HARVEST 2023 Magazine

A letter from the CEO

Greetings,

Collaboration is a key to success for any team, business, or organization. Individually, we all have special skill sets that can carry us so far. When we come together to combine our goals and talents, we can take our efforts and success to another level.

A cooperative like AgCountry relies heavily on collaboration. With the specialized products and services we offer, it is important to have a team who understands agriculture and shares a passion for serving the needs of rural America. Beyond our immediate team, we

work closely with other Farm Credit organizations and financial service providers to offer greater opportunities for member-owners.

A common goal or belief system is necessary in any collaborative success. Henry Ford once said, “If everyone is moving forward together, then success takes care of itself.” A team can have all the talent but still falter or underachieve without buy-in. We are blessed to have a team of over 700 employees who care deeply about our member-owners and the needs of the communities we serve.

Collaboration also takes action and communication. At AgCountry, this comes in different forms. I commonly talk about our patronage program as an example of how we fulfill our commitment as a cooperative. Eligible memberowners have received an annual patronage dividend from AgCountry since 2014. For the last four years, that dividend has been 1%.

A common question we receive when discussing patronage involves interest rates. Our philosophy is “take only what we need, keep only what we must, and return the rest.” As a Farm Credit association, we are not a depository like other lenders. We rely on our equity and bond sales through the Farm Credit Funding Corporation to provide the financial resources you need.

When we lend money, there is a difference between what you are charged and what we must pay for our bonds. This is what we refer to as our spread. As the Federal Reserve has raised interest rates, we have used our strong financial position to compress our spread to absorb some rate hikes over the last few years.

We want to place our memberowners in a position of strength. Although interest rates have risen, we offer a rate conversion feature that will allow you to convert your loan to a lower interest rate when they begin to fall. Please contact your loan officer to see how this feature can work for you.

Everything we accomplish at AgCountry is done collaboratively. Our success relies on relationships with our member-owners, team members, fellow Farm Credit organizations, and investors. We will continue to work with and for you.

Thank you for your continued business.

Sincerely,

Marc Knisely, President & CEO 701-499-2559

Marc.Knisely@AgCountry.com

Congratulations to the Newly Elected and Re-Elected Board Members

Four positions on the AgCountry Board of Directors were elected by shareholders in August. When voting closed, votes were counted by an independent tabulator. Congratulations to the following candidates, each of whom was elected to a four-year term:

AgCountry Farm Credit Services’ Board of Directors is currently comprised of 18 shareholder-elected directors and two outside apppointed directors. A full listing of all Board Members and contact information can be found at AgCountry.com/BoardMembers.

Mike Zenker, Leif Aakre, Lynn Pietig, and Ryan Klussendorf

Mike Zenker Area 1

Leif Aakre Area 2

Lynn Pietig Area 2

Ryan Klussendorf Area 3

October is Co-op Month!

AgCountry Celebrates Co-op Month with a Focus on Member-Owner Benefits

The 7 Principles of a Co-op

October is a time to celebrate all the benefits that cooperatives provide. The co-op model is distinctly different from other businesses. We pride ourselves at AgCountry by giving our member-owners a voice in decision-making and celebrating our success through our patronage program.

Within the Farm Credit System, three core principles serve as the foundation of our structure. They are:

• Engaging members as owners,

• Communicating with members, and

• Providing value-based benefits to members.

Business practices may change over time, but our commitment remains centered on our memberowners. With a member-elected board of directors, you can be sure that the decisions made for farmers will be made by farmers.

Thank you for being part of our co-op, where your success is our success!

Voluntary and Open Membership

Autonomy and Independence

Training and Information

Member Economic Participation

Cooperation Among Cooperatives

Democratic Member Control

Concern for Community

Farming Regeneratively Balancing Business with Improved Soil Health

Written by: Adam Ulbricht, Marketing PR Specialist

Driving past Ed Hegland’s farm in rural Lac qui Parle County, Minnesota, you will notice it looks different than his farming neighbors. Corn, soybeans, and wheat grow on his 1,800 acres, but you will also find a variety of other crops springing up within the same fields.

Since his start in 1992, Hegland has taken an alternative approach to raising crops. What is now labeled regenerative farming, or climate-smart agriculture, has long been practiced here in some form.

Today, Hegland incorporates cover crops into his normal crop rotations and practices no-till farming. A partnership with a local cattle producer occasionally brings livestock into the fold, satisfying an additional principle of soil health. As greater attention is shown to regenerative or

climate-smart agriculture, early adapters like Hegland demonstrate how conventional farms can introduce a new style of farming to their operation.

Starting Small

Hegland’s father planted the seeds of regenerative practices prior to Hegland taking over the family business. Hegland describes his father as “very conservation-minded” as an early adopter of the chisel plow while many were still utilizing the popular moldboard plow. The goal was to use a method of less intensive tillage on their soil.

In the late ’90s, they switched to a no-till approach for soybeans. In 2005, Hegland experimented with striptilling before fully utilizing the practice a few years later.

Hegland began experimenting with cover crops through his participation in the Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP), two United States Department of Agriculture (USDA) programs that help farmers and ranchers integrate and build on existing conservative farming practices. Varieties of millet, oats, radishes, vetch, peas, and rye have been used to provide cover at different times of the year.

Over the past three growing seasons, Hegland has been 100% no-till farming. At first, it took some getting used to. “My fields look a little tougher for the first four to eight weeks in the spring but come August they start catching up with the neighbors,” he says.

Hegland inspecting his bean crop.

With a cover crop in place, Hegland waits a little longer than the average conventional farmer for the temperature of his soil to heat up before planting his cash crop. No-till farming leaves more residue on the surface to protect against erosion and water loss, and to moderate soil temperature. This can cause the soil to warm more slowly in the spring than it would if left bare.

Seeing Results

Since switching, the financial savings have been apparent to his operation. Hegland recalls when he first transitioned to strip-till, his fuel provider stopped by the farm to ask if he had switched providers, after noticing Hegland’s usage had significantly decreased. “I didn’t,” chuckled Hegland. “I am just not using as much fuel.”

Differences were noted in the amount of applied fertilizer when strip-tilling was introduced. Using soil testing, Hegland focused application on areas requiring more nutrients, creating a more uniform yield across his acres despite the varying types of soil found on his farm.

Additional savings resulted from less equipment. The farm features a planter, combine, and sprayer. “I farm 1,800 acres with one tractor,” states Hegland.

Upon renewing a line of credit, an appraiser stopped to look at his operation. As the appraiser looked through his sheds, they asked, “Where is the rest of your equipment?” Pointing at his strip-till machine, Hegland informed the appraiser “it is all there”. The appraiser left the farm stunned.

One of the main tenets often associated with regenerative agriculture is improving soil health. On Hegland’s farm, one early observation that continues today is a lack of soil erosion after introducing strip-tilling and no-tilling. With a living cover established, Hegland retains more moisture and prevents exposed soil from washing or blowing away.

That is not the case for other farms around him. Speaking about his nearby area, Hegland states, “I see a lot of wind erosion in the winter. That is a lot of money that blows and washes off those fields.”

When asked why he believes more farmers do not practice strip-tilling or no-tilling, Hegland responded, “Tillage is fun. It smells great. It is nice to look back and see that black strip behind you, but I would argue it is not necessary.”

Despite initial uncertainty, increased yields have resulted since he began no-tilling into cover crops. Hegland believes the seed-to-soil contact and moisture savings play a big role in the improvements he’s witnessed.

Hegland is quick to point out farming is a business. For him, this farming method is a way he can achieve his financial goals. “I enjoy the soil health benefits of it greatly. It’s been fun to see the organic matter increase and the soil biology increase. But for me, my bottom line is the bottom line.”

Leftover residue from cover crops keeps the soil protected.

I farm 1,800 acres with one tractor.

Hegland’s yields are more consistent since adopting new practices.

One perk that cannot be quantified is the efficiency during the growing season and fall harvest, which leads to more family time. “Because of that reduced labor, I am able to go to baseball games and track meets in the spring, and football games and cross country meets in the fall.”

Advice For Getting Started

Always happy to share his experiences with people, he opens his farm to those who want to learn. “There is a lot of interest,” says Hegland, who regularly receives phone calls from interested parties.

After speaking with many people, Hegland notes the hardest part of making the switch or trying something new may be psychological.

“It takes a mindset shift. Many people are afraid to do something different. I am probably talked about in the coffee shop as being out there with these practices, but I am okay with that. Some people want to do what they are comfortable with, and this makes you uncomfortable.”

Like any style of farming, there are challenges. Hegland acknowledges he has not had any “large-scale negative experiences” so far, but does point to a few areas he found difficult.

A greater focus is being shown on regenerative agriculture from both the government and private businesses. Farmers and ranchers will soon see more resources available to climate-smart projects as the USDA announced a commitment of $3.1 billion in support. More funding could also be made available to EQIP and CSP in the next farm bill. Likewise, large companies like General Mills and Cargill are incentivizing farmers and ranchers to adopt new practices.

Additional planning is necessary to farm regeneratively. Beyond annual decisions on whether to plant corn, soybeans, or wheat, Hegland must determine which cover crops will yield the best results.

Much like muscle memory, it can be hard to make changes when you have been farming a certain way for much or all your life. Hegland encourages fellow farmers to try something different but start small.

“Do not be afraid to try something new. Do it on part of the field that is behind a grove that no one can see if you are nervous about that.”

Despite his success with regenerative farming, Hegland believes that every farmer needs to make decisions that are best for their operation. He emphasizes any participation in climate-smart programs should be voluntary.

For example, finding good information that is readily available was an early challenge for Hegland. “It is out there, but you have to dig for it.” One event that helped him was attending a national no-till conference, which connected him with information and more experienced fellow attendees.

“I think everyone should look at these practices. I am not going to preach to anyone or tell them what to do but looking at the results on my farm where I have a variety of soil types, I have proven it can work.”

It takes a mindset shift. Many people are afraid to do something different.

”

The sole tractor used on Hegland’s farm.

Protect Yourself from Liens When Purchasing Assets

Written by: The AgCountry Legal Department

Farming and ranching require you to periodically upgrade your equipment or purchase products for your operation. These transactions can take place between you and a business or you and another farmer or rancher. Issues can arise when farmers purchase equipment or farm products from another individual that are subject to liens.

If you do buy from another individual, here are steps you can take to protect yourself against purchasing an asset subject to a lien.

Liens can arise from multiple sources but can also be identified ahead of time. The most common are liens that lenders attach against borrowers’ property to secure debt. Other liens include supplier liens and landlord liens.

Generally, liens are perfected when a lender files a UCC financing statement with the Secretary of State (SOS) in Minnesota or North Dakota, or with the Department of Financial Institutions (DFI) in Wisconsin. The SOS or DFI creates a searchable list on their respective websites showing liens filed against their residents.

For a small fee, you can review the filing to determine which assets are attached to the lien. This is a great way to prevent a future issue. If you purchase a piece of

equipment, for example, subject to a lien, the lien remains on the equipment until the lienholder is paid. The fact that you paid the owner does not remove the lien.

If you identify a lien on a piece of equipment or a farm product, the lienholder can release the lien. Before the time of purchase, you will need a release of the collateral, evidenced by a termination statement.

For farm products—like grain, milk, cattle, bales, feed, silage, and the like—a separate, parallel filing called an Effective Financing Statement (EFS) in Minnesota and a Central Notification System notice (CNS) in North Dakota and must be filed.

In Minnesota and North Dakota, farm products are bought and sold free of any liens unless the lienholder has filed a CNS/EFS. Even if a CNS/EFS has been filed, a buyer may still take the farm products free of any lien if payment is made through a joint check to both the seller and all lienholders who have filed a CNS/EFS.

In Wisconsin, farm products are bought and sold free of any lien unless the lienholder gives the buyer direct notice of the lienholder’s interest in the farm product. For example, if an EFS is filed against cattle in Minnesota,

and a buyer makes the check solely to the seller and not the lienholder, the lienholder’s lien remains attached to the cattle even in possession of the buyer.

To protect yourself when purchasing farm products or other assets, particularly in private party transactions, please search the UCC records and CNS/EFS (if you are purchasing farm products in Minnesota and North Dakota) to determine if there are any liens against the

item to be purchased. If there are liens, contact the lienholder to obtain a release of the collateral before or at the time of purchase. If you are purchasing farm products, make the check jointly payable to the seller and all lienholders. This will prevent you from purchasing an asset subject to a lien or from paying for the item twice.

This article is for informational and educational purposes and is not legal advice. If you have any questions, please contact your legal counsel.

We work with young or beginning farmers and ranchers every day, providing the resources and capital they need to pursue their dreams.

s ta rting gate

January 1, 2024

Introducing the Corporate Transparency Act: Entity Registration Starting

Your cooperative is always looking out for your business. We are bringing this to your attention to ensure your operation’s bottom line is not affected by non-compliance with the new entity registration.

Written by: The AgCountry Legal Department

The Corporate Transparency Act (CTA), a part of the Anti-Money Laundering Act of 2020, was passed by Congress to combat money laundering, financing of terrorism, tax fraud, and other illegal activities in the United States. The CTA is going into effect on January 1, 2024, requiring corporations, limited liability companies, limited partnerships, limited liability partnerships, or a limited liability limited partnership created by filing a document with a Secretary of State or Department of Financial Institutions to register.

While there are exceptions—sole proprietorships, general partnerships, and trusts are generally not required to register and report—most exceptions will likely not apply to AgCountry member-owners.

When and How to Register Your Entity

Beginning January 1, 2024, entities must register and report certain

information to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) per the CTA. Companies created before January 1, 2024, will have one year (until January 1, 2025) to file an initial report, while reporting companies created or registered after January 1, 2024, will have 30 days after receiving notice of their creation or registration to file their initial reports.

Reports are to be filed electronically with FinCEN and will include information about the entity and certain owners of the entity.

Penalties for Noncompliance

There are significant penalties for noncompliance, which include failing to file or providing false information. Penalties include a civil penalty of up to $500 a day or a criminal fine of up to $10,000. Additional penalties include imprisonment for two years.

If a person unknowingly submits

incorrect information or needs to update a current filing, they must file a corrected report within 30 days of becoming aware of any inaccuracies or changes to their current filing.

Additionally, there is a 90-day safe harbor for inaccurate reports to be corrected if the person unknowingly submits inaccurate information, and files a corrected report within 30 days of becoming aware of the inaccuracies. If the corrected report is not submitted within 90 days of the incorrect submission, penalties may be assessed.

If you are unsure whether the CTA registration and reporting apply to you or have questions about the CTA, report timing, or the safe harbor, seek assistance from your legal counsel or trusted advisor.

This article is for informational and educational purposes and is not legal advice. Additional information and resources can be found on the FinCEN website at www.fincen.gov/boi.

Livestock insurance made easy.

Whether it’s Livestock Risk Protection (LRP), or a Pasture, Rangeland, and Forage policy (PRF), fınding the right insurance for your herd and pastures has never been easier. Our exclusive Optimum tool analyzes your operation to fınd the best LRP or PRF policy for you.

Discover Optimum. Contact the team at AgCountry.

AgCountry.com/Locations

AgCountry Farm Credit Services is an equal opportunity provider. In accordance with Federal law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offıces, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs).

Advocate.

Support Farm Credit as we champion farmers and rural communities by becoming a Farm Credit advocate. The Farm Credit Council program is designed to educate Congress on agriculture and types of policies that are important to the success of farmers.

Signing Up is Easy

Text the word CREDIT to 52886, scan the QR code below, or visit FarmCredit.com/TakeAction to sign up.

Farm Credit will only contact you when necessary. The Farm Bill debates continue, and they anticipate relying on Farm Credit advocates to ensure the voices of rural America are heard.

Become a Credit Advocate

Scan below to sign up or visit FarmCredit.com/TakeAction

TEXT “CREDIT” TO 52886

AgCountry Advocates Farm Bill Priorities

Your cooperative is actively meeting with elected officials and promoting Farm Bill priorities to help farmers and ranchers succeed. Whether it is in our nation’s capitol or at a farm show, we are making a difference.

AgCountry Directors, member-owners, and staff with U.S. Sen. Tammy Baldwin (D-WI) in Washington, D.C.

U.S. Sen. John Hoeven (R-ND) discusses crop insurance with AgCountry staff.

U.S. Sen. Kevin Cramer (R-ND) listens to AgCountry’s farm bill priorities.

AgCountry’s Howard Olson speaks in front of members of Congress at a field hearing at Farmfest.

SCAM AWARENESS: Fraud Safeguards

Bad actors are always trying to take advantage of unsuspecting victims to gain financial benefit. Agriculture is not immune from these attempts to defraud. Lately, we have witnessed attempts to scam our very own customers that have presented themselves in different forms. Here are a few examples of attempts we are aware of:

Mail Scams

Although a lot of business is conducted electronically today, physical mail scams still exist. Recently, AgCountry customers in all three states reported receiving a fake mailer stating their home warranty secured through AgCountry may be expiring or may have already expired. At first glance, the document can appear valid. However, it is filled with fake information to make the recipient believe it is real.

A scam will often say payment needs to be made quickly to get you to act without stopping to question it. Never issue payment without verifying a request.

If you receive a communication that appears suspicious, please contact your local AgCountry office immediately to authenticate the document.

Dealership Fraud

With the rise of purchasing machinery and equipment online without an in-person visit to the

Example of a mail document scam

dealership, the potential for scams is rising. Our partners at AgDirect have made us aware of two recent attempts to impersonate an active or inactive equipment dealership in both Minnesota and Wisconsin.

Finding a great deal on a piece of machinery is always rewarding. Unfortunately, scammers know this, which is why they play off of too-good-to-be-true offers. If you are exploring purchasing machinery or equipment from another state or a different region of your home state, the scammer is relying on you to avoid doing further due diligence.

According to AgDirect, here are steps you can take to

keep you safe as you explore purchasing equipment:

Ask Questions

• How confident are you in the seller?

• Have you worked with the seller before?

• Have you met the seller or seen the equipment in person?

• Is the seller pushing you to act quickly and wire money?

Investigate

• Google the seller by name and keep an eye out for any reports of recent scams in your search results.

• Reference the Better Business Bureau to verify it is a recognized business entity and that the company hasn’t been compromised.

• Pull up the seller’s address on Google Earth, or better yet, visit the seller in person to confirm a brick-and-mortar location exists.

• Insist on seeing the equipment. Request a video call to view the equipment when shopping from a distance.

Consult with Others

• Read online comments from other buyers or reach out to other known buyers who have made a purchase with the seller.

• Research the seller and products independently and compare prices with other websites to ensure legitimacy.

• Leverage the knowledge and relationships of your nearest AgDirect territory manager or other dealers in the area to determine whether the equipment is coming from a reputable seller.

To finance a piece of machinery or equipment safely, please contact AgDirect (powered by Farm Credit) at 888-525-9805 or visit agdirect.com.

Staying Safe

Being aware of potential scams will help prevent you from falling victim to them. Again, never transfer money to someone you don’t know. Scammers are likely to ask you to wire money as they don’t have the ability to cash or deposit a check. When conducting business, always research and verify the authenticity of the person or party.

Upperclassmen Scholarship Recipients

Ten current college students have been selected to receive a $1,000 scholarship as part of AgCountry’s Upperclassmen Scholarship program. Each student has completed at least 69 credits at a college or university while focusing their studies on agribusiness, business, or a related field.

This year’s recipients are:

The 2024 AgCountry Upperclassmen Scholarship program will open this fall. Please visit AgCountry.com/Scholarships for more information.

AgCountry Farm Credit Services

P.O. Box 6020

AgCountry’s AgFocus Conference is the premiere educational event of the year for our cooperative. New this year, three conferences will be held across our territory, in Willmar, Fargo, and Jamestown. These events will feature top industry experts from around the world of agriculture. Attending the AgFocus Conferences gives you an opportunity to learn and network alongside fellow farmers and ranchers. Regardless if you have been farming for three decades or are just getting started, there is something for everyone!

To register, scan the QR code or visit AgCountry.com/Events