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Loans and leases FarmStart Country Living Loans Financial record-keeping Tax planning & preparation Payroll services Consulting for business success Estate planning Financial benchmarking Grant writing GenerationNext Appraisal services Insurance Services

Business Services to Help You Increase Profits A Best Practice Guide for Agricultural Businesses

Farm Credit East OFFICE LOCATIONS Presque Isle


Auburn 615 Minot Avenue Auburn, ME 04210 800.831.4230 Batavia 4363 Federal Drive Batavia, NY 14020 800.929.1350

Mayville 28 E. Chautauqua Street Mayville, NY 14757 800.929.2144

Bedford 2 Constitution Drive Bedford, NH 03110 800.825.3252

Dayville 785 Hartford Pike Dayville, CT 06241 800.327.6785

Middleboro 67 Bedford Street, Middleboro, MA 02346 800.946.0506

Bridgeton 29 Landis Avenue Bridgeton, NJ 08302 800.219.9179

Enfield 240 South Road Enfield, CT 06082 800.562.2235

Middletown 669 East Main Street Middletown, NY 10940 888.792.3276

Burrville 25417 NY Route 12 Watertown, NY 13601 800.626.3276

Flemington 9 County Road 618 Lebanon, NJ 08833 800.787.3276

Potsdam One Pioneer Drive Potsdam, NY 13676 800.295.8431

Claverack 190 State Route 9H Hudson, NY 12534 800.362.4404

Geneva 1450 Route 14 Phelps, NY 14532 800.929.7102

Presque Isle 26 Rice Street Presque Isle, ME 04769 800.831.4640

Cobleskill 2668 State Route 7, Suite 21 Cobleskill, NY 12043 800.327.6588

Greenwich 394 State Route 29 Greenwich, NY 12834 800.234.0269

Riverhead 1281 Route 58 Riverhead, NY 11901 800.890.3028

Cortland One Technology Place, Suite 2 Homer, NY 13077 800.392.3276

Hornell 1155 Airport Road Hornell, NY 14843 800.929.2025

Sangerfield 995 State Route 12 Sangerfield, NY 13455 800.762.3276

Business Services to Help You Increase Profits WELCOME Letter from CEO Bill Lipinski





Money for your business



Financing to fulfill the dream of country living



Information for profitable businesses



Are you paying more taxes than you should?



Getting it right every time and avoiding penalties


Business consulting

Get the best return on your business


Estate planning

Add more certainty to your future


Financial benchmarking

Using industry standards to track your progress in: • Dairy • Ag Retail • Winery • Green Industry


Grant writing

Grow, change or expand your business



Management development for today’s young leaders



Expert advice exclusively for agricultural businesses


How much are your assets worth?



Protecting your crops against the unknown



Business Services to Help You Increase Profits

How can we put our passion to work for you? Bill Lipinski, CEO, Farm Credit East

WATCH THE VIDEO Learn more about Farm Credit East from CEO Bill Lipinski at or on our website. 2

Sound financial management is critical to growing a profitable agricultural business. At the close of every year, some Northeast farmers feel good about what they accomplished over that past 12 months for their businesses, their employees, their families and for themselves. While, once again, others are disappointed that they earned significantly less than they should in spite of their efforts — not because they didn’t work hard or farm well, but because they lacked the financial management skills to be successful and make their businesses more profitable. As a business owner, proper financial management can help you control your costs, market your product more effectively and ultimately capture more profit. At Farm Credit East, our goal is to help you be a more successful farm business operator by providing loans and financial management tools that help you enjoy success and reward for your hard work. Whether you’re a small family business or a large operation with diverse markets, we can provide the financial management support that will help you run your business better and smarter. We built a company of experts not only in lending, but in tax planning, accounting, financial software, business benchmarking, estate planning, appraisal, crop insurance, payroll, financial planning and more. Making your business thrive does not depend on you to be an expert in every task. Helping you make your business profitable and successful for the long haul is our mission at Farm Credit East, and we’re passionate about it. Give us a call. We are eager to help!

Bill Lipinski CEO Farm Credit East


Farm Credit East

How can Farm Credit East help you increase profits? For generations, Farm Credit East has worked with thousands of agricultural business owners across the Northeast. Our goal is to provide you not only financing and working capital, but the professional services you will need to find and service your markets, manage your business and grow your profits.

Farm Credit East customer Jason Schwab of Schwab Dairy Farm, Delevan, N.Y. 4

WATCH THE VIDEO For more about Farm Credit East, see our website at

Loans, Leases, Financial and Business Services A COOPERATIVE VS. A BANK Unlike other lenders who just want your business, we know your business. Farm Credit East is devoted specifically to serving the agricultural industry within the Northeast. We are structured as a borrower-owned lending cooperative, so when you become our customer you too will have the benefits of ownership, such as patronage dividends and a vote for candidates running for the Board of Directors. Most importantly, we give our customers access to credit and financial support in every business cycle, up or down, good seasons and bad. We are staffed with experts who understand agricultural businesses and their markets, and who can bring a wealth of support to your management and accounting team.

A RELATIONSHIP VS. A LOAN Your relationship with Farm Credit East will most likely begin with the assignment of a loan officer, who will work with you to review the status of your business, obtain credit where needed and arrange for the services that you will need to run your business. These include a vast array of professional services offered at affordable prices and performed on-farm or in our offices, as you prefer. For some customers, we provide ongoing services that help them manage their businesses — processing payroll, taxes and record-keeping, for example. For

FARM CREDIT EAST • #1 financial services cooperative for northeastern agricultural businesses • Ag customers in seven states: Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York and New Jersey • Billions in loans to capitalize ag businesses • Part of the national Farm Credit System, founded in 1916 to promote the growth and prosperity of agriculture • A leader in helping small, young and beginning farmers get started in agriculture • Proud sponsors of dozens of agricultural, community and civic activities, including: FFA Star Farmer, New England Green Pastures, Cornell Dairy Fellows, Century Farm Awards and agricultural leadership programs throughout the Northeast.

others, we simply help to train and support on-farm staff with software and advice. The solutions for your business will be matched to your specific needs. If you grow, breed, process or market agricultural products long-term, Farm Credit East can help you work toward profitability and success. And the best way for us to do this is to work with you all year long, and to help you perform what you’re best at with professional ag business support wherever you need it. We look forward to working with you.



The benefits of being a Farm Credit East customer • Capacity and commitment to meet the needs of an evolving agriculture • Prompt, local decisions and on-farm service from knowledgeable loan officers and financial service experts • Commitment to supporting all aspects of Northeast agriculture, commercial fishing and forest products • Competitive interest rates and flexible terms to match your seasonal income or other specific needs • Exceptional service on the farm, online or over the phone • Financial cooperative governed by a farmer-elected Board of Directors • Ownership allowing you to share in our earnings through our patronage dividends program • Specialized agricultural expertise focused on your specific ag business • Online banking so you can manage the financial aspects of your business at your convenience


Loans, Leases, Financial and Business Services FREQUENTLY ASKED QUESTIONS Is Farm Credit East government financed? No. We are privately funded through the sale of bonds. As one of 90 U.S. financial institutions within the national Farm Credit System, Farm Credit East falls under the regulatory oversight of the Farm Credit Administration.

Is Farm Credit East a commercial bank or a credit union? Unlike commercial banks and other lenders, Farm Credit East is not a depository institution. We are owned by our member-customers. This cooperative structure is your best assurance that competitively-priced credit will always be available to farmers, fishermen and other agricultural businesses.

What is a cooperative? Cooperatives are structured so that customers are stockholders who are entitled to share in the earnings of the organization. Patronage dividends are a major advantage when you borrow from Farm Credit East. Being a cooperative also means that we are led by a member-elected Board of Directors.

Where does the money come from? Funds used in lending operations of the Farm Credit System are obtained chiefly from the sale of bonds to the public. Farm Credit East brings billions of dollars from investors to farm families and cooperatives that need credit.

Do you have to be a member to utilize Farm Credit East’s services? It depends on the services that you wish to use. For credit services, you must buy stock and therefore become a member. We provide financial services for anyone involved in an agricultural business, including owners, managers, employees and part-time farmers as well as agricultural processing and marketing businesses. Agricultural cooperatives borrow from Farm Credit through our affiliated lending institution, CoBank.

What does Farm Credit East do for young and beginning farmers? We have a number of programs to help support talented, hardworking individuals enter agriculture. Helping young people get started in farming is one of our long-term commitments to Northeast agriculture. Programs include our young and beginning farmer incentives, FarmStart and GenerationNext. 7

Farm Credit East A VIEW FROM THE FIELD “We already had the sales in place, but needed the capital to grow. Thanks to FarmStart, we were able to obtain the working capital to grow our business.”

THE MISSION: EXPAND A GROWING MUSHROOM BUSINESS THAT REACHED CAPACITY Incorporated in January of 2013, it took Michael Hallock and Robert DiPietro, co-owners of Rhode Island Mushroom Company, only two years to become the Northeast’s largest exotic mushroom grower. They quickly reached the capacity of their one greenhouse and needed capital to expand. “But since we were only a year and a half into our business we didn’t have the credit history for a traditional loan,” explained Robert. So they turned to Farm Credit East.

HOW WE HELPED Rhode Island Mushroom Company obtained financing through FarmStart, a program that provides working capital to beginning farmers and new cooperatives. With the FarmStart investment, Rhode Island Mushroom Company purchased additional greenhouses. Today they have tripled production, producing thousands of pounds of mushrooms each week. “Before we were selling mushrooms by the box, now

“ We were able to expand our business with the help of FarmStart.”

we are selling pallets of mushrooms wholesale!” said Michael. “Without FarmStart our growth would have stalled for at least six months. They gave us money when no one else would.” Michael Hallock and Robert DiPietro tripled the production of Rhode Island Mushroom Company with the help of a FarmStart investment from Farm Credit East.

Loans, Leases, Financial and Business Services A VIEW FROM THE FIELD THE MISSION: IMMEDIATE EXPANSION The Crists came to Farm Credit East to expand their business after increasing the volume of their apple production and missing key sales dates due to breakdowns and other holdups. The family’s solution was to replace their out-of-date packinghouse with a state-of-the art facility that would make them more competitive and efficient. Knowing that swings in agricultural markets would make financing hard to obtain from a commercial lender, they turned to Farm Credit East.

“Farm Credit East is a true partner.”

“Farm Credit East is a true partner and ahead of the curve as a lender. Their representatives are facilitators, not road blockers. Credit availability tied to competitive interest rates, crop insurance and regular patronage refunds have positively impacted our business. We could not have carried out many of our projects with any other lender.” – Jeff Crist

HOW WE HELPED Farm Credit East was instrumental in funding an expansion that better prepared them to profit from key agricultural cycles. Their Farm Credit East loan officer’s understanding of the Crists’ business and industry needs helped shepherd the loan through to meet their specific needs.

When Crist Bros. Orchards in Walden, N.Y., wanted to expand their business, they turned to Farm Credit East. Here is Jennifer, Jeff and Joy Crist in their state-of-the-art packing facility. 9

Loans and Leases

Our lending caters specifically to ag-business needs. One of the biggest challenges in running and growing an ag business is having reliable, ready access to money when you need it. Providing this is why the Farm Credit System exists, and why Farm Credit East is one of the most important partners you can have for growing your business. Farm Credit East’s operating, real estate, country living and specialty loans offer advantages not found elsewhere. If a lease fits your needs, Farm Credit East offers equipment, buildings and vehicle leases with terms and options you’ll find hard to beat!

Farm Credit East customer George Lucas of Lucas Greenhouse in Monroeville, N.J.


WATCH THE VIDEO Learn more about Farm Credit East relationship lending at or on our website.

WE’RE ALL ABOUT AG BUSINESS Financing and supporting agriculture isn’t just something we do — it’s all we do. Farm Credit East is staffed with a broad range of professionals who understand the many aspects of ag business management. Our loan officers come to you with a working knowledge of how business works in your agricultural industry. In addition to farmers, fishermen, forest products producers and farm services businesses, we also finance rural residence owners. Everything we do contributes to the success of agriculture and the fulfillment of country living.

ALL TYPES OF CREDIT There is virtually no kind of loan, line of credit or lease you will encounter for your business that can’t be obtained at Farm Credit East at a competitive rate and with flexible terms that will work for your particular needs. And there are other benefits of working within the Farm Credit System, including our structure as a customer-owned financial cooperative. When you obtain credit from Farm Credit East, you become both a customer and an owner, and share in our financial success through patronage dividends based on a percentage of our earnings.

FARM CREDIT EAST LENDS FOR BUSINESS AND PERSONAL PURPOSES, INCLUDING: • Farm and forest land • Building production and marketing, including barns, shops, greenhouses and retail facilities • Improvements to land, including environmental compliance and waste management • Value-added and further processing, including packing houses and processing plants • Farm residences and labor housing for hired workers • Machinery used in production, further processing and marketing • Vehicles for over-the-road and on-farm use • Commercial fishing boats and dockside facilities • Livestock and poultry • Inventory, including advance purchase of inputs, nursery stock and feed • Operating expenses for ongoing costs, such as operating inputs, producing, processing and marketing crops and other products


Loans and Leases MEMBERS SHARE IN OUR EARNINGS Because of our strong financial position and because we are a cooperative, Farm Credit East annually returns value to our customers through our patronage program. Customer-owners of Farm Credit East (including our predecessor associations) have earned millions in dividends from ownership in their cooperative.

OTHER PROGRAMS • Young, Beginning, Small and Veteran Farmer Program: The demands for capital and financial management make starting a new agricultural business difficult. That’s why we offer special incentives and financial services to young, beginning, small and veteran farmers with a solid business plan, likely potential for success and a willingness to work hard. • FarmStart: FarmStart invests up to $75,000 in working capital to help startup farmers establish a positive business and credit history during the early phases of their careers. • Other: Farm Credit East is committed to helping people enter agriculture. As an FSA preferred lender, we can help you prepare and submit an application to the Farm Services Agency for a guaranteed loan if your financial picture is not all that it could be. You’ll need to meet FSA conditions to be approved for a loan.

THE BENEFITS OF BORROWING FROM FARM CREDIT EAST • Competitive rates. Fixed, variable or a combination of both. • Expert, on-farm service. You will work with a relationship lender who knows the ins and outs of agricultural businesses and will make a point to thoroughly understand your operation and its credit needs. This includes careful fulfillment of special needs, such as timely delivery of checks during construction or complex transactions involving side businesses with multiple owners. • Flexible terms. We tailor our loan and repayment plans to provide a variety of interest rate programs, depending on the loan’s purpose, repayment terms and the flexibility you need. • Reliable credit. We offer revolving and non-revolving lines of credit to fit your business needs. And we pride ourselves on being a consistent source of credit in good times and bad. • Loan, lease analysis. Your loan officer will help you analyze the pros and cons in your decision between choosing a loan or a lease. • Ag equipment financing at equipment dealers through AgDirect® offers attractive rates and the most ag friendly terms in the business to serve all of your ag equipment financing needs, including options to buy, lease or refinance. • Commitment to agriculture. As owners of Farm Credit East, borrowers share in the financial success of their financial cooperative. We have a track record of returning a percentage of earnings as a patronage dividend.


FREQUENTLY ASKED QUESTIONS Who is eligible to borrow from Farm Credit East? We lend to farmers, fishermen, forest products producers and farm services businesses. Business owners, managers, employees and part-time farms are also eligible borrowers, as are basic agricultural processing and marketing businesses. Farmers’ cooperatives can borrow from Farm Credit through CoBank. We also finance part-time farmers and rural residence owners through our Country Living program.

What are the terms? • Short-term loans have terms of 1-to-10 years available to fund operating expenses or capital assets, with fixed- and variable-rate options, flexible repayment terms matched to cash flow, and letters of credit. • Long-term loans have terms of 10-to-30 years, fixed- and variable-rate options, and flexible repayment terms matched to your cash flow.

What does it mean for the Farm Service Agency to guarantee the loan? The Farm Service Agency (FSA) of the U.S. Department of Agriculture may guarantee loans through Farm Credit East to help family farmers who might not otherwise qualify for credit for farm ownership, improvement and operating purposes. Farm Credit East is committed to helping people enter agriculture, and will help you prepare and submit an application if your financial picture is not all that it could be. You must meet Farm Service Agency conditions to be approved for a loan guarantee.

What are your rates? Farm Credit East offers competitive rates. And, as an owner of the cooperative, you are eligible to participate in our patronage dividend program. For specific rates, check with your branch office.


Loans and Leases FREQUENTLY ASKED QUESTIONS What is my loan term? It depends on your situation. Some members have a revolving line of credit, which basically means they have a loan with us with no specified expiration. You and your loan officer will agree to your loan terms.

How often are my payments due? We understand that your cash flow may vary. This is why we offer flexible payment schedules to fit the needs of your business.

Does Farm Credit East finance young and beginning farmers? Helping young people get started in farming is one of our long-term commitments to Northeast agriculture. Farm Credit East provides special programs for young and beginning farmers, including, but not limited to, our FarmStart program. Each situation is different. We work with individuals to find the best program for their needs.


A VIEW FROM THE FIELD WHERE WILL THE MONEY FOR GROWTH COME FROM? The Lucas Greenhouse began in the fall of 1978, when George and Louise Lucas purchased four acres of land from her father and constructed a two-gutter connected 30-foot x 150-foot greenhouse. The business has since grown to include 770,000 square feet of heated greenhouse space and 30 acres of outdoor production, plus

“When I had to put five acres under cover in three months, I used a lender who always comes through for me. Farm Credit East already knows my business and I can count on them to keep the process simple.” – George Lucas

a garden center and one food chain. As they continued to expand to increase efficiency and respond to market needs, access to capital in a reliable, responsive way became essential.

“Farm Credit East keeps the process simple.” HOW WE HELPED As a proud lender to the greenhouse industry, Farm Credit East understands your business, its cycles and the long-term commitment you need. We do not shy away from lending capital for expansion to a seasonal business like other lenders might. We built a relationship with the Lucas family that hopefully will continue for years. “When George needs new construction, he just orders the glass and contracts for the work,” said Justin Dickey, George’s loan officer. “He knows Farm Credit East will get behind him fast, so he never worries about where the financing will come from or whether he’ll get each check right when he needs it. He knows we’ll get it done.” George Lucas, owner of Lucas Greenhouse in Monroeville, N.J. When George and Louise Lucas need to grow their business, they need a lender that knows them well enough to be responsive. They partner with Farm Credit East.

Country Living Loans Dwight Campbell, Spencerport, N.Y.

Lending for Country Living. It’s what we do. A home in the country. A part-time farm. That little piece of land that takes you away from it all. Whatever your dream, Country Living from Farm Credit East can turn it into reality. This program is designed to meet the needs of country home and rural property owners. And if you already own a country home, we offer excellent refinancing options, too.

See our website at


Rural Property Loans At Country Living, we understand the unique requirements associated with country homes, part-time farms and other rural properties. We can help you with: Purchase – You’ve found it. The perfect piece of land. Set in the woods or in an open field, where you can build your home, work your farm or just get away from it all. Now that perfect country property needs the perfect piece of financing. At Country Living from Farm Credit East, rural properties are our specialty. We don’t shy away from the special financing needs of buying land, homes and farms in the country. Refinance – You may already have your dream home in the country, but is your mortgage allowing you to get the most out of your property? By refinancing with Country Living from Farm Credit East, you may be able to lower your monthly payments, get better terms or access funds by putting the equity in your country property to work for you. Construction – Building a new home in the country can be a dream come true, but it can also be tough to find the right financing. Not every lender is qualified or prepared to consider construction on rural land, where many special considerations can apply. The mortgage specialists at Country Living will walk you through the construction process and help you develop the best financing plan possible. Our program will take you from construction to permanent financing with one convenient loan package and just one closing.

CountryHome Loans Our rural home loans were created specifically to fund homes in the country, where your property may not fit the mold for conventional bank loans. We have the flexibility and expertise to finance additional land, farm structures, construction and farm/home financing.

CountryFarm Loans We understand that no two farms are alike, and farms are different than other businesses! At Country Living, our farm financing options help you put your unique farm assets to work for you. Funding multiple parcels or nonconforming properties with unique characteristics is not a challenge for us.

CountryLand Loans Because we are farm financing specialists, our CountryLand loans were expressly designed for the bare land properties that other lenders often avoid. Whether you intend to use your land now or in the future; whether you’ll be farming it or leasing it to others; whether it’s a home lot or expansion room for your business, Country Living can offer you a highly flexible, competitively priced land loan.

CountryFlex Equity Loans CountryFlex Equity loans provide access to the equity in your farm property. Much like traditional home equity loans, these loans are revolving lines of credit that give you the flexibility to borrow what you need, when you need it – and the ability to pay it back with the same flexibility and ease. 17

Country Living Loans FREQUENTLY ASKED QUESTIONS What are the terms? • Fixed rates. 15-, 20-, 25- or 30-year terms with no prepayment penalties. • Additional savings. Choose a term of 10 to 30 years — and our closing requirements and costs are generally more flexible than those of other lenders. • We work with the property as it is. It is not a problem if there is extra land, outbuildings or even livestock such as horses or cows. • We service all our own loans. This means no automated voices when you give us a call.

Can I pay off the loan early? Yes. There is no prepayment penalty.

What about an appraisal? Appraisals can be done through Farm Credit East or through an outside appraisal company, depending on your property. Farm Credit East appraisers are familiar with the unique situations often associated with rural properties.

Will you let me know if I qualify for a loan before I apply? Yes. However, a prequalification form is not a binding commitment. It simply provides an estimate of your borrowing power so you can shop for your dream property with greater confidence. It’s that easy.

How do I apply? Our mortgage specialists will help make the application process easier than you may expect. For more information, contact us today at 800.327.6588 or online at


A VIEW FROM THE FIELD HOW CAN YOU FIND FINANCING FOR VACANT LAND? Dwight Campbell wanted to purchase a farm with enough acreage to build a home and raise his horses. He found an 80-acre property that would perfectly suit his needs, complete with a 70-foot waterfall. Luckily for Dwight, the auctioneer who was selling the property recommended he look into Farm Credit East’s Country Living loans.

“The Country Living program looks at the value of raw land. It impressed me that both the appraiser and my loan officer came out to walk the entire 80 acres with me. They are so easy to work with, and they love land.” – Dwight Campbell

“Most banks have problems financing vacant land, active farms and home construction,” said Mike Johel, Dwight Campbell’s Country Living loan officer. “But this is not a problem for Country Living.”

“ Country Living understands the value of rural properties.” HOW WE HELPED Country Living offered a way for Dwight to finance his property and future construction, with the help of experts who appraise large acreage properties. “A loan from Country Living wasn’t Dwight’s only choice,” said Mike. “But it was a good choice for him because of the products, terms, rates and relationship that we could offer him.” Our appraisal team offers expert service, appraisers with comprehensive and up-to-date rural appraisal training, the largest database of agricultural property transfers and a consistent follow-through. “If you’re looking for life in the country, that is us,” Mike said. “We can finance acreages and active farms. It’s what we do best.” Dwight Campbell, of Spencerport, N.Y. “When I called Country Living for the first time, I asked, “How much land will you finance?” Mike’s answer was, “How much do you have? Land is what we do.” 19

Financial Record-Keeping

We keep an eye on your bottom line. As an ag business owner, your financial condition and profitability depends on solid records, timely reports and sound advice. At Farm Credit East, we provide comprehensive financial record-keeping services from accounting professionals trained in ag-related rules and regulations.

Farm Credit East senior loan officer Justin Dickey 20

WATCH THE VIDEO Learn more about Farm Credit East financial record-keeping services at or on our website.

A VARIETY OF RECORD-KEEPING OPTIONS Our financial specialists will work with you to identify your accounting and record-keeping needs and then create a program for your business. We tailor our services to fit the way you do business, whether at your operation or from our office. Options include: • Mail-in service. You provide us with your basic income and expense information (check, deposit and payroll data). We will prepare and return management, tax and financial reports. • On-farm accounting. The ideal solution if you need an on-site bookkeeper without the full-time expense.


Our specialists will enter your income and expense

• Profit & loss statements

data, develop custom management and tax reports, and

• Balance sheets

provide a regular analysis.

• Monthly reports on cash flow, cash summary, payroll, debt status, investments and savings

• CenterPoint Accounting Software. An application ®

from Red Wing that handles complete financial reporting for just about every accounting need from check sheets and management reports to printing invoices

• Tax planning and cash flow worksheets

and handling basic payables and receivables.

• Capital assets

writing, check reconciliation, basic payroll, balance

• Software support. Regardless of the record-keeping software you select, we can work with you to ensure your records are accurate and up-to-date.

• Selling of assets • Year-end reports for tax preparation including W-2 forms

Depending on the size and nature of your business, we can customize services to meet your requirements.

SCHEDULE A FREE REVIEW It is important to the health of your business to know how well you are complying with ag-related rules and regulations. Call one of our records specialists today to learn how we do our job, so you can do yours — a job we value, because we are you.


Financial Record-Keeping FREQUENTLY ASKED QUESTIONS What are my responsibilities as a customer? If you contract with us for record-keeping services, you’ll be required to pass accurate information and receipts to us on a regular basis. We will then provide professional record-keeping and reporting for your taxes and assist you with business planning.

How will record-keeping help me financially? The reports that Farm Credit East provides will give you an accurate financial picture of your business and better information for your decision-making. Plus timely, well-prepared records aid effective tax planning, which can help to minimize your tax burden. A better record-keeping system is a major step toward improved profitability.

Will you work with my current bookkeeper? We are willing to do on-farm visits to review your financial records with your bookkeeper who may be busy with the day-to-day tasks of paying bills and recording entries. Farm Credit East can review the bigger picture and provide additional support.

What is the cost? We charge by the number of hours needed and the complexity of your operation. Our records specialist can give you an estimate after discussing your current records and your record-keeping needs with you. Most often, we quote an annual fee for this service. If you are not happy with our service, we have a satisfaction guarantee.


A VIEW FROM THE FIELD A SEAMLESS TRANSITION The Kurtz family operates Kurtz Farms, a successful wholesale greenhouse business located in Cheshire, Conn. When their accountant moved to Florida a few years back, they were in need of someone to take over their records, but didn’t want the burden of bringing an accountant up to speed on the intricacies of their agricultural business, so they called Farm Credit East.

products and are able to answer my questions. HOW WE HELPED Earl has been pleased with the relationship he’s formed with Farm Credit East. “It’s been great to work with folks who understand what a farm is all about and how accounting principles apply to agricultural products,” he said. “I can ask questions and they can provide informed recommendations.” As Earl looks towards the future, he foresees working with Farm Credit East to evolve the business. “Through our records relationship, Farm Credit may identify a need or an opportunity for improvement in our business and as we move forward we’ll work with them to get it done.”

Earl Kurtz, of Kurtz Farms LLC in Cheshire, Conn., turned to Farm Credit East to ensure his records stayed accurate and up-to-date.


Farm Credit East, they understand how “ Ataccounting principles apply to agricultural

Tax Planning and Preparation

Don’t pay more taxes than you should.

Farm Credit East customer Ron Robbins of North Harbor Dairy in Sackets Harbor, N.Y. 24

WATCH THE VIDEO Learn more about Farm Credit East tax services at or on our website.

Tax Planning Long-term planning with a tax specialist knowledgeable in your specific ag business can mean significant savings when it comes time to file your returns. The tax experts at Farm Credit East are up to date with the tax laws affecting businesses like yours. Our specialists can address virtually all your business concerns and are available to you throughout the year to analyze and discuss year-to-date activities, tax saving strategies and the tax consequences of every business decision. They will work with you to ensure you are not paying more than you should and to help forecast your end-of-year tax liabilities.



• Marriage, retirement, purchasing a home, etc.

There are several ways to realize all the deductions you

• Starting a new business

are entitled to, including:

• Income and expense analysis and projections

• Business organization. For example, operating as a partnership may offer more tax savings than operating as a sole proprietor. • Family tax planning. Hiring family members to work in the business could reduce family tax liability. • Fringe benefits. Setting up retirement plans, medical plans and other fringe benefits could mean attractive

• Major purchases, sales and investments, leases • Depreciations • Selling of assets • Organizing farm records • Capital expenditures

tax deductions for many businesses.

SCHEDULE A TAX REVIEW A Farm Credit East tax specialist will discuss with you all the circumstances surrounding your business — and your life — which could have an effect on your business’ tax situation. Topics, such as income, expenses, major purchases, investments, depreciation … even marriage or retirement. Our advisors are experts in ag tax laws and will work with you to plan for the most beneficial tax arrangement for your business.


Tax Planning and Preparation Tax Preparation As experts in agricultural taxes including local, state and federal laws, a Farm Credit East tax specialist can take a look at your situation and provide you with specific advice that will help you capture every deduction that the law allows. Agricultural businesses are subject to a variety of tax laws, deductions and requirements that may not be


familiar to non-specialized advisors and tax preparers.

FREQUENTLY OVERLOOKED TAX PROVISIONS Tax preparers unfamiliar with ag tax laws often overlook deductions and other benefits to which ag business owners are legally entitled. Here are six benefits often mis-

• Sole proprietor with schedule F or C

handled by nonfarm tax preparers:

• Partnership

1. Depreciation. Has the optimum amount been taken?

• S-corporation and C-corporation

2. Prepaid farm expenses, such as feed and supplies.

• Fiduciary (for estates and trusts) • Part-time farmers and fishermen • Payroll tax reporting • Sales tax reporting • Gift taxes • Amended returns • Sales and gasoline tax refunds

3. Special credits, such as targeted job credit, rehabilitation credit, earned income credit and investment credit. 4. Tax benefits that cannot be taken in one year, but can be carried over to another year (investment credit, net operating loss). 5. The sale of assets on Schedule F. Many preparers report these sales, which forces farmers to unnecessarily pay self-employment tax on the income. 6. The tax considerations of various business structures (partnerships, S-corporations, C-corporations).

• Retirement plan reporting Using a Farm Credit East tax specialist ensures that you’ll receive your correct deductions and allowances while avoiding penalties for failing to meet any special requirements. Call one of our tax specialists today to learn how we do our job, so you can do yours — a job we value, because we are you.


FREQUENTLY ASKED QUESTIONS Tax Planning When should I call Farm Credit East? We suggest you consult with a Farm Credit tax planner well in advance of filing your tax return. It’s also a good idea to talk to us when you’re considering a change in your business.

Are my records confidential? You can be assured that the financial information you give to your Farm Credit East tax specialist is strictly confidential. If you borrow from us, you decide whether your loan officer may see your tax records.

What is the cost? We charge by the number of hours needed for tax planning. The cost of our service is dependent on the complexity of your operation. Your tax specialist can give you an estimate after discussing your tax planning needs with you. If you are not happy with our service, we have a satisfaction guarantee.

What are my responsibilities as a customer? You are responsible to work with Farm Credit East to ensure that your tax deadlines are met. This means holding regular conversations with your tax specialist and regularly updating your records. Also, you will need to make up-to-date records available to your tax specialist to accurately plan for your future. We can help with your record-keeping needs as well.


Tax Planning and Preparation FREQUENTLY ASKED QUESTIONS Tax Preparation Am I eligible for Farm Credit East tax preparation services? You do not need to borrow from us for us to prepare your taxes. You are eligible if you are an individual or enterprise involved in agriculture, fishing and aquaculture, as well as timber, nursery, greenhouse, vineyard and similar operations. Managers, employees and part-time farmers may also use Farm Credit East tax preparation services.

What are my responsibilities as a customer? You are responsible to help us meet the tax deadlines. This means holding regular conversations with your tax accountant and regularly updating your records. Also, you are responsible for having accurate records so that at tax time we have all the correct information needed to properly file your returns.

What happens if I get audited? Farm Credit East is willing to represent you in an audit. We will prepare the reports and help you navigate through the process.

What happens if a mistake is made? We will work with you to correct the mistake. If it is our mistake, we will pay any penalties that may occur. If it is due to misinformation, we will work to correct the issue with you for the future and minimize the current penalties.

What is the cost? We charge by the number of hours needed to file your tax return. The cost of our service is dependent on the complexity of your operation. Your Farm Credit East tax specialist can give you an estimate after discussing your tax return with you. If you are not happy with our service, we have a satisfaction guarantee. You tell us what the service was worth to you and pay that price.


A VIEW FROM THE FIELD A SMOOTH TRANSITION Ron and Nancy Robbins own an 800-cow dairy farm, 6,000-acre crop operation and busy agritourism business called Old McDonald’s Farm in Sackets Harbor, N.Y. Already busy operating these diverse businesses, the Robbins hired a tax preparer to file their taxes. But the preparer was not timely. The Robbins’ wanted to change, but they were concerned about the time needed to build a new relationship. They turned to Farm Credit East, where they already were a borrower.

“Farm Credit East helps us make the best decisions for our business.” HOW WE HELPED Ron was shocked at how easy it was to work with his local Farm Credit East tax preparer, Mark Kellogg. Ron came to us for the tax preparation service, but left with much more. He gained an accurate and timely tax return and a team of financial experts. Now he doesn’t have to explain to his loan officer what his accountant did or what his tax planner said. Instead, at Farm Credit East, he works with knowledgeable experts in all aspects of business financial services.

“Mark’s understanding of our businesses as well as current tax laws has been advantageous to our operation. It was easy to switch to Farm Credit East to prepare our taxes and get help with tax planning. Mark knows current tax laws so we rely on his advice for the tax implications of business options that we may be considering, which helps us make the best decisions for our business.”– Ron Robbins

Ron and Nancy Robbins on North Harbor Dairy in Sackets Harbor, N.Y. They rely on Farm Credit East for timely tax planning and preparation as well as for the tax implications behind various business decisions. 29

Payroll Services

Assuring a hassle-free, trouble-free payroll. No business is too small or large to benefit from professional support for their payroll services. Whether you have five employees or 50, seasonal or year-round, ag-specific payroll services from Farm Credit East can help you achieve trouble-free payroll periods and eliminate the hassle and technicalities of payroll processing. Our specialists stay up-to-date on farm payroll regulations and filing deadlines, and can keep your payroll timely and accurate, allowing you to focus on the job you love, a job we value, because we are you. Farm Credit East customer Darla Schwab of Schwab Dairy Farm, Delevan, N.Y.

WATCH THE VIDEO Learn more about Farm Credit East payroll services at or on our website. 30

Service options range from complete payroll processing to professional support for you and your staff, including: • Payroll management. You simply mail, email or fax to us, and we’ll complete all payroll record-keeping functions, tax calculations and deductions, paycheck writing, printing of quarterly reports and payroll summaries and processing of IRS W-2, W-3, 940, 941 and 943 forms and state forms. • Weekly, biweekly or semiweekly payroll processing • Monthly or quarterly payroll tax filing • Year-end tax filing (including W-2 preparation) • Seasonal or year-round payroll processing • Direct deposit options • Payroll time clock options • H-2A reporting • On-farm software support • Agricultural software from Red Wing handles basic payroll. • Software support is available.

FLEXIBLE, AG-SPECIFIC PAYROLL PROGRAMS We specialize in processing payroll for all types of farming, fishing, green and forest products businesses. So we are experts in the complications of various types of exemptions, record-keeping and filing requirements that agricultural and ag-related businesses may have. We can provide:

• Payroll software • Can submit your basic payroll online • Customizable solutions to fit your needs

• Payroll for H-2A, seasonal and part-time employees • Overtime pay processing

Complete processing, filing and record-keeping. We complete all payroll record-keeping functions, tax calculations and deductions, paycheck writing and/or direct deposit, processing of quarterly reports and payroll summaries. We will process IRS forms W2/W3, 940, 941/944 and 943, as well as all state forms. A coordinated approach. Our experienced payroll and software specialists are part of a team of agricultural

• Unemployment tax processing • Multi-state tax prep and reports that conform to all state-specific regulations • Local income tax filings • Child support deductions via check or electronic transfers

finance experts who understand the special accounting, tax, record-keeping and payroll considerations of rural and family-owned businesses. We are up to date on all current farm payroll rules, requirements and filing deadlines, and can help you to develop a more coordinated and informed approach for managing your business.


Payroll Services FREQUENTLY ASKED QUESTIONS I am concerned about switching my payroll provider mid-year. Will this cause confusion for my employees or require too much of my time during my busy season? Change does not always come at a convenient time. The main benefit of switching is to have your payroll in good hands as soon as possible before anything falls through the cracks — such as labor hours, which are at peak during your busy season. With your permission, we can contact your current provider for year-to-date data. In addition, we provide services right at your place of business, which makes the transition easier for you and requires less of your time.

What if I prepare our payroll myself or use another processing service? Why would I want to switch to your service? It’s important to evaluate how well you (or your processing service) keep up with agricultural payroll rules and regulations. To find out, one of our ag payroll experts can review your needs and existing services and make a recommendation. We find that many of our customers prefer to focus on the day-to-day operations of running their agricultural businesses. Others are frustrated trying to keep up with ever-changing payroll rules, regulations and forms as well as demanding deadlines. Assuring trouble-free payroll while moving this responsibility off your plate may best be accomplished using payroll specialists who work exclusively with agricultural businesses, as ours do. Another advantage: Our coordinated team of farm business experts can help to make the preparation of your financial records, income taxes and payroll more efficient.

Do payroll specialists receive extra payroll-related training? At Farm Credit East, all payroll specialists take courses on agricultural payroll and must pass a test before they can provide this service to customers.

Is my business too small to use Farm Credit East’s payroll service? No business is too small. At Farm Credit East, we are committed to the success of all farms regardless of size. And we prepare payrolls for businesses of all sizes. Some operations have more than 100 employees while others have just one.


FREQUENTLY ASKED QUESTIONS Do I save money by having you process my payroll biweekly or weekly? Yes, you do. We have a per-pay-period base charge and a per-check (transaction) charge. With a biweekly pay period, you have half the number of checks and pay periods. Certain state labor laws require waiver approval for paying other than weekly. We are happy to assist you with this process if you do not have the required approval. Please note: H-2A labor may have weekly filing requirements, which we would confirm with your applicable liaison/state agency. Quarterly and annual filings remain the same.

Can you help with worker’s compensation audits? We provide the reports needed for worker’s compensation audits. We can also customize your payroll setup and reports to match your audit classifications, which can help make your audit process fast and accurate.

What is the turnaround from the time that I submit my payroll information to you? We assign a processing day for you based on your needs and process your payroll the same day that we receive your information. We send your payroll package, including paychecks, to you or, if you prefer, you can pick up your employee paychecks at your local Farm Credit East office. Please note: Direct deposit of employee pay does require an additional business day.

Do all my employees have to have direct deposit? Not at all. Your employees can choose to receive their pay through direct deposit or by check, within the same payroll. In fact, your employees can have multiple direct deposit accounts (up to three) or check and direct deposit to savings.


Payroll Services FREQUENTLY ASKED QUESTIONS Will you print employee checks? We customize our payroll service according to what each customer would like and what’s best for each business. For example, we can print checks, make direct deposits and automatically debit your bank account for all payroll taxes. Or, if you prefer, we will print payroll stubs for you, and you can write the checks.

Will you process/pay liabilities? Absolutely. We comply with electronic tax payment requirements for the IRS as well as your state(s). And if you prefer to remit your payment by check, we will print liability checks for any requirements that do not need electronic payment. We also assist with payroll deduction payments, such as retirement plan payments, employee tax levies, etc.

What are my responsibilities as a Farm Credit East payroll customer? You submit your payroll data in the method that works best for you, such as calling, faxing or emailing the information to your Farm Credit East office. You also submit required payroll information for each new employee along with wage or deduction changes. Good communication with your personal payroll specialist creates a smooth, timely process.

Who do I talk to if my payroll specialist is out sick or on vacation? We keep specific instructions for each and every customer with their records just for such occasions so another payroll specialist will be ready to help. In fact, we have backup for every Farm Credit East payroll specialist with established protocols for ensuring that all client payrolls are delivered on time, whether it’s a hot, hazy Friday afternoon in July or the day before Christmas.


A VIEW FROM THE FIELD WHO NEEDS ANOTHER JOB? Jason Schwab and his mother, Darla Schwab, were busy enough milking 800 cows, raising 700 heifers, farming 2,000 acres and building a new gravel business as a side enterprise. Payroll processing was the last thing they needed to handle. As owners and managers of Schwab Dairy Farm in Delevan, N.Y., they needed to stay focused on three milkings a day and producing a

“Just the efficiencies and the payroll paperwork that Farm Credit East takes care of for us make our lives easier.” – Darla Schwab

26,000-pound herd average.

“ We could have been hit with a huge penalty if we made a mistake or were just a day or two late submitting our payroll tax.” “I used to prepare our payroll when we had three employees and three partners,” said Darla. “And, even then, I found that keeping up with ever-changing rules, regulations and forms was more than challenging.”

HOW WE HELPED The Schwabs now fax a summary of hours every pay period to their Farm Credit East office and receive their hourly employees’ payroll checks the following day. “The checks are never late,” Jason notes. “Farm Credit East also prepares all our payroll reports for us. And if we are ever audited, we wouldn’t need to deal with it, because they would take care of it for us.”

SPINOFF BENEFITS Along with payroll, Farm Credit East manages deductions for a new retirement plan, providing a check for the plan manager and a spreadsheet for tracking employee-specific contributions. Also, we can now provide labor expense summaries and other reports as needed. “Recently, we asked Farm Credit to provide a summary of our

Darla and Jason Schwab, owners of Schwab Dairy Farm in Delevan, N.Y., turned to Farm Credit East to avoid risking penalties while processing their own payroll.

labor expenses for each area of our businesses, such as for crops, shop, dairy and maintenance. It is nice to be able to make one phone call and get a special report like this the following day.” 35

Consulting for Business Success

Business as usual is no longer an option. As the saying goes, if you fail to plan, you plan to fail. In recent years, some farm businesses have struggled to adapt to market headwinds, while others have enjoyed record profits. The difference between the two lies in the ability to proactively adapt to the “new normal.” In short, an effective manager’s primary tool is their ability to continually adjust their business. A Farm Credit East consultant can help you get the best return on your business. Our consultants have sat across the kitchen table from thousands of farm families, working to resolve a variety of their concerns, from estate planning and business transfers to human resource management issues. We can help you decide whether to undertake a new venture, relocate, set up or dissolve a business. Most importantly, we can help you plan your estate to best meet your family’s needs and minimize settlement costs. When you’re in agriculture for keeps, it’s good to know a consultant who is too.

CONSULTING BASED ON HOW YOU WORK Our consultants develop unique working relationships with each client based on your business objectives and how you like to work on any specific aspect of business management. Below are some common consulting formats: • Project basis: Very often, our consultants work on individual projects, such as developing an estate plan with a client. • Ongoing consulting: Many clients prefer a continuing relationship with their consultant. In most cases, your consultant visits your operation every quarter to discuss your financial picture, with telephone contacts in between. Other clients choose monthly or year-end visits. • Group consulting: A Farm Credit East consultant can conduct training right at your place of business. They can customize a program for your family, employees or customers on virtually any topic, such as business management, labor relations, communication skills or problem-solving.

WATCH THE VIDEO Learn more about Farm Credit East consulting services at or on our website. 36

IMPROVING PROFITABILITY Some farm businesses enjoy record profits while others in the same industry struggle and fall behind. The difference maker is aggressive managers who use business tools to effectively adjust their business model to manage risk and improve profitability. A Farm Credit East business consultant will help improve your profitability by working closely with you to analyze your business from many angles and pinpoint methods for improving your bottom line, including the following: • Business planning Are you evaluating the feasibility of an expansion, diversification or other addition to your current operation? Perhaps you are starting a new business and would like a business consultant to walk you through a business plan or evaluate what you have already projected. Your consultant will look at your farm’s financials over a four- or five-year period so that together you can assess the business’s trends and use that information to build a usable plan. Your consultant will help you put a monitoring system in place so you have practical advice to help make decisions about the direction of the business. • Estate and retirement planning Our consultants help you navigate issues related to family gifting and retirement planning through a consensus-building process with your family. Timely estate planning can also help you improve your tax liability dramatically. Developing a plan now will ensure that your business and personal assets remain within the family. • Family business transition consulting When transferring the family farm from one generation to the next, family members must deal with a maze of business matters, tax implications and emotional issues. Farm Credit East has provided consulting services for many generations of farm business transfers. • Business continuity consulting Business continuity is critically important when you transfer your farm business to another generation. There are various ways to organize your business, from a sole proprietorship to a corporation; our consultants know how to clarify these options for farmers and their attorneys. • Profit Analyzer Your Farm Credit East consultant will work with you to monitor the progress of your actual business results against budgeted, planned business metrics and also help you to define ways to enhance your business profitability.


Estate Planning

Creating certainty for your family. No one knows what tomorrow will bring. But if you delay planning for it, you could leave your family with confusion and conflicts rather than the proud legacy you’ve worked so hard to achieve. Farm Credit East business consultants have helped thousands of Northeast farm families achieve their estate planning goals and add more certainty about their future in the process.

Farm Credit East customers Keith and Monika Mann, of Mann Farms, Inc. and Orcranics, LLC in Buzzards Bay, Mass.

WATCH THE VIDEO Learn more about Farm Credit East consulting services at or on our website.

WHY ESTATE PLANNING IS IMPORTANT Planning well in advance for the future of your estate accomplishes many objectives, including the following: • Ensures that your assets will be used to benefit the people you choose • Protects your family from difficult, costly or even heartbreaking outcomes • Can ensure a comfortable retirement for you and your spouse • Lays the groundwork for the next generation to take the reins • Provides certainty for your farm and, more importantly, for your family

DEMYSTIFYING THE PROCESS Planning for the future doesn’t have to be complicated or intimidating. Our business consultants break the process down into manageable pieces. Some families start the process thinking that it will be overwhelming, but by working closely with a Farm Credit consultant, your family can build a plan that will provide peace of mind. No matter what happens, you can be assured that your loved ones will be taken care of.

SORTING OUT SENSITIVE ISSUES Any business or estate plan involves many factors: finances, insurance, legal documents and personal feelings. Our consultants are skilled at asking the hard questions, such as how to treat off-farm children equitably, how to protect a farm from an impending divorce or how to select a next-generation successor for the farm. We are able to speak dispassionately with family members, which allows us to move the process along and put each member at ease.

NOT A ONCE-AND-DONE TRANSACTION Estate planning is not a one-time event. Businesses are dynamic and evolve year by year. Estate tax laws change. People get married or divorced or become disabled. Babies are born. Children return to the farm after college with ideas for improving the business. After implementation of a plan, the next step is review. We will review your plan with you annually so we can help keep your plan on track.


Estate Planning WEIGHING HEALTH CARE COSTS Of course, the 900-pound gorilla in the room is how the cost of health care for the senior generation fits into estate planning, retirement planning and transitioning the business. We will help you understand the implications of Medicare and will discuss the limited coverage and strict qualification requirements for Medicaid.

ALL YOUR TRUSTED ADVISORS AT ONE TABLE Other professionals whom you trust are welcome to participate in our estate planning process so that you can ensure that everyone servicing your business is working toward the same goals. This collaborative approach will also help you understand how many of your decisions are interrelated. Additional participants often include life insurance agents and lawyers. For our part, we bring Farm Credit East tax specialists, appraisers or your loan officers to the table as needed.

FAMILY BUSINESS TRANSFERS We focus on ensuring that the senior generation has adequate income or assets for retirement. Some customers are so accustomed to making sacrifices for the next generation that they believe they can live on less income than they need. We will work with you to make an honest assessment of what you will need in retirement with a safe margin, so you don’t sell your retirement years short. • We help families develop a successor by utilizing the Farm Credit East GenerationNext training program. • Continuity of the business is a key aspect of every plan. We help families maintain their business legacy for future generations as well as their favorable reputation in the community. • Much of the transfer process revolves around a definition of each family member’s personal responsibility. This gives each member a stake in the future of the business and an understanding of their role in the planning process.

DON’T GAMBLE WITH YOUR LIFE OR YOUR LEGACY Call your local office to learn more about how a Farm Credit East consultant can help your family achieve its estate planning goals and increase your certainty about your business’s future in the process.


FREQUENTLY ASKED QUESTIONS When should I begin estate planning? The sooner a family initiates the process, the easier it is. Beginning early allows you the time to accumulate the dollars required for the senior generation’s retirement without harming the future of the business. Ideally, you want to begin planning when you are around 55 years old and your children are in their 20s. This gives you a 10-year window to transfer assets and management. At 65, you will be easing into retirement and your children, at 35, will have gained the skills to manage the operation. We encourage people to take a leisurely approach to estate planning.

How does a consultant work with our family on estate planning? A Farm Credit East consultant creates an environment of mutual expectations so your estate plan will be successful. We ensure that each player has a chance to help the owner make choices about what he or she wants to implement. We organize consistent meetings and check in to see that each participant accomplishes their specific responsibilities so as to be sure that the plan is implemented as expected. Managing consistent meetings on a timely basis and ensuring that we arrive at clear conclusions offers tremendous value in moving the process forward.

Does transferring a business to the next generation also mean the transfer of control? The transfer of equity doesn’t necessarily mean the transfer of control. Our consultants will discuss many options with you so equity can be moved to the next generation without the senior generation giving up control in the business.

Who should do estate planning? Estate planning is essential for all business owners. We help families with various levels of net worth create an estate plan so they can leave assets to the next generation. By working with a Farm Credit East consultant, you will develop a plan that ensures that the senior generation has a comfortable retirement by first determining a realistic view of their retirement needs, including the cost of health care and how nursing home care will be paid.


Estate Planning


A VIEW FROM THE FIELD HOW DO YOU CREATE A FAIR ESTATE PLAN FOR THE WHOLE FAMILY? Keith and Monika Mann know well the complexities of estate planning, particularly with a large family. “Running a business with family is difficult, because you have siblings who are not involved but need to be treated fairly,” said Keith. “Also, my father, who developed the farm in his lifetime, wants to ensure that it stays in the bloodline. And my wife, who committed her married life to this farm, wants to be protected. That’s a lot of juggling.” The Manns wanted to create future plans for their two businesses that were equitable; but with so many stakeholders, the challenge was daunting.

“Our estate plan wouldn’t have gotten done without Farm Credit East.” HOW WE HELPED The Mann family found an independent voice, as well as a wealth of knowledge regarding estate planning, in Farm Credit East consultant Jon Jaffe. “Jon helped us get to the bottom of issues, come up with a plan and ensured that the plan was followed. You need all three of those components for an estate plan to succeed,” said Keith.

“With estate planning, it’s nice to have an outside professional in the room. When a family member asks the tough questions, Farm Credit East provides an independent voice that helps us come up with a plan that is fair.” – Keith Mann

Jon helped the Mann family navigate through the personal process of estate planning by drawing on his years of professional experience with ag businesses. “Our estate plan wouldn’t have gotten done without him,” admitted Keith. “I feel good knowing that a professional agrees that this is a fair plan.”

Keith and Monika Mann, owners of Mann Farms, Inc. and Orcranics, LLC in Buzzards Bay, Mass. “I’m running the farm, but my family wants to know how I’ll protect them,” said Keith. “Farm Credit East helped me do that.” 43

Financial Benchmarking

Customized management review guided by a business consultant.

Stephen McKnight, co-owner of River-Breeze Farms in Chase Mills, N.Y. 44

WATCH THE VIDEO Learn more about Farm Credit East financial benchmarking at or on our website.

Some farm owners are often so busy working in their business that they can’t work on their business. Consequently, Northeast farmers leave tens of millions of dollars in profit on the table each year and fail to earn what they should for all of their hard work. At Farm Credit East, we are passionate about providing Northeast farms of all sizes and types with the business tools required to become more profitable. One of our most powerful tools in this regard is our financial benchmarking program. We offer four benchmarking programs: • Dairy • Agricultural Retail • Winery • Green Industry

WHAT IS BENCHMARKING? At Farm Credit East, benchmarking is a process that allows you to collaborate one-on-one with a Farm Credit East consultant. Working together, you will: • identify areas of your business that are holding you back • compare your business to industry peers • develop an action plan based on your business’s data • identify ways to increase your profitability

COMPREHENSIVE MANAGEMENT REVIEW GUIDED BY A BUSINESS CONSULTANT A Farm Credit East benchmarking program is a unique way to evaluate and continually improve the operational and financial management of your business. You will gain access not only to invaluable information and insights, but to a business consultant who will help you use those insights to improve the profitability of your business.


Financial Benchmarking Participation in a benchmarking program delivers an objective view of your operation by comparing your financial and operational data both to industry standards and to data supplied by other successful producers within your industry. The in-depth analysis of this data results in findings that are then personalized to your business. One of the most important aspects of this process is the assistance you receive from a Farm Credit East consultant, who will visit your business, review the findings with you and offer constructive feedback and planning advice. Participants use the insights, examples and data they receive to continually improve their operations.

HOW BENCHMARKING WORKS • Data collection. A Farm Credit East benchmark specialist will work with you to compile data that profiles many aspects of your business, including profitability, customer counts, employee compensation and benefits. • Data analysis. We will incorporate your results with data from other operations in your type of business to illustrate how your business compares to others of similar size, scope, profitability level and geographic area. • Benchmarks report. You will receive a customized, in-depth report that gives you a comparative snapshot of your business ­­— a report card that details how your business differs from your competitors’ in profitability, sales per customer, net profit per days of operation, labor costs and more. With this report and insights from your consultant, your management team has the tools to determine how and why your business is different, and whether those differences are positive or need to be worked on. • Comprehensive seminar customized to your unique group. You’ll hear presentations on targeted management topics and get answers to your questions. You will also join forces with other business operators to gain a better understanding of your industry and explore practical solutions. • Gain focus, take action. Following the seminar, a Farm Credit East consultant will visit your business to review your personal benchmark results in detail with you. This is your opportunity to work on your objectives and pick up a personalized action plan on how improvements will impact your bottom line. • Program extras. You can also enjoy networking opportunities, small group meetings on special interests, webinars and access to a members-only community.


FREQUENTLY ASKED QUESTIONS Who participates in the benchmarking programs? The benchmarking programs are customized for successful and progressive owners of dairy, ag retail, winery and green industry businesses who are focused on achieving maximum results. Large and small operations are encouraged to participate.

How do I report data? Before the seminar, you will complete a worksheet that profiles many aspects of your business, from income to production. Your Farm Credit East consultant, loan officer or records specialist will sit down with you to complete the worksheet in your office.

What reports will I receive? At the seminar, you will receive copies of your personal benchmarks report that will focus on your business and offer a wide range of useful reports — from a comparative earnings statement to operations analysis. • Balance Sheet • Cash Flow Summary • Comparative Detail Expense Analysis • Comparative Earnings Statement • Compensation and Benefits for Key Employees • Equipment Analysis • Financial Ratios Summary • Regional Benchmarks • Size and Efficiency Factors • Your Comparison to Other Businesses of Your Size


Financial Benchmarking FREQUENTLY ASKED QUESTIONS How would I use this program? Business owners enter the program with lots of questions about improving their operation, including … • How can I decrease labor expenses? • How does my business measure up against other top businesses? • How do I know when — or if — it is time to expand my operation? • Are my employees’ compensation packages competitive? • I had a large amount of shrink last year. Why? … and they leave with answers.

Do you need to be a Farm Credit East member? No. While many Farm Credit customers participate in our benchmarking programs, it is not necessary to have a Farm Credit East loan to participate in one.

Stephen McKnight, of RiverBreeze Farms in Chase Mills, N.Y. When Stephen and his family are faced with difficult management decisions regarding their dairy farm, they turn to their benchmarks report for good strategy.


A VIEW FROM THE FIELD HOW CAN YOU BE SURE THAT YOUR DECISIONS ARE INFORMED? Stephen and Mary Lou McKnight own and manage River-Breeze Farm in Chase Mills, N.Y., along with their son, Travis, his wife, Natalie, and their son-in-law, Steven Billing. As a strategic manager, Stephen believes in using more than his gut when it comes to making decisions for his business. For example, when faced with the choice of purchasing custom-raised heifers or raising their own, he would rather let the numbers do the talking.

“ Farm Credit East brings our business to the next level.” HOW WE HELPED For several years, Stephen and his family have worked closely with Farm Credit East consultant Mark Mapstone as part of the Dairy Benchmarks program. Not only does benchmarking allow Stephen to chart his business’s strengths and weaknesses from year to year, it also shows him where he stands in relation to the competition. “We base many of our decisions on where we stand in the industry,” he explained. “For example, we recently started raising our own heifers, based on our benchmarks report. We compared our profitability with those in the industry and worked with Mark to make a decision that was right for us.”

“We don’t hire Mark to be our cheerleader. We want him to dig in to find our weaknesses and point out where we can advance our business. The benchmarking program is invaluable in doing this analysis.” – Stephen McKnight


Grant Writing

We position our clients to succeed.

Ron Gruschow, owner of Sunny Knoll Farms in Lima, N.Y. 50

WATCH THE VIDEO Learn more about Farm Credit East grant writing at or on our website.

Farm Credit East offers grant-writing services to help farms and agribusinesses grow, change or expand their enterprises. From our years of ag development experience, we find that both public and private sector entities are very interested in supporting agriculture and helping the industry grow and change. We therefore look for grant resources or other economic development incentives that will help our clients succeed. We first determine if a grant program applies to your project. Public entities have specific objectives that they try to achieve when offering grants, and they often have relatively narrow and specific requirements. Matching the appropriate program to a producer’s activity or investment is a key part of the equation that we do well.

TYPES OF GRANTS WE WORK WITH • Value-added producer grants • Economic development programs • Energy-related grants • Special state programs As two examples, value-added producer grant programs help producers turn the raw material that they grow

OUR SERVICES • Locate economic development incentives and/or public and private sector grant programs that apply to your goals • Write grant applications that: • articulate your project’s story and its benefits effectively • determine a grant’s applicability to your objectives • meet the application’s objectives and requirements

• Prepare a feasibility study for programs that require one

into a value-added product. In addition, we work with economic development agencies at the state and local levels to find funds for farms that are adding jobs or developing a value-added business that will add jobs to the local economy. We have written a multitude of grants, so we understand program requirements, and we also know where to look to find additional funds. Many grant requirements involve a feasibility study, which we will prepare as we help you tell the story of what you are trying to achieve.


Grant Writing FREQUENTLY ASKED QUESTIONS What does this grant-writing service cost? The cost varies based on the number of hours required to complete the grant application and its related reports. Our goal is to not go over the threshold of 5 percent of the expected grant return.

Will I get billed even if I don’t get the grant? Yes. Our team is skilled and in demand; their time has a value, as does yours.

When will I know if I get funded? That depends entirely on the funding entity and their process for scoring and announcing awardees. It can range from a few weeks to several months.

What is your track record for receiving grants? It varies depending on the program and, more importantly, on the quality (preparedness, detail, eligibility for program) of the project and the skills and experience of the grant writer. You are investing based on both of these factors. If we don’t see reasonable opportunity for success, we won’t take on your project.

What do you need from me, and how much time will it take me to provide it? The success of a grant request is largely based on the applicant’s preparedness to apply for a grant, which is the product of your thorough understanding of your project mission and objectives. A successful grant request requires a well-thought-out business plan (either on paper or in explanation), plus a drive to succeed and a minimum of funds to provide the required match.

Ron Gruschow, owner of Sunny Knoll Farms in Lima, N.Y. It is important to the Gruschows’ farm that they take advantage of grant opportunities. Their partnership with Farm Credit East provides them the expert assistance that they need to do so. 52

A VIEW FROM THE FIELD WHO CAN HELP YOU GET THE GRANTS YOU NEED? Ron Gruschow and his family recently added acreage to their upstate New York farm, increasing grain storage for corn, wheat and soybeans. Ron wanted to apply for a grant from National Grid that would help upgrade his farm to 3-phase electric service. He also wanted to identify other grant opportunities that may be available. However, Ron found the grant-writing process to be time-consuming and labor-intensive, and was hoping to find expert assistance.

“Farm Credit East’s grant expertise is second to none.” HOW WE HELPED Farm Credit East provides its customers with informed grant-writing assistance. Ron worked with one of Farm Credit’s advisors Nathan Rudgers to navigate the application process and secure the 3-phase power incentive grant he had hoped to get. Additionally, Nathan helped Ron successfully apply for a grant through the USDA Renewable Energy for America Program. The result? Ron was able to save 25 percent of the cost of his farm’s new grain dryer system. “The time frame we had to apply for these grants and have our new grain facility running was limited,” said Ron. “Without Nathan and Farm Credit East, the grants would have passed on to somebody else. Nathan is one of my trusted advisors.”

“The paperwork and online process for grant applications is enormous. Farm Credit East worked with me every step of the way.” – Ron Gruschow


Management development for today’s young business leaders.

Kevin and David Bittner of Singer Farms in Appleton, N.Y.

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When it comes to managing a farm operation, you’re called upon to master many aspects of your business, from motivating employees to understanding a balance sheet. Join our farm business consultants and your fellow young farmers in GenerationNext, a series of seminars hosted by Farm Credit East and designed to advance your management skills and business knowledge. Each seminar includes group discussions, idea sharing and opportunities to network. In addition to each seminar, you’ll receive a self-paced computer-based course that supports the fundamental skills covered by the program as well as a take-home portfolio filled with handouts and worksheets. You will also receive assigned materials to help you prepare for the following seminar.

WHO SHOULD ATTEND? GenerationNext is optimal for those people, ages 20 to 35, who will be the next generation operators of a family business. By participating in this program, you will be able to: • Identify areas for personal growth and development • Acquire tools to help manage an agricultural business • Network with other young industry leaders

SAMPLE AGENDA Day 1: Becoming a better boss, coach and mentor • Leadership • Team building • Effective communication • Problem solving Day 2: Using financial records to manage and develop business goals • Interpreting and understanding financial records • Using financials to test and achieve goals • Budgets • Inventory management • Capital investment Day 3: The third seminar is tailored to each participant group. Possible topics include: • Customer service • Marketing • Pricing • Risk management • Dealing with change • Business plans


GenerationNext FREQUENTLY ASKED QUESTIONS I’m new to agriculture. Will I be able to keep up with the discussions? GenerationNext focuses on business and financial management for agricultural operations. Class discussions are more about the dollars and cents aspects of ag businesses than about plants or cows. Discussion is tailored to the skills and needs of each class. You can expect intermediate or college-level instruction, but no prior knowledge of financial terms is necessary.

I’m an experienced manager. Will I benefit? Experienced managers can also benefit from a refresher course, even if you have a college degree or years of management experience. You will pick up valuable insights from our farm business consultants as well as from your GenerationNext colleagues in the class. Additionally, you can share challenges that you’ve faced in your business during class discussion.

When and how long are the seminars? The seminars take place over a period of three months, one per month, and are generally held in the fall or early winter. They run from 9:30 a.m. to approximately 3:30 p.m.; lunch and refreshments are included. Check with your local Farm Credit East branch office for specific dates in your area.

Do I need a special computer or software? In addition to seminars, we supply the GenerationNext computer course on a flash drive. The course runs on a PC or Mac computer and works with most web browsers. No special software, Internet access or specialized computer skills are necessary. It is helpful to be familiar with Microsoft Excel, but it is not necessary.

I’m on a budget. Is the program worth the investment of my time and money? Good management separates top performing farms from those that fall behind. This course will give you the tools to manage your business profitably. Past participants speak highly of the program, but investing is a decision that only you can make.


A VIEW FROM THE FIELD STEPPING INTO A NEW ROLE David and Kevin Bittner have agriculture in their DNA as well as parents who are dedicated to helping them cultivate that inclination. Both brothers are becoming more involved in the operation of Singer Farms, the family’s 500-acre apple, tree fruit and U-Pick cherry business. While the brothers are specialists in agricultural system management and horticulture, they are not yet experts in agribusiness management. When it comes to the financial end of their family’s business, the Bittners looked for help in learning how to strategically manage their diverse operation.

“ GenerationNext helps us to keep ahead of the curve.” HOW WE HELPED The GenerationNext program offered by Farm Credit East is available for young operators, like David and Kevin, who are either middle-managers or managers of a farm or ag business. Through three seminars, group discussions and ample networking opportunities, the program allowed the Bittners to target areas of personal growth and acquire the tools they needed to be more effective managers.

“Now I can look at our farm’s balance sheet and other reports with better understanding, rather than just asking my father questions. I’m part of the discussion.” – Kevin Bittner

“GenerationNext definitely provided me with information on how to be a good manager,” said David. “Now we can show employees an analysis of their benefits, like housing, utilities and insurance, and the amount of income they would need to make working for someone else in order to make up for those benefits.” “By making use of our financial data, I can make decisions that are justifiable, rather than based on emotion,” said David. “For example, by using partial budgeting, I can show the justification for buying a new tractor using the numbers, including the cost of repair for an old tractor and the number of hours that the mechanic could be working on another piece of equipment.”

Kevin and David Bittner, of Singer Farms in Appleton, N.Y. Kevin said, “I recommend GenerationNext to young farmers who want to further themselves professionally, as well as their business.” 57

Appraisal Services

Appraising your assets calls for ag-specific expertise. Throughout the life of your business, there will be times when you need to know the value of your assets. Farm Credit East offers valuation services for real estate, including a variety of land types and personal property, such as general and specialty machinery and equipment. When you’re in agriculture for keeps, it’s good to know an appraiser who is too.

David Peterson of Swedish Hill, Goose Watch and Penguin Bay Wineries in upstate N.Y. 58

Learn more about Farm Credit East services at

Appraisals are especially important when you: • Transfer farm assets to the next generation • Buy or sell real estate • Carry out estate planning • Settle an estate • Gift property • Transfer business assets to the next generation • Donate land to a trust • Sell development rights • Address property tax issues • Develop a business plan Farm Credit East assists more agricultural businesses and families with appraisals than any other firm in the Northeast. Whatever your appraisal needs, you can rely on us for prompt, informed guidance and information. We offer: • Ag-specific expertise. Our appraisers combine their knowledge of agricultural assets and current markets with professional appraisal standards to ensure that you receive the most accurate appraisal possible. • The most expansive database. Our depth of experience has allowed us to create the largest database of agricultural property transfers in our service area, which ensures accurate appraisals that reflect what’s really happening in the market. • Trained professionals. To stay sharp and up-to-date, our appraisers complete comprehensive, ag-specific appraisal training here at Farm Credit East and through leading professional appraisal societies. • Exceptional follow-through. Our appraisers can work directly with your attorney, as well as our tax consultants. In fact, our entire team is ready to help you put your appraisal to best use — for property sale, estate transfer, estate planning and more.

WHAT DOES FARM CREDIT EAST APPRAISE? Our appraisers are specialists in determining the value of: • Land and buildings, including barns and outbuildings • Specialty agricultural buildings • Large land parcels • Ag processing facilities • Mineral royalties • Standing timber • Timber processing facilities • Conservation easements


Appraisal Services FREQUENTLY ASKED QUESTIONS What is the appraisal based on? We use one of three different approaches to reach an appraisal value. We base it on: • The income your ag-asset generates • The comparative sales value of your agricultural asset to the sales of other similar agricultural assets • A cost approach where we take the brand new cost of your structural improvements, reduce it by the amount of wear and tear it has received, as well as other forms of depreciation, and add the value of the land base

What does an appraisal cost? The cost of the appraisal is based on an hourly charge for our appraisal staff. You will receive a competitive rate and get an ag-specific appraisal expert to ensure you receive the most accurate appraisal possible.

What kind of appraisal report can I receive? Our appraisers help you decide what type of documentation is appropriate for your situation, from a restricted-use appraisal to a detailed narrative report. A simple report may be all you need to set a selling price. However, if you’re involved in a court case, a comprehensive narrative report may be necessary.

Do I have to borrow through Farm Credit East to use this service? No. Anyone with an ag business or rural property can take advantage of our appraisal service whether or not they borrow from Farm Credit East.

Why is the value appraised at Farm Credit East different than the assessed value that shows up on my property tax bill? Assessments are made for the specific purpose of taxation under special rules and as of a particular date. They are likely not reliable for a different purpose. An independent market value appraisal provides a good review of your assessment.

Is the appraisal based only on market value? Our appraisers can base their valuation of your property on its current market value, agricultural or special-use value or value as of a particular date. We work with you to ensure that you receive the type of appraisal you need.

How do you appraise unique items? This really depends on the item. Usually, our appraiser will find a similar item that sold in order to provide a well-supported value on the item. 60

A VIEW FROM THE FIELD WHY AN APPRAISAL? Since 1986, David Peterson’s parents, Cindy and Dick, have grown a small part-time winery in Romulus, N.Y., into an ever-expanding business employing 30 full-time employees and 70 seasonal employees over three properties. Cindy and Dick involved David in the growth of the business while keeping succession planning in mind to ensure that the business would remain in the family. When they started thinking about transferring the business, they realized the process required a complete valuation of the business’s assets and would take several years to complete. With three wineries and additional tasting rooms across upstate New York, the appraisal process would be no small task — and accuracy was key.

David Peterson, of Swedish Hill, Goose Watch and Penguin Bay Wineries in upstate N.Y. As David and his parents prepared to transfer ownership of their expanding business, Farm Credit East provided the groundwork they needed for a smooth transition.

“We couldn’t have managed our appraisal without Farm Credit East.” HOW WE HELPED When it came time to transfer the Peterson’s business to the next generation, Farm Credit East appraiser John Nicholas knew just where to start. He rolled up his sleeves and researched their equipment values in preparation for a partial transfer. “Our equipment is housed in three locations. It’s a big process,” said David Peterson. “Without John’s work, we would have been grabbing numbers out of the air. I was im-

“When you transfer a business between generations, you have to be concerned that you have adequately documented value and accounted for all assets. Working with John Nicholas and Farm Credit East ensured that we did.” – David Peterson

pressed that he could arrive at values for so much specialized equipment, and especially for older pieces.” John Nicholas’s extensive appraisal experience with ag equipment and properties gave the Petersons peace of mind in knowing that the process was being done right. “John and Farm Credit East helped us to learn the value of what we owned. We couldn’t have moved forward without it,” said David. 61

Insurance Services

Managing risk is critical to your business success. Mike Northrup, owner of Northrup and Sons, LLC in Rodman, N.Y.

WATCH THE VIDEO Learn more about Farm Credit East insurance services at or on our website. 62

Crop Growers Insurance Farm Credit East offers crop insurance through its Crop Growers, LLP insurance agency. We call it weather management insurance, although it can also be structured to insure you against market fluctuations. Most people agree that markets and weather are experiencing higher highs and lower lows. Crop insurance provides a safety net that limits the lows based on the percent deductible that you choose. Managing the risks you face every day is an important part of running your business. Crop insurance can be an important part of your risk management plan. Our crop insurance experts can tailor a program of insurance covering your needs with one of the following policies: • Multi-peril policy. A little peace of mind goes a long way, especially when it’s easy and affordable to obtain. Multiple-Peril Crop Insurance (MPCI) can help you take some of the risk and worry out of the whims of nature. We call it “weather management” insurance, because it can protect your financial wellbeing from nearly all natural disasters, including drought, excess moisture, cold and frost, flood, wildlife and unavoidable damage from insects and disease. Yield and revenue protection are combined under a single policy for corn, soybean and wheat. The Chicago Board of Trade sets the price. • Livestock gross margin/dairy. Protection for dairy producers from rising feed costs or falling milk prices. • Crop-Hail. Gives you additional acre-by-acre protection that can be up to the full value of the crop. While not subsidized by USDA, it does provide additional flexibility for extra coverage above MPCI on high-value crops.

INDUSTRY LEADING CUSTOMER SATISFACTION • 96 percent thought our agents responded to their needs in a timely manner • 98 percent thought our call center employees were helpful in solving their problems • 96 percent were satisfied with our overall customer service • 96 percent said they would recommend Crop Growers to a friend. We’re proud of what our customers told us in our customer satisfactory survey. We work hard every day to continue to earn their business.


Insurance Services FREQUENTLY ASKED QUESTIONS Crop Growers Why Crop Growers? Our Crop Growers agents specialize in crop insurance and work on a team of Farm Credit East experts to provide customized, comprehensive management plans. They are salaried professionals that base their guidance on what’s best for you and not on commissions.

How much paperwork is involved? All you need to supply is your planted acreage records and prior production records. In addition, perennial crop producers supply a pre-acceptance worksheet with information, such as insurable and uninsurable areas and crop age. That’s it!

How much of a loss do I need to incur to receive coverage? Qualified losses range from 25-to-50 percent, based on your coverage election. If you maintain production records by farm serial number, crop type, practice or noncontiguous land, you may be able to break your farm into separate insurable units. A crop loss on just one parcel, for example, may qualify for an indemnity payment. Talk to your agent about crop provisions for optional unit requirement and eligibility.

Do I have to use the county average yield in setting up my production history? Your production records, not the county average, are used to determine the production history. Only when you lack proper records is the county average used.

How much does crop insurance cost? Federal subsidies make crop insurance an affordable safety net for your business. Actually, the cost of crop insurance is well below the cost of commercial private insurance and ranges from just 2-to-7 percent of the liability. Government subsidies range from 55 percent to 100 percent of the liability. And, based on the numbers mentioned above, the cost/risk of self-insuring is far greater.


FREQUENTLY ASKED QUESTIONS Crop Growers What crops are covered? All crops are not insured in every county. But if you grow a crop that is insurable somewhere in the United States, and it’s not under a pilot program, your crop insurance agent can request rates that offer the same program and protection as insurable crops. If no other program is available in the United States, the Noninsured Crop Disaster Assistance Program (NAP) is available from the Farm Service Agency.

Do I need to be a member of Farm Credit East to use this service? No, any crop grower can take advantage of this service.

Crop Insurance Plan Comparison Chart What We Can Do for You! TOPIC





Production-based coverage protects the producer against a yield loss

Establishes a dollar guarantee based on the Commodity Exchange Price Provisions (CEPP) projected price

Production-based coverage protects the producer against a yield loss


Production loss

Revenue loss due to increase or decrease in price, low yield or combination of these

Production loss


APH yield X selected level

Approved yield X coverage level X greater of projected price or harvest price

Approved yield X 50% level


Selected percentage of the market price established

Commodity Exchange Price Provisions (CEPP) projected price

55% of the maximum protection per acre as established by FCIC


Insurance Services Credit Life Insurance FOR PROTECTION FROM THE UNEXPECTED You are the most important part of your business. Don’t leave yourself unprotected. Farm Credit East understands the value of protecting the lives of our members. That’s why we offer credit life insurance, which provides added financial security to your family and your business. When making a major change to your business, such as taking on new debt, renewing a loan or bringing on a new partner, it’s a good idea to review your insurance coverage. Our knowledgeable staff can provide convenient quotes and cost-effective coverage tailored to your unique business objectives.

GROUP TERM • Designed to automatically pay off or reduce your loan upon your death • Convenient one-page application • Guaranteed renewable to age 74 • Disability rider available for up to a $10,000 annual benefit

INDIVIDUAL TERM • Guaranteed premiums for 5-, 10-, 15-, 20- or 30-year periods • Ideal for larger life insurance needs, such as income replacement, buy/sell agreements, key man insurance or estate planning • Requires a longer application, with a short paramedical exam


FREQUENTLY ASKED QUESTIONS Credit Life Insurance What is credit life insurance? Credit life insurance covers the outstanding balance of your mortgage or loan. The coverage provides money to help your family or farm business repay the loan in case of your unexpected death. It also gives them time to deal with their loss and temporarily relieves them of major financial stresses.

How much credit life insurance do I need? Most people should carry enough insurance to cover all outstanding debt. Two other areas to consider after debt coverage are income replacement and dependent coverage. A common estimate is five times your annual income.

Who may participate in the insurance program? All Farm Credit East customers under age 70 may apply, including your spouse and partners.

Can I insure just a portion of my loan? It’s important to protect your entire debt, but you decide the percentage of your loan that you want to insure.

After my loan is paid off or refinanced, what happens to this insurance? Once a loan is paid in full or refinanced, you can keep the insurance by simply transferring it to another Farm Credit East loan. If you don’t have other Farm Credit East loans, you may convert to an individual policy.

How often do I make payments? Many businesses have fluctuating cash flows throughout the year. You may pay monthly, quarterly, semiannually or annually. Or you can have the policy charged to your line of credit.


Insurance Services FREQUENTLY ASKED QUESTIONS Credit Life Insurance How do I apply for credit life insurance? Simply complete an application at your local Farm Credit East office. Most customers enroll when they apply for a loan.

Do I need to take a physical exam? Many customers do not need to take a physical exam. If one is required, the insurance company will pay for it.

What is the approval process? In some cases, members can be approved right at their local Farm Credit office.

Who provides my customer service? Thousands of Farm Credit customers participate in this program. Farm Credit East provides customer service and personalized assistance in all areas, including claims.

Who is the insurance underwriter? Our partner is Minnesota Life Insurance Company, a Securian Company. They have insured American farmers for more than 50 years, and their financial strength is excellent.


A VIEW FROM THE FIELD HOW DO YOU PROTECT YOUR CROP FROM MOTHER NATURE? “Planting a crop means sticking a lot of money in the ground,” says Mike Northrop. Mike owns and operates Northrop and Sons, LLC, a busy dairy farm in Rodman, N.Y., where he and two of his sons grow corn and alfalfa for forage on about 500 acres of owned and rented land. The family sells part of their crop to an ethanol plant and

“Of all the insurances that I buy, crop insurance is a good buy that has paid me more than I have paid in. It helps me sleep at night, because if all goes bad, I have something to fall back on.” – Mike Northrop

to other farmers for silage. With so much invested, Mike felt the need for protection against the conditions they can’t control.

“Farm Credit crop insurance takes all the worry out of growing.” HOW WE HELPED To shield against revenue loss from low yield or market fluctuations, Mike turned to Farm Credit East for revenue protection insurance. For his hay crop, he now carries pasture, rangeland and forage coverage, which protects him from loss due to lack of moisture. “Crop insurance has given us a lot of comfort,” he said. “Jeremy Forrett, my Crop Growers agent, is very responsive. He takes all the worry out of it. I also like that my agent is salaried. If I buy a little or a lot, it has nothing to do with his personal livelihood, and that’s important to me.” “As long as I grow crops,” says Mike, “I will take advantage of crop insurance to protect my investment.”


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Farm Credit East Services Guide  

Business Services to Help You Increase Profits: A Best Practice Guide for Agricultural Businesses