Fall 2018 Financial Partner

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FarmCreditEast.com

THE BIG PICTURE

ECONOMISTS’ PERSPECTIVES ON THE AG ECONOMY IN THE NORTHEAST AND BEYOND

INSIDE FALL 2018

2 | News & Views 3 | CEO Column

4 | Cover Story 11 | FarmStart

12 | Fruit of the Fungi 14 | Farm Bill Update

N EW &V IEW S S

FarmCreditEast.com

Farm Credit East’s Customer Assistance Program 2019 Director Elections and 2020 Nominating Committee Process As many of you know, we hold our director elections each spring, but what you might not realize is that this annual process actually starts each fall when our Customer Service Councils meet to identify and recommend potential director candidates to our Nominating Committee.

As part of this process, Customer Service Councils also recommend the slate for the following year’s Nominating Committee (both members and alternates). Any borrower eligible to own voting stock is welcome to nominate themselves to be considered for a position on Farm Credit East’s Nominating Committee.

If you or someone you know is interested in serving on the 2020 Nominating Committee, contact your Customer Service Council representative, your local branch manager or visit FarmCreditEast.com/Elections to learn more. Nominations must be received no later than December 31, 2018.

As a customer-owned cooperative, Farm Credit East is committed to providing the services and resources that our members need. That is why this past spring we began offering a customer assistance program at no cost to you. Farm Credit East customers, their families and their employees, may access the services of ESI Group by calling 800-252-4555 or visiting theEAP.com. This service, the same that is available to Farm Credit East employees, has a wide range of HR, legal, financial and personal wellness resources available. All you need to indicate to use this complimentary service is that you are a Farm Credit East customer.

Learn more: FarmCreditEast.com/CAP

Careers with Impact If you’re looking for more than a job — s­ omething you can truly commit to, believe in and feel good about — F ­ arm Credit East is the career choice for you. When you join Farm Credit East, you have the opportunity to provide impactful financial, business and risk management solutions to farmers, foresters, fishermen, agricultural business owners and rural property owners across the Northeast. Both full-time and internship opportunities are available. We’d love to get the conversation started.

Learn more: FarmCreditEast.com/Careers

Farm Credit East’s Annual Photo Calendar Contest Congratulations to all of the talented photographers whose photos will fill the pages of Farm Credit East’s 2019 Agricultural Views calendar. And thank you to the more than 800 entries we received representing unique views of the Northeast’s diverse agricultural industries. For a copy of the 2019 Agricultural Views calendar, please contact your local branch office.

And believe it or not, we’ve already begun collecting photos for our 2020 calendar! The deadline may be months away, but we encourage you to submit your photos as they’re captured – including those snowy winter scenes. We look forward to seeing your submissions!

FarmCreditEast.com/Calendar Deadline: July 31, 2019 2

FINANCIAL PARTNER

“

At Farm Credit East, our staff is equipped to work with customers to address both short and long-term needs.

”

CEO’s MESSAGE

THE LONG VIEW Bill Lipinski, CEO, Farm Credit East As I read this issue’s feature story

consultants can work with customers to

operate or capitalize the business, and is

interviewing four economists, I

help them assess their profitability and

part of the value proposition of being a

appreciated their perspective as they

improve it. We have a range of financial

cooperative member. A strong patronage

discussed the issues facing U.S. and

services that can help producers better

program is part of our commitment to

Northeast agriculture. Though they

understand their business, manage risk

staying financially strong and being a

opined on current issues like the ongoing

and stay in compliance.

trusted financial partner to Northeast

trade and tariff disputes and the current

Farm Credit East can also help

status of the farm bill, they also provided

producers tackle long-term priorities,

In this issue’s feature story, the

a longer term view on the impact of

whether it’s a loan to buy the farm or

economists’ views on the future of

extended trade disruptions and the

timber parcel next door, or assistance

Northeast agriculture are in line with

outlook for Northeast agriculture.

with a generational transfer plan. In

what I believe — that there is a bright

The demanding daily tasks of running

agriculture today and tomorrow.

today’s industry, stepping back to

future for Northeast agriculture,

a business can sometimes cause owners

evaluate the big picture of your operation

commercial fishing and forest products.

and managers to have a shorter term

and develop its long-term plan has never

Yes, there are challenges, but we have

focus. After all, in the short term, they

been more important.

the natural resources and infrastructure

may have to concentrate on planting or

That’s why at Farm Credit East we

required for long-term success, and our

harvesting crops, taking care of livestock,

seek to recruit and develop a talented

region’s innovative producers are well

or day-to-day employee management.

staff who understand producers’

positioned to meet the needs of a

businesses and can help them find the

diverse customer base in the Northeast

stress, the short-term challenge may be

financial solutions they need. It’s also

and beyond.

generating enough cash flow to make

why our board and management team are

ends meet at the end of each month. We

committed to maintaining a financially

to step back and take the long-term

know it’s easy to let the long-term view

strong cooperative. That strength allows

view. The economists’ comments

slip to the back burner when there are so

us to work with producers who are facing

remind us that the decisions that are

many immediate concerns to focus on.

financial challenges and gives us the

made today will impact what happens

capacity to assist members in growing

tomorrow. I hope that as the calendar

and evolving their businesses.

turns to 2019, we will keep in mind that

For those managers facing financial

But as producers navigate day-to-day challenges, it’s important to maintain

We don’t always have the luxury

there are great opportunities ahead of

a long-term perspective to keep their

Given our strong financial position,

businesses on track for the future. At

the Farm Credit East board approved a

us, and Farm Credit East looks forward

Farm Credit East, our staff is equipped

special, one-time patronage dividend of

to working with our members to take

to work with customers to address both

$15 million that was paid to stockholders

advantage of them.

short and long-term needs. In the short

in October. The board’s philosophy is

term, our loan officers and business

to return funds that are not needed to FALL 2018

3

THE BIG PICTURE ECONOMISTS’ PERSPECTIVES ON THE AG ECONOMY IN THE NORTHEAST AND BEYOND

There’s no question that there’s a lot going on in agriculture right now. Dairy prices have been low for a number of years. There is anxiety over changes from the North American Free Trade Agreement (NAFTA) to the U.S.-Mexico-Canada Agreement (USMCA) and how it will impact agriculture. There are growing concerns over whether a farm bill will be passed, and longstanding issues regarding the availability of agricultural labor.

In many cases, the long-term impacts of how these various issues will affect agriculture are unknown. We know this can cause concern and uncertainty in the minds of many Northeast producers.

Yet, there are some bright spots in agriculture — consumers have a growing interest in where their food comes from and purchasing local; per capita consumption of dairy products is increasing; and possible enhancements to farm bill programs. Let’s not forget the strategic and progressive producers we have here in the Northeast, who are creatively thinking through ways to overcome challenges and adapt their businesses to the changing marketplace.

To get more insight into the current state of some of these issues, such as trade, labor and dairy markets, and their forecasted long-term impact, Chris Laughton, Farm Credit East Director of Knowledge Exchange, recently interviewed four leading economists to give both local and national perspectives. As it turns out, even though agriculture is facing some challenging times right now, they’re in agreement that the long-term outlook for Northeast agriculture is pretty bright. Read on to find out what they had to say.

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FINANCIAL PARTNER

C O V E R

S T O R Y

FALL 2018

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TRADE Trade issues are on everyone’s mind today. What are your thoughts on the current trade environment and how it’s affecting agriculture?

JOHN NEWTON: It’s no secret that the current trade situation significantly affects agriculture. The administration recently responded with an announcement of three separate programs to try to offset the impact of the trade situation on farmers and

JENNY IFFT: A fair share of the specialty crops that we grow in New York are exported at the national level, by other states if not New York, so trade is definitely a concern. For example, not quite a third of U.S. fresh apples get exported. Mexico is a big customer. So there’s a lot of uncertainty with our specialty crops sector here in the Northeast.

DAIRY Dairy is facing some real challenges at the moment, what is

ranchers. Those three programs include (1) the market facilitation program, which delivers direct payments to growers; (2) foreign

your short-term and longer-term outlook for this industry?

market development funds; and (3) purchase of commodities for BEN: Dairy’s been in an extended period of difficult prices. A

distribution into food banks and other avenues. This is impacting a lot of Farm Bureau’s members — even those who have seen the

lot of what we’re dealing with comes down to a few factors: 1. High exports: We’re seeing high levels of exports, at least

prices for crops fall substantially before. It’s a very real issue.

BEN LAINE: What we’re going through right now is challenging for agriculture. Trade affects everybody. If product

for now, which brings both the good and the bad that

comes with that. We’re much more susceptible to pricing

on the world markets than we would be otherwise.

2. Decline in fluid milk consumption: A decline in milk

starts backing up in the U.S., whatever the commodity, it’s going to affect markets whether the specific product was initially going

consumption has been going on for quite some time, yet

to the export market or not. So if you have dairy products piling

overall, per capita consumption of dairy in all products is

up in the U.S. that were supposed to go to the export market, that

going up. People are consuming more milk, they are just

starts weighing on prices. Everybody feels those impacts.

doing it in things like cheese or butter or ice cream or

yogurt.

3. Segmentation: We’re seeing a lot more segmentation from

NATE KAUFFMAN: Another piece that I don’t think is getting

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enough attention are the long-term implications. Everyone’s

the traditional plastic jug, staple milk into premium

concerned about what the environment is right now. But if this

products, and I think that’s being mirrored on the farm

environment were to play out over a long horizon, then asset

side. So we’re seeing segmentation into a group of much

markets like farmland values would presumably need to correct.

larger farms that are producing the vast majority of

If farmland markets begin to correct over the long term, that

commodity milk and then we’re seeing smaller producers

presents a significant additional stress for the sector.

focused on specialization. I think that segmentation is going

to continue to shift how the dairy industry operates.

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In the near term, we’re starting to find a little more balance

NATE: Producers need to think more about how to add

in supply and demand. We’re seeing prices climb a little. Nothing

value to their operations and to their products. Increasingly,

phenomenal, but we’re moving in a slightly positive direction

we are seeing limited profit opportunities for producers of bulk

in terms of milk price and I think that’s going to continue into

raw commodities. That goes beyond dairy and includes major

next year.

grains and other commodity products. There very well could be opportunities that exist in the processing/value-added space, but

JOHN: A few other things that I think are important for the industry to think about are:

I think there’s still a decent amount of transition that’s required in order to get there.

1. Farm Bill. There’s a lot of things that the farm bill

potentially has in it that may help the dairy industry. First,

the farm bill really improves the safety net for small to

mid-sized dairy operations. The MPP program is made much

more affordable and coverage is expanded.

2. Risk management. The Bipartisan Budget Act of 2018

removed the subsidy cap on livestock insurance products.

Most of the major field crops have been using crop

insurance as a risk management tool for decades, but

we haven’t seen that level of adoption in the livestock

space, especially not in dairy, partly because there was

a financial cap on the amount of premium subsidies that

were available.

3. Milk donation program. This is an issue that has impacted

the Northeast quite a bit. Because of the federal milk

processing order, there’s a financial incentive to dump

surplus milk instead of bottling and donating it. The farm

bill creates a milk donation program. For those who donate

milk, the Secretary of Agriculture will give them back a

credit to the pool.

JENNY: Here in New York, while we have a lot of farms

under stress, we also have some farms that are very resilient.

Here at Cornell, we calculated breakeven milk prices and it varies

FARM BILL While the farm bill’s two versions have significant differences on nutrition programs, the ag provisions seem more in alignment. What do you see impacting producers in the coming bill?

JOHN: Many called the 2014 farm bill revolutionary in that it got rid of direct payment programs and introduced new safety net programs that required farmers to have more skin in the game, or need-based programs based on prices and/or revenue.

Everyone knew this current farm bill would be more evolutionary.

We weren’t going to have the opportunity to make substantial changes to the programs due to financial reasons. I don’t think there’s anything too revolutionary in this farm bill for production agriculture. In general, we’re just hoping that the farm bill gets done to provide certainty.

NATE: In addition to that aspect of uncertainty, we’re getting to the point when lenders start thinking about the next loan renewal season. Lenders have already had a lot of difficult conversations with producers over the last few years and some of these producers’ working

greatly across all the farms we had data for. That’s the general environment we’re seeing.

FALL 2018

capital has gotten to a point where they can’t be pushed any

to get into more specialty fresh fruits and vegetables, but that can

further. Producers are restricted in finding ways to make it work

be more labor intensive, so it’s a tradeoff. There’s a lot of creative

if the cash flow just isn’t there. Elements of uncertainty will only

strategies, varying from working with refugees to working with

push that conversation further. I think that’s probably where

high-schoolers. There’s a lot of adjustments going on at the

there’s some risk, at least in the eyes of the lenders.

farm level and there’s an overall greater focus on better human resource management.

JENNY: Here in New York, we’re seeing a particular challenge in producer education. Our focus is on explaining the changes

NATE: I agree that this is an issue that extends well beyond

the farm bill will have on existing programs. MPP would change,

farming. Usually the first thing businesses tell us today is that they

LGM, Dairy-RP — there’s going to be different ways that producers

can’t find workers. There’s just a dramatic labor shortage in general,

can use these programs in conjunction, so we’re trying to help

and that’s generating a lot of challenges. It causes operations to think

producers understand those changes. Also, there’s a lot of mistrust

a little bit more, and maybe more creatively, about what they might

after what happened with MPP. We’re hearing people don’t want

do in the way of labor-saving technologies and capital purchases that

to bother with MPP even knowing that they’ll get payments. We’re

could offset some of those labor pressures.

trying to think of how to get this new information out there in a way that is sensitive to that.

BEN: Agreed, it is an issue across the board. I think the reason we’re seeing it impact agriculture, maybe even disproportionately,

LABOR CHALLENGES Labor markets are extremely tight, with low unemployment, immigration enforcement pressure, and remote prospects for any kind of guest worker reform in the current environment.

How is this affecting agriculture and what are the implications?

JENNY: This is a general economic condition. Any employer you talk to is facing this. There’s also a lot happening at the state level, so in many places, minimum wage is increasing and overtime rules are changing. It’s a restrictive environment.

We’re seeing a lot of adjustments to invest in labor-saving or labor-enhancing equipment. On one hand, some producers want 8

FINANCIAL PARTNER

is that jobs in fields like construction or manufacturing or other rural industries are looking for workers too. That pulls workers specifically from the pool of agricultural jobs. That’s forcing agricultural employers to increase their wages at a faster rate in order to find and retain workers, which puts significant strain, especially in crops, commodities and dairy, where there’s already pretty slim to negative margins.

JOHN: When we talk to our folks around the country, we can talk about the farm bill or taxes, regulatory reform or trade issues, but the number one thing that has most of our members concerned is who’s going to be there to help them milk the cows at 3AM?

Who’s going to be there to help pick the fruit off the trees? It’s the

the part of the consumer about what agriculture really means and

labor challenge that’s the biggest concern.

looks like, and why it’s important. There’s also a lack of producer

Another important issue I’ll note is global development. We know that by 2050 some of the fastest growing economies in the

understanding about what consumers are actually interested in.

There are big opportunities in trying to bridge that gap.

world are going to be in Sub-Saharan Africa. What can we do from

The Northeast is particularly well positioned to have that

a research and development initiative, from a marketing initiative,

interaction between farmers and consumers. As we go forward,

from a trade initiative, to help bring some of our expertise to

and fewer people come from agricultural backgrounds, there’s a

farmers in those countries and help improve their rural economies?

need to continue that education and communication.

This is an opportunity for U.S. agriculture to have a footprint in some of the fastest growing economies around the world. It not only provides an opportunity for agriculture to market and sell products, but it provides food security, and food security ultimately provides national security.

CONSUMERS Consumers today have a higher level of interest in

NORTHEAST AGRICULTURE That’s a great segue into our final question. The Northeast is a somewhat unique region for agriculture. Any concluding thoughts on Northeast agriculture and the road ahead?

JENNY: I’ve been impressed with how many progressively managed farm operations there are of all different sizes, across

agriculture and how their food is produced. This is both an

all different parts of the Northeast and all different types of

opportunity and a challenge. How do we take advantage of

production. A lot of farms have invested in specialized processing,

consumer interest?

direct marketing or other types of production. That’s going to be increasingly important going forward and I think that’s one of the

JOHN: Sustainability is becoming a big issue. Increasingly,

Northeast’s biggest comparative advantages.

consumers want to know how something’s produced throughout the supply chain. With the rapidly increasing speed of technology,

NATE: I’ll add two opportunities that pertain to the Northeast.

it may be something agriculture needs to deal with sooner rather

The first is recognition that the Northeast is a very different place

than later.

as it relates to proximity to population centers. So when you think about shifting consumer demand and variability, the Northeast’s

BEN: I work with both folks on the production side of dairy

proximity to population centers will position it well.

and processors who are responding to consumer concerns. There is a pretty big disconnect. There’s a lot of misunderstanding on FALL 2018

9

The other has a longer-term impact — water and climate

that sense and being in areas where there are people, producers

change. Those are going to be at the forefront of concerns on the

know what consumers want and they’re able to respond quicker —

west coast and even parts of the south-central plains, but that’s not

that’s a big advantage.

really an issue that the Northeast deals with.

JOHN: I’ve had the opportunity to visit the Northeast on many BEN: Coming from the Northeast originally and then heading

different occasions, and as everyone else has pointed out, it truly

west and seeing the variety in the different types and scales of

is a unique agricultural system and culture that positions it well to

agriculture, I think it’s important to be aware that the Northeast

market and meet the needs of consumers in that region. There’s an

does things differently from other parts of the country. For

incredibly bright future with the farm-to-table movement and with

example, other parts of the country have much larger dairy

value-added processing. All of agriculture has great opportunities

operations that are getting efficient at doing things at a low cost

ahead of it, including the Northeast.

commodity basis.

However, I think there is value to both sides of that spectrum.

The Northeast has a great advantage in terms of being progressive and innovative, both in higher-valued products and in the management of their operations. The Northeast farm is much more suited to be agile and able to respond. And, in many cases, producers are much closer to consumers. Being connected in

MEET OUR ROUNDTABLE

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Director of Knowledge Exchange, Farm Credit East

JENNY IFFT ASSISTANT PROFESSOR

BEN LAINE SENIOR ECONOMIST

Charles H. Dyson School of Applied Economics and Management, Cornell University

Dairy Processing and Production, Knowledge Exchange Division, CoBank

NATHAN KAUFFMAN VICE PRESIDENT, ECONOMIST & BRANCH EXECUTIVE

JOHN NEWTON CHIEF ECONOMIST

Federal Reserve Bank of Kansas City

10

CHRIS LAUGHTON MODERATOR

American Farm Bureau Federation

FarmStart’s 275th investment was to J&S Brothers Farms LLC, in Mullica, NJ. Pictured at the farm are farm owners Salvador and Jose Constantino with farm manager Bobby O’Sullivan and their FarmStart advisor James Hoffman.

FARMSTART’S 275TH INVESTMENT IN STARTUP FARM, FISHING AND FOREST PRODUCTS BUSINESSES Jose and Salvador Constantino grew up around farms and have worked on farms their entire adult lives. When the

most. Farm Credit East is really there to help

insight provided by FarmStart advisors like

farmers get started.”

James, improves startup businesses’ odds for

Both Jose and Salvador are committed

long-term success.”

opportunity to go from workers to owners

to creating a successful farm that can

presented itself last year, they decided to

provide for their families. They have strong

Farm Credit East, Yankee Farm Credit

make the transition to form J&S Brothers

work ethics, positive attitudes and an overall

and CoBank to fulfill Farm Credit’s long-

Farms LLC. They currently farm 200 acres

thirst to become knowledgeable in all

term commitment to support a vibrant,

in Mullica, New Jersey, growing a variety of

facets of commercial vegetable farming and

entrepreneurial Northeast agricultural

vegetables, including peppers, cucumbers,

business. As a unique program established

community. The program invests

green and yellow squash, butternut squash,

to provide the critical last dollar essential

working capital of up to $75,000 to help

asparagus, and turnips.

for beginning agricultural ventures to get

beginning Northeast farm, forest products

started, J&S Brothers Farms LLC epitomizes

and commercial fishing businesses and

FarmStart’s mission.

cooperatives become operational. Since

The brothers turned to FarmStart after being denied other financing due to lack of business experience and production history.

“It’s rewarding to work with beginning

FarmStart, LLP is a joint initiative of

the first investment approved in August

“The season was starting and we needed to

farm operators like Jose and Salva,”

2006, FarmStart has invested more than

get plants in the ground,” explained Jose.

commented their FarmStart advisor, James

$12.7 million with over 275 agricultural

“We had already invested our own capital,

Hoffman. “Producers like them are the next

and fishing entrepreneurs throughout

so we just needed that additional bit to get

generation and FarmStart gives them an

the Northeast.

everything in the ground and growing. The

opportunity to get started.”

FarmStart investment provided that capital

“Additionally, I work closely with

Each FarmStart participant completes a business plan and monthly cash flow

at the right time, and it was an incredibly

FarmStart customers to provide advice and

budget to serve as a roadmap for the

simple process.”

guidance,” James continued. “I help startup

startup business. A FarmStart advisor

producers transition from just planting

works with each participant to help

Salvador have stepped up to the plate in

vegetables to really looking at farming as a

the new business stay on track toward

their respective roles to ensure the best

business — making sure the i’s are dotted

achieving its objectives. Additionally, Farm

chance at success, working sun up to sun

and t’s are crossed.”

Credit East’s Knowledge Exchange program

During this first season, Jose and

down. Jose manages the day-to-day activities

“The FarmStart program is unique in its

offers resources for these startup producers

and Salvador is responsible for planting and

focus working with beginning entrepreneurs

via hot-topic webinars and industry reports

harvesting decisions.

to establish successful businesses,” said

and analysis.

“We’re here today thanks to the

Scott Andersen, Farm Credit East senior vice

FarmStart investment,” said Jose. “The

president based in the Bridgeton, N.J. office.

capital was available when we needed it the

“Working capital, along with the valuable

For more information on FarmStart, please visit FarmCreditEast.com/FarmStart.

FALL 2018

11

FRUIT OF THE FUNGI NEW YORK OPERATION EXPANDS ITS UNIQUE MUSHROOM PRODUCTION Mushrooms are a unique aspect of

They got started part time, seasonally

sales value has increased by 83 percent to

growing Shiitake mushrooms on logs

here in the Northeast, although that

more than $1.9 million annually.

and selling to a few restaurants and at the

trend is changing. Back in 2007, New

12

percent to 1.79 million square feet; and

agriculture, and one not done by many

Fruit of the Fungi, owned by KC

local farmers’ market. They toured other

York and Rhode Island were the only two

Mangine and his wife Kristi, are one of

New York State mushroom farms and

Northeast states producing mushrooms.

those Northeast operations. Straight out

went to seminars in the western part of

Today, all Northeast states have a share

of college, KC interned on a vegetable

the country to learn more.

in the industry. According to the 2012

farm that cultivated a small amount of

Census of Agriculture, the total number

log-grown mushrooms. In 2005, KC

of trial and error,” said KC. “There is no

of mushroom-growing operations in

and Kristi purchased their own farm

blueprint for the best way to do this, so

the Northeast has more than doubled

in Lebanon, New York, and used that

we’ve run some trials to figure out what’s

to 90 farms; square footage growing

experience and interest in a unique

working and what’s not. It takes time to

mushrooms has increased by nearly 100

product to begin their farming adventure.

really get things efficient.”

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“More than anything, it’s been a lot

THE GROWING OF FUNGUS:

HOW MUSHROOMS ARE GROWN When people think of agriculture, they typically think of raising plants or animals — but mushrooms are a unique farm product because they are neither! There are two types: the more common mushrooms, such as button and portabellas, which are grown on a composted mixture. Then there are more specialty varieties, such as those grown by Fruit of the Fungi, which are grown on wood substrates. To expand production, the Mangines switched their wood substrate from logs to enriched sawdust.

In 2012, Fruit of the Fungi produced

operation. They made sure to have

national Farmer Veteran Coalition, which

1,300 pounds of high-quality specialty

solid footing before signing on to

is supported by the Farm Credit System.

mushrooms. They had plans to grow

additional obligations.”

The label serves to inform consumers that

and realized that outdoor, seasonal log

In addition to helping finance their

the agricultural product was produced by

production wasn’t going to allow them

expansion, the Mangines also switched

to do that. They decided to switch to

from preparing their own taxes to using

year-round indoor production. Working

Farm Credit East’s tax specialists who

has helped to start conversation,” said

with Farm Credit East and the USDA

made sure they got all the deductions

Kristi. “We’re proud to use the label and

Farm Service Agency (FSA), they built a

they were entitled to. “Especially in the

it’s enabled us to create some meaningful

mushroom-growing facility with space

first three years, we were able to get some

market connections.”

for incubation, growing and processing.

state credits that probably would not be

The new facility was completed in 2015

apparent to me,” said KC.

and in addition to allowing them to grow

Today, Fruit of the Fungi is one of only

a U.S. military veteran.

“The Homegrown By Heroes label

Those connections are what KC says is part of what he loves most about farming.

“I’ve always been interested in growing

mushrooms year-round, it also enabled

about half a dozen producers in New York

things and watching things grow, but

them to expand into new varieties.

State growing mushrooms indoors on a

talking to people and making connections

large scale. The farm grows eight varieties

is what I enjoy the most. We have a

said KC. “The new facility gave us the

of mushrooms, including Maitake, Lion’s

unique, high-quality product, so it’s great

capacity to grow about seven times more

Mane, Oyster and Shiitake. They sell their

to tell someone about your product when

mushrooms, so over the past few years,

mushrooms, including dried mushroom

you’re confident with what you’re selling

we’ve really grown into the additional

products, wholesale to small groceries and

and you know that they’re going to be

production space.”

restaurants, as well as direct to consumers

happy with it.”

“That was a pretty big jump for us,”

“The Mangines were strategic in

at farmers’ markets and via a small CSA.

their growth, progressing at a measured

Another unique aspect of the Mangine’s

“I also like the flexibility,” KC continued. “The ability to make the most

pace,” commented Craig Pollock who

operation is that they market under the

of the years we have together with our

worked with the Mangines while they

Homegrown By Heroes label. Kristi is

children has been great. So flexibility is

were developing their business. “They

an army veteran, having served in the

the greatest advantage, and the sales and

established their markets and then sought

early 2000s, and Homegrown By Heroes

marketing aspect is the most fun.”

counsel on the best way to develop their

is the official branding program of the

F A R M E R V E T E R A N F LY- I N In July, Farm Credit East joined with other Farm Credit associations and more than 30 farmer veterans during a Farm Credit Farmer Veteran Fly-in in Washington, D.C. Farm Credit East representatives Tom Cosgrove and Kyle Bell, along with John Lemondes, owner of Ellys Acres Farm in Jamesville, New York, and president of

the New York Farmer Veteran Coalition, Inc., visited multiple Northeast legislative offices to help policymakers understand the importance of programs that enable returning service members to forge meaningful careers in agriculture.

They’re pictured here with Congressman John Katko (NY-24).

FALL 2018

13

WASHINGTON Update

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Tom Cosgrove Senior Vice President for Public Affairs

Update on the 2018 2019 Farm Bill

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When lawmakers left Washington prior to the mid-term elections, they left behind some unfinished business for the 115th Congress when it returns from recess.

For many in agriculture, topping the list of unfinished business is completing the 2018 Farm Bill. Early in the summer, it appeared there was a window for completing the farm bill with both the House and Senate passing the legislation in June. At that point, however, the process bogged down. There has been little progress by the House and Senate conference committee members tasked with negotiating a single version of the bill.

Underlying the lack of progress by

have comparable changes to SNAP and

uninterrupted. In addition, some of the

the conference committee are major

passed 86-11. While the SNAP changes are

commodity programs, while expired, will

policy differences between the two

the biggest sticking point, there have been

continue through each crop’s marketing

chambers’ versions. The biggest policy

disagreements between the two chambers’

year, and thus are effectively in place into

differences relate to the House’s proposed

negotiators over some of the farm program

2019. The lack of a major disruption may

changes to the Supplemental Nutrition

provisions as well.

be one reason why Congress was able to

Assistance Program (SNAP), formerly known as food stamps.

term extension of the 2014 Farm Bill.

With Congress unable to pass a new

While USDA indicated it could keep

about 80 percent of farm bill spending.

farm bill, the 2014 Farm Bill expired on

many programs operating, a number of

The House version would make changes

September 30. What are the impacts of

programs are now on hold due to lack of

to SNAP eligibility and add new work

its expiration? Perhaps less than you

authorization, funding or a combination of

or job training requirements along with

might think, which contributed to

both. These include certain conservation

providing funding for state training

Congress’ inaction.

programs; beginning farmer assistance;

SNAP and nutrition programs comprise

programs. These changes were strongly

14

leave Washington without passing a short-

2014 FARM BILL EXPIRES

Since major programs such as SNAP

value-added, export market development

opposed by House Democrats, which led

and crop insurance have funding and

and organic technical assistance programs;

to the bill passing the House by a narrow

authorization outside of the farm bill

and some nutrition assistance programs

213-211 margin. The Senate version didn’t

itself, those programs have continued

other than SNAP. In most cases, where

FINANCIAL PARTNER

H

FA R M CR EDIT A DMINISTR ATION VISITS THE NORTHEAST HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH Jeff Hall, board member of the Farm Credit Administration,

manager Rob Yurkewecz, Mr. Hall and Mr. Kramp visited

Farm Credit East’s regulator, and his executive assistant

Schoharie Valley Farms, operated by NYS Commissioner

Kevin Kramp, recently made a visit to the Northeast to learn

of Agriculture Richard Ball, in Schoharie, N.Y., and Saratoga

more about the diversity of the region’s agriculture. Along

Sod Farm, owned by Farm Credit East board vice chair Laurie

with CEO Bill Lipinski and Cooperstown, N.Y., branch office

Griffen and her husband, in Stillwater, N.Y.

funds have been disbursed, activities can

tariff under NAFTA will maintain zero

the recent election results. Though both the

continue, but USDA will not take new

tariffs. The agreement could provide

Chair and Ranking Members of the House

applications or disburse funds for these

additional market access to the Canadian

and Senate agriculture committees have

programs until Congress reauthorizes them.

dairy market as well as eliminate part of

indicated they intend to complete work on

Canada’s pricing system that was used to

the farm bill following the election, now

through the end of the calendar year

disadvantage certain U.S. specialty dairy

that the Democrats have taken control of

so Congress must act before then. For

product exports to Canada. The agreement

the House, they may want to put their own

example, the Dairy Margin Protection

could also provide some additional access

mark on the farm bill.

Program will run through the end of the

for eggs, chicken and turkey products,

calendar year but it is not authorized for

but maintains a provision protecting the

unable to complete work on the 2018 Farm

2019. Extending the current dairy program,

Canadian lumber industry. Many industry

Bill by September 30. Both chambers’

or authorizing a new one before December

groups view the agreement as a positive

versions of the farm bill maintained a strong

31, is viewed by many as a “must pass” for

step, but others have taken a “wait and

crop insurance program and other risk

Congress, but then many thought the same

see” attitude.

management options for producers as well

Other programs’ authorizations run

thing about passing or extending the farm bill before September 30.

as improved the USDA Farm Service Agency WHAT HAPPENS NEXT? When Congress returns post-election,

NAFTA[USMCA

It is disappointing that Congress was

loan guarantee program. And though there was significant activity on the ag labor issue

it will have to address another piece

in 2018, Congress’ continued failure to

of unfinished business — funding for

pass a workable agricultural guest worker

the expiration of the 2014 Farm Bill, but it

the government. Congress has passed,

program is a major concern.

also marked the announcement of the new

and the President signed into law, five

Here’s to hoping that the 115th

U.S.-Mexico-Canada Agreement (USMCA),

of the 12 appropriations bills that fund

Congress completes the farm bill and

which may create an item of “New

the government annually, along with a

other critical legislation, so that it doesn’t

Business” for Congress when it returns.

temporary spending bill to fund the rest

leave its unfinished business for the

USMCA, the trade agreement to replace

of the government through December 7.

next Congress.

September 30 was notable not only for

NAFTA, needs to be approved by Congress before taking effect.

Agricultural products that had a zero

How Congress deals with continued government funding for the farm bill, and approval of the USMCA, could be shaped by

FALL 2018

15

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