G/4G connection on your device instead of public Wi-Fi when possible. The year-end holiday season should be a joyous time spent visiting and cherishing friends and family. Avoid the Scrooge effect criminals can cause by using security best practices when traveling.
10 Traveling Security Tips • Before traveling, securely backup your device and keep the backup in a safe place. • Only take the electronic devices needed. Leave the rest at home. • Be careful about how much you post on social media about being away. • Always set a password on every device and change it every few months. • Always lock all devices when not in use. • Always log out of websites after use and close the browser. • Always keep anti-virus software updated on your devices. • Use a credit card over a debit card. • When shopping online, ensure the website URL starts with HTTPS. • Check your accounts regularly for any unauthorized transactions.
17 | Nor thwest Farm Credit Ser vices
local
advisors and locations
IDAHO Robert Ball Jeff Bartschi Cody Bingham Jeff Blanksma, Jr. Adrian Boer Ray Carlson Connie Christensen Cade Crapo Ron Elkin Carl Ellsworth Bruce Foster David Funk LeRoy Funk Brent Griffin Jackie Hillman Brian Huettig Ken Koompin Brent Lott Karen Lustig Marty Lux Dan Mader Ray Matsuura Kyle Meyer Ron Mio Greg Moss Kirk Nickerson Lisa Patterson Greg Payne Erick Peterson Royce Schwenkfelder Kirt Schwieder Scott Searle Todd Simmons Robert Swainston Ryan Telford Bernie Teunissen Dale Thomas Camellia Thurgood Justin Tindall Ritchey Toevs Steven Toone James Udy Todd Webb Shane Webster Pete Wittman Matt Wolff
MONTANA Hamer Montpelier Jerome Hammett Jerome Blackfoot Blackfoot St. Anthony Buhl Leadore Aberdeen Hansen Burley Rupert Hamer Hazelton American Falls Idaho Falls Cottonwood Nezperce Genesee Blackfoot Rathdrum Fruitland Ketchum Howe Heyburn Caldwell Moscow Cambridge Idaho Falls Shelley Terreton Preston Richfield Caldwell Gooding Nampa Bruneau Aberdeen Grace American Falls Declo Rexburg Lapwai Boise
73 Fort Hall Avenue, Suite A American Falls, Idaho 83211 (208) 226-1340 370 North Meridian Street, Suite A Blackfoot, Idaho 83221 (208) 782-3800 1408 Pomerelle Avenue, Suite B Burley, Idaho 83318 (208) 678-6650
Les Arthun David Bell Bill Bergin Mark Bergstrom Adam Billmayer Bart Bitz Ryan Bogar Keven Bradley Sandy Carey Tom Cheetham Calvin Danreuther Nels DeBruycker Vicki Eggebrecht Warren Flynn Conni French Joe Fretheim Scott Glasscock Beth Granger Greg Grove Chad Hansen Craig Henke Courtney Herzog Dale Hirsch Craig Iverson Alan Klempel Steve Lackman Tim Lake Bryan Mussard Corie Mydland Ken Olson Tracey Pearce Robert Peterson Trudi Peterson Shawn Rettig Dave Sattoriva Nancy Schlepp Kim Skinner Carmie Steffes Steve Swank Kurt Swanson Duane Talcott Dale Tarum Bob Taylor Kelly Toavs Mark Tombre Miles Torske Brian Tutvedt Larry Tveit, Jr. Bruce Udelhoven Mike Wallewein Steve Wood
P.O. Box 2515, 1700 S. Assembly St. Spokane, Washington 99220-2515 509.340.5300 | northwestfcs.com
OREGON Wilsall Great Falls Melstone Brady Hogeland Big Sandy Vida Cut Bank Boulder Redstone Loma Choteau Malta Townsend Malta Shelby Angela Great Falls Moccasin Dillon Chester Rapelje Kinsey Winnett Bloomfield Forsyth Polson Dillon Joliet Richey Sheridan Hobson Judith Gap Rudyard Hingham Ringling Hall Plevna Chinook Valier Hammond Richland Denton Wolf Point Savage Hardin Kalispell Fairview Winifred Conrad Sheridan
Tech Plaza, Building 1, Suite 300 3490 Gabel Road Billings, Montana 59102 (406) 651-1670
501 King Street Cottonwood, Idaho 83522 (208) 962-2280
1001 West Oak Street Farm Credit Building, Suite 200 Bozeman, Montana 59715 (406) 556-7300
2225 West Broadway, Suite A Idaho Falls, Idaho 83402 (208) 552-2300
519 South Main Street Conrad, Montana 59425 (406) 278-4600
2631 Nez Perce Drive, Suite 201 Lewiston, Idaho 83501 (208) 799-4800
134 East Reeder Street Dillon, Montana 59725 (406) 683-1200
16034 Equine Drive Nampa, Idaho 83687 (208) 468-1600
501 1st Avenue South Glasgow, Montana 59230 (406) 228-3900
102 North State, Suite 2 Preston, Idaho 83263 (208) 852-2145
700 River Drive South Great Falls, Montana 59405 (406) 268-2200
1036 Erikson Drive Rexburg, Idaho 83440 (208) 656-2100
1705 US Highway 2 Northwest, Suite A Havre, Montana 59501 (406) 265-7878
815 North College Road Twin Falls, Idaho 83301 (208) 732-1000
120 Wunderlin Street, Suite 6 Lewistown, Montana 59457 (406) 538-7737 502 South Haynes Avenue Miles City, Montana 59301 (406) 233-3100
Headquarters
Monet Allen Reed Anderson Roben Arnoldus Glenn Barrett John Boyer Greg Brink Ron Brown George Bussmann Warren Chamberlain Jason Chapman Tim Dahle Dan Dawson Mike DeWall Susan Doverspike Rod Fessler Tom Fessler Joe Finegan Bruce Ford Javier Goirigolzarri Dennis Harmon Matt Insko Kenneth Jensen Kyle Kenagy Jeremy Kennel Alan Keudell Diane Kunkel Leland Lage Dan C. Lewis Sharon Livingston Bill Martin Scott McClaran Ron Meyer Greg Myers David Neal Mary Olson Larry Parker Alan Parks Amy Doerfler Phelan John Reerslev Stephen Roth Shannon Rust Marc Staunton Anna Sullivan Steve Walker Eric White
WASHINGTON Montague, CA Brownsville Cove Bonanza Haines Joseph Milton-Freewater Sixes Vale Klamath Falls The Dalles Roseburg Harrisburg Burns Madras Mt. Angel Cornelius Hermiston Roseburg Grants Pass LaGrande Vale Roseburg Monmouth Aumsville Portland Hood River Gaston Mt. Vernon Rufus Joseph Talent Tillamook Tangent Monmouth Helix Silver Lake Aumsville Junction City Brothers Echo Merrill Hereford Stanfield Nyssa
3370 10th Street, Suite B Baker City, Oregon 97814 (541) 524-2920 2345 Northwest Amberbrook Drive, Suite 100 Beaverton, Oregon 97006 (503) 844-7920 650 East Pine Street, Suite 106A Central Point, Oregon 97502 (541) 665-6100 2911 Tennyson Avenue, Suite 301 Eugene, Oregon 97408 (541) 685-6140 300 Klamath Avenue, Suite 200 Klamath Falls, Oregon 97601 (541) 850-7500 308 Southeast 10th Street Ontario, Oregon 97914 (541) 823-2660 12 Southwest Nye Avenue Pendleton, Oregon 97801 (541) 278-3300 3113 South Highway 97, Suite 100 Redmond, Oregon 97756 (541) 504-3500 2222 Northwest Kline Street Roseburg, Oregon 97471 (541) 464-6700 650 Hawthorne Ave. S.E., Suite 210 Salem, Oregon 97301 (503) 373-3000 3591 Klindt Drive, Suite 110 The Dalles, Oregon 97058 (541) 298-3400
Dave Allan Jeff Bosma Russ Byerley Roger Canfield Bill Clark Mike Cobb Bill denHoed Richard DeRuwe Frank DeVries Scott Eschbach Patrick Escure Kevin Filbrun Steve Fish Stacy Gilmore Alan Groff Lori Hayles Ian Jefferds Jim Kile Cris Kincaid Jim Klaustermeyer, Jr. Dave Klaveano Tristan Klesick Chris Kontos Steve Krupke David Lange Josh Lawrence Poppie Mantone Dan McKay Alan Mesman John Miller Pat Murphy Brian O’Leary Eric Olson Jeff Raap Sara Rolfs Jason Salvo Derek Schafer Jeff Schilter Danielle Scrupps Ben Smith Jerry Smith Jim Stone Lori Stonecipher Mark Tudor Jake Wardenaar Andy Werkhoven
Wapato Outlook Touchet Olympia Chelan Ephrata Grandview Dayton Lynden Yakima Quincy Pasco Sitka, AK Pasco Wenatchee Pasco Coupeville St. John Pullman Othello Pomeroy Stanwood Walla Walla Reardan Colfax Royal City Bingen Almira Mt. Vernon Toledo Chehalis Seattle Anchorage, AK Ellensburg Wenatchee Seattle Ritzville Olympia Ritzville Sequim Benton City Lakewood Walla Walla Grandview Royal City Monroe
265 East George Hopper Road Burlington, Washington 98233 (360) 707-2353 629 South Market Boulevard Chehalis, Washington 98532 (360) 767-1100 224 North Main Street Colfax, Washington 99111 (509) 397-2840 1501 East Yonezawa Boulevard Moses Lake, Washington 98837 (509) 764-2700 9530 Bedford Street Pasco, Washington 99301 (509) 542-3720 2157 North Northlake Way, Suite 120 Seattle, Washington 98103 (206) 691-2000 1515 South Technology Boulevard, Suite B Spokane, Washington 99224 (509) 340-5600 2735 Allen Road Sunnyside, Washington 98944 (509) 836-3080 1 West Pine Street Walla Walla, Washington 99362 (509) 525-2400 667 Grant Road, Suite 1 East Wenatchee, Washington 98802 (509) 665-2160 1360 North 16th Avenue Yakima, Washington 98902 (509) 225-3200
3021 Palmer Street, Suite B Missoula, Montana 59808 (406) 532-4900 123 North Central Avenue Sidney, Montana 59270 (406) 433-3920
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P.O. Box 2515 Spokane, Washington 99220-2515 New address? Please notify your local Northwest FCS office.
OUR
CLASSROOM COVERS FIVE STATES
Northwest FCS Vice President Michael Stolp presenting at a customer seminar
Northwest Farm Credit Services employees live and breathe agriculture. We’re immersed in the industries we serve and work hard to stay on top of changes. Fact is, though, ag is so dynamic, the education never stops. We closely monitor the latest industry trends and are eager to share our insights, through customer seminars, workshops, and a variety of online tools. Visit northwestfcs.com/resources to learn more.
This institution is an equal opportunity provider and employer.