Page 1







President’s Message 3 

Financial Highlights 4 Events Calendar 5 2017 Interest Payments 5

6  –   9

10  –   1 1

Managing Farm Labor Challenges: Balancing Labor Shortages and Housing Costs in Ventura County Community Center

Four Ways to Reduce 12

WHO WE ARE One of the West’s leading agricultural lenders, Farm Credit West and its wholly owned subsidiaries are cooperatively-owned lending institutions providing financial services to farmers, ranchers, and agribusinesses. Our offices are located in Arizona and California’s Central Coast, Imperial Valley, South San Joaquin Valley, and Sacramento Valley.

SPOTLIGHT is produced for the customers, employees and friends of Farm Credit West. Comments and story ideas can be submitted by email to the Marketing Department at marketing@farmcreditwest.com.

BOARD OF DIRECTORS Chairman of the Board Joey Airoso............................................. Pixley, CA

Your 2017 Tax Bill

Vice Chair of the Board Sureena B. Thiara.............................Yuba City, CA

2018/19 Scholarship Applications 13

Robert Amarel, Jr.............................Yuba City, CA

Roasted Whole Baby Pumpkins 14

Teresa Castanias.................................... Dixon, CA

Banking in a New Age 15

Mark A. Cook..................................... Willcox, AZ

Side by Side: Working with Your 16

Lender to Prepare for the Future

Electronic Balance Sheet 17

Gregory O. (Butch) Dias, Jr..................Visalia, CA J. Dick Eastman................................... Powell, WY Catherine Fanucchi........................ Bakersfield, CA

Device Management and 18

Douglas C. Filipponi...........................Creston, CA

the Internet of Things

Craig C. Gnos........................................ Davis, CA

Territory and Office Locations

Robert N. Hansen..............................Hanford, CA


Blake Harlan...................................Woodland, CA Tom Ikeda................................Arroyo Grande, CA

MISSION STATEMENT Farm Credit West will ensure THE CUSTOMER COMES FIRST by providing superior service at competitive rates, in a timely,

professional, and ethical manner, and by delivering a meaningful return on equity through our patronage program.


SPOTLIGHT | Winter 2017

Colin Mellon.......................................... Yuma, AZ Barry Powell..................................Sacramento, CA Brian Talley..............................Arroyo Grande, CA


Commitment to Innovation Farm Credit West is positioned to meet the demands of the future. GEORGE WASHINGTON ONCE SAID, “Agriculture

Internally, our Association continues to increase efficiencies

is the most healthful, most useful, and most noble

with the ultimate goal of delivering products and services

employment of man.” This sentiment resonates deeply

to you in an accurate and timely manner. This year, we

with our customers. Every day, our staff witnesses

formalized and completed the structure of a centralized

the transfer of knowledge and the love of farming pass

Credit Analyst Group of which all branches are now utilizing

between generations as young farmers and ranchers

services. We also continued pursuit of a loan covenant

take on increasingly larger roles in their family’s operation.

management tool to ensure accuracy of covenants in

As your committed business partner, it is our privilege

loan documents and provide enhanced ability to track

to walk side-by-side with you through this transition.

borrower reporting and covenant compliance. When fully

While passion is a vital component to our customers’ success, operating an active farm or ranch in the 21st

implemented, this program will reduce processing times for customers seeking new loans or leases.

century requires that growers manage an efficient and

Also launched in 2017 was limited use of DocuSign,

productive operation. As globalization and competition in

software that allows customers electronic access and

the marketplace increases, our customers must lean into

digital execution of certain loan and legal documents.

technology — identifying effective and impactful ways to

We also introduced a redesigned transaction summary

increase the quality and volume of their product supply while

statement and simple billing invoice for customers,

maintaining the operational integrity of their farm or ranch.

featuring a full color palette and easy-to-read template.

At Farm Credit West, we understand the need to leverage technology to more efficiently and effectively service our customers. To ensure we continue providing you with

These improvements, and several more projects slated for release in 2018, will allow you to conduct business more efficiently and effectively with our Association.

superior service while maintaining competitive rates we

And yet, despite the many exciting products and

identified several key areas of our business operations

technology we have leveraged this year, our greatest

to engage new technology in 2017.

accomplishment has been ensuring that you, our

In the Spring, we launched a new website providing you with all the information you need to know about your Association with a click of your mouse. With this launch we re-designed our customers’ online experience, creating

customers, continue to come first as we provide individual financial solutions to your farm or ranch. We look forward to servicing you and your next generation for many years to come.

a single login process to view and transfer funds from your

From our family to yours, happy holidays and many

Farm Credit accounts, review exclusive industry information,

blessings for 2018.

provide sensitive financials to your loan officer, and communicate securely with your local branch.

Farm Credit West | Winter 2017


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Financial Highlights

Farm Credit West reported net income of $165 million for the first nine months of 2017. These year-to-date earnings are ahead of our business plan target. Also, during the first nine months of 2017 our average earning assets and capital levels increased and we strengthened our allowance for loan losses.








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Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 30, delete everything but the column 20132. Ungroup 2014everything, 2015 2016 2017

bars, change stroke and fill 3. Make each column .8” wide w/o changing height Average Earning Assets (in millions) 4. Extrude & Bevel settings: -7, -7, 0

Average earning assets increased $265 million, or 2.9%, during the first nine months of the year. The full impact of the Southwest merger and significant loan growth during 2015 was recognized in the average earning assets calculation during 2016. Farm Credit West is experiencing

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Members’ Equity as a % of Total Assets

In the first nine months of 2017, total members’ equity increased $194 million, primarily due to net income of $165 million and an increase in the preferred stock balance of $34 million. Partially offsetting net income during the year were preferred stock dividends of $6 million.

modest loan growth in 2017.






Dec. 31, 2013

Dec. 31, 2014

Dec. 31, 2015

Dec. 31, 2016

Sept. 30, 2017






Dec. 31, 2013

Dec. 31, 2014

Dec. 31, 2015

Dec. 31, 2016

Sept. 30, 2017

Allowance for Loan Losses as a % of Loans

Our allowance for loan losses totaled $65 million (0.68% of loan

Nonearning Assets (in millions)

principal and interest) at September 30, 2017, compared with

Nonearning assets (nonaccrual loans plus other property

0.58% of loan principal and interest at December 31, 2016. The

owned) were $127 million at September 30, 2017, a decrease

allowance is our best estimate of the amount of probable losses

of $15 million or 10.5% when compared to December 31, 2016

existing in our loan portfolio as of each balance sheet date. We

balances. The decrease was primarily due to $23 million in net

determine the allowance based on a regular assessment of the

repayments on nonaccrual loans partially offset by $9 million in

loan portfolio, which generally considers recent historic charge-

net transfers to nonaccrual during the year. In September 2017,

off experience, collateral evaluations and adjustments for other

a $3 million nonaccrual loan transferred to other property owned.

relevant economic factors.


SPOTLIGHT | Winter 2017

Events Calendar JANUARY 23  –   2 5 Unified Wine and Grape Symposium Sacramento, CA JANUARY 24  –   2 7 Ecofarm Conference Pacific Grove, CA JANUARY 25  –   2 7 CA Holstein State Convention Sonoma, CA JANUARY 31  –   F EBRUARY 2 Cattle Industry Convention and NCBA Trade Show Phoenix, AZ FEBRUARY 6  –   8 Colusa Farm Show Colusa, CA FEBRUARY 13  –   1 5 World Ag Expo Tulare, CA FEBRUARY 16  –   1 9 Young Farmer & Rancher Conference Reno, NV FEBRUARY 21  –   2 2 CA League of Food Processors Food Processing Expo 2018 Sacramento, CA

FEBRUARY 21  –   2 3 FCW Young Farmer and Rancher Institute Avila Beach, CA FEBRUARY 22 Harvest Dinner Yuma, AZ FEBRUARY 27  –   M ARCH 1 AgSafe Conference Monterey, CA MARCH 1  –   3 NAIDC Western Region Dairy Challenge Twin Falls, ID MARCH 5  –   7 American Pistachio Growers Conference Palm Desert, CA MARCH 7  –   9 Pinal 40 — Arizona Ag Experience Maricopa, AZ MARCH [TBD] California Citrus Mutual Showcase Visalia, CA

MARCH 12  –   1 4 Women of the Vine Symposium Napa, CA APRIL 3  –   5 Safe Food California Conference Coachella Valley, CA

Save the date for your local

Customer Appreciation Dinner Invitation to follow

MARCH 20 Woodland and Yuba City Branches MARCH 22 Tulare, Dinuba, and Hanford Branches  M ARCH 27 Yuma and Imperial Branches M ARCH 28 Rural Arizona / Safford Branch MARCH 29 Tempe Branch APRIL 3 Kern Branch  APRIL 4 Ventura Branch APRIL 5 Templeton and Santa Maria Branches

2017 INTEREST PAYMENTS To help you achieve your tax planning objectives, we would like to remind you of your Association’s year-end procedures regarding interest paid on IRS Form 1098. For payments, the date received is the determining factor. • Payments received by the Association on or before 2:00 p.m. on December 29, 2017 will be reported as 2017 interest paid. • Payments received after that date and time, whether or not they were mailed in 2017, will not be reported as 2017 interest paid. • Payments received after 2:00 p.m. on December 29, 2017 will be processed on the following business day. Consult your tax advisor regarding the deductibility of payments in transit. For payments made from your Future Payment Funds account, the date applied is the determining factor. If your tax-planning objectives are better met by having the interest portion of your January1, 2018 installment reported as 2017 interest paid, you must register an early transfer of Funds Held to pay your installment in 2017. Written requests for early transfer must be received by the Association by December 27, 2017.

Managing Farm Labor Challenges Balancing Labor Shortages and Housing Costs in Ventura County By John Frith

Farmers in Ventura County, California, are increasingly caught between a rock and a hard place. On the one hand, the county’s strict — many would say draconian — no-growth policies require most ag land to be preserved and prohibit any development outside of urban areas through at least 2050 without a vote of the people. On the other hand, the county’s

To try to help increase the availability

Leslie Leavens, vice president of finance

skyrocketing housing costs, coupled

of decent and affordable housing for the

and operations for Leavens Ranches LLC,

with tighter border security and an

workforce, growers, local government,

said to help ensure a supply of quality

improving Mexican economy, have

housing advocates, and lenders are

farmworkers from the federal H2A visa

sharply reduced the supply and quality

working together to find innovative

program, her family-owned company

of farmworkers in recent years.

solutions. Farm Credit West has provided

bought a small apartment complex

loans in different parts of the state to help

three years ago in Oxnard (with financial

increase the supply of housing, and growers

assistance from Farm Credit West) and

agree that a stable, quality labor force

this year purchased a smaller complex

leads to a better harvest and, ultimately,

in Santa Paula.

This labor shortage is not a problem unique to Ventura County, but coupled with the growth control ordinances, it’s a particular concern there. After all, if a lack of labor leaves crops rotting in the field while area growers can’t sell or subdivide their land, their future is bleak.


SPOTLIGHT | Winter 2017

higher profits. But everyone involved in the effort acknowledges that solving the problem won’t be easy. Or cheap.

The purchase was decided upon after a shortage of workers led to a financial disaster for the Leavenses.

We had a great crop that year but no labor. As a result, we dropped a quarter-million dollars’ worth of lemons on the ground. “We had a great crop that year but no labor. As a

new housing. Brokaw and Leavens are on the

result, we dropped a quarter-million dollars’ worth

group’s board of directors, and Farm Credit West

of lemons on the ground,” she recalled.

has donated funding to the organization.

“Buying housing that’s empty for four months a year

Alondra Serna, the organization’s program

or longer is a huge investment and it’s taking housing

coordinator, said the future of farming in Ventura

out of circulation for the rest of the county, and it

County depends on solving the housing crisis.

adds 15% to our harvesting costs, but we’re getting the fruit off the trees.”

“We have a serious labor shortage here, in part due to immigration policy but in part due to rising housing

The company had the ability to make those

costs. We hear from farmworkers that it’s the No. 1

investments in large part due to high lemon prices

issue for them, and many go to other areas or other

in recent years. But that era may be coming to an

industries where they can make more money,” she said.

end. In May, the Trump Administration affirmed an Obama Administration decision to lift a 16-year ban on importing lemons from Argentina. Joel Nelson, president of California Citrus Mutual, has predicted the move will cause a long price war that could cost California growers hundreds of millions of dollars. But growers and other advocates are continuing to look for ways to increase the supply of farm labor, and one part of that is to increase the availability of farmworker housing. “Collaborations are happening,” said Ellen Brokaw, owner of one of the state’s largest suppliers of subtropical orchard trees, primarily citrus and avocado, and an innovator in developing new varieties of fruits and rootstocks.

Leslie Leavens (left) and Ellen Brokaw (right) discuss the housing problems facing farmers and farmworkers in Ventura County.

“Farmers are scrambling to find ways to build

House Farm Workers! says county farms and ranches

housing. And here we have private and public

employ nearly 36,000 men and women without

interest. The county government, which is often

whom the $2 billion a year agricultural industry could

an impediment to building housing, has leadership

not exist. As the number of migrant workers has

that wants to build housing for farmworkers.” In fact,

sharply decreased, most remaining farmworkers are

she said the Ventura County Board of Supervisors

full-time residents and have lived in the community

last year awarded $1 million to help pay for three

for an average of 11 years.

farmworker housing projects.

But while the average income of farmworkers is only

One way the county’s agricultural community

about $22,000 per year, the average 2-bedroom

is working to ease the chronic housing shortage

apartment rent is more than $20,000 annually,

is through support of House Farm Workers!, an

meaning an annual income of $62,200 is needed

advocacy group that works to build support for

to afford the rent. Thus, many farmworkers have Continued on next page

Farm Credit West | Winter 2017


to pool resources to live in overcrowded

or ranch for the duration of the contract,

apartments, motel rooms, and houses

up to 10 months, and the resulting quality

—or in garages or sheds not intended

of workers is much higher.

for human habitation.

“The quality of the harvest has improved

In the past decade, Serna said only about

dramatically,” Leavens said. “The fruit that’s

500 affordable farmworker units have

going into the bins is the right color, the

been built, and nonprofit developers in

right size, and the stems are cut short.”

the area such as the Cabrillo Economic

(If the stem is too long, it can puncture

Development Corp. has waiting lists

other lemons and lead to decay and lower

hundreds of families long.

prices from the packing houses.)

Leavens said her family has long provided

Because the program is intended to

free housing on its ranches for its 17 year-

alleviate shortages of American workers,

round farmworkers — many in homes used

California contractors must advertise

crops like strawberries, but certain crops,

by Leavens family members in past years.

for farmworkers throughout the West.

such as lemons and avocados, require

But workers supplied by labor contractors

Leavens recalled only one worker who

a trained human eye to pluck the fruit

have had to fend for themselves, and

was hired because of the advertising,

at the right time and in the right way.

with the current labor crunch, contracted

a woman who tried very hard but was

workers are often not as qualified.

let go after a couple of weeks.

“The workers are putting fruit in the bins

Leavens and Brokaw see two possible

lemon trees were pruned into giant cubes

that should be left on the tree for three

long-term solutions to keeping

to make picking easier. But growers

more months. And the crew that was

agriculture viable in the county — a viable

realized that doing so lowers the quality

20 people one day is down to 12 the next

guest-worker program and increased

of fruit and thus the price they can receive,

because they heard someone down the

mechanization — but neither seem likely

so they’ve gone back to expensive and

road was paying a higher rate,” she said.

any time soon. Immigration reform is

labor-intensive hand pruning instead.

As a result, growers are increasingly looking to utilize workers brought to the U.S. via the H2A visa process. Growers must provide transportation from the workers’ home country, housing while in the U.S., meals or cooking facilities, and transportation to and from the

deeply divisive nationally and it doesn’t seem likely that any real reform measures that include guest workers will happen in the near future. But Leavens said enacting such a program would give growers a degree of certainty needed to invest in housing.

Ellen Brokaw and Leslie Leavens at Leavens’ ranch in Santa Paula.

In fact, 20 years ago there was more mechanization than there is today as

A third option, Brokaw said, would be to significantly increase wages, but prices are largely dictated by retailers, and increased competition from low-cost countries like Argentina would make it difficult to raise prices accordingly. Furthermore, she said, agricultural

job site. But in exchange, workers are

There is promising research in

economists say that given the lower

required to stay on the designated farm

mechanization for other major county

birthrate in the U.S., there won’t be

It takes a trained human eye to pluck the fruit at the right time and in the right way.


SPOTLIGHT | Winter 2017

enough native-born workers even with higher wages. “We need outsiders,” she said. Other housing avenues are being explored. While the county has streamlined approvals if its preapproved designs are used, there are still numerous planning and regulatory hurdles to build housing. There are also efforts to buy and rehabilitate a handful of old labor camps dating back to the bracero era in the 1940s and ‘50s. And a privatesector developer from South Africa had success there repurposing old schools and hospitals into housing and has come to California to try and replicate the approach. However, the county’s unique growth control measure — SOAR, or Save Open Space and Agriculture — limits virtually all growth to existing cities and makes it difficult to build farmworker housing on ag land. And as Serna with House Farm Workers! noted, the value of developable land has gone up sharply, making it even more difficult to build affordable housing of any kind. The county currently needs about 26,000 additional units to meet all current low-income housing needs. But residents in the 10 cities, where growth is allowed, prefer that new housing be focused on single-family homes compatible with existing neighborhoods, not higher-density developments. And of course, lowincome housing is always a tough sell.

If we want to keep agriculture viable, we have to make it so the workforce has a safe and affordable place to live.

Ultimately, more and more people in the ag community recognize they will need to tackle the problem and not rely

John Krist, executive director of the

on government or nonprofits alone to

for those folks has a couple of different

Ventura County Farm Bureau and, like

deal with it.

effects. It makes their lives better, (and)

Leavens and Brokaw, a House Farm

it makes them better, more-stable

Workers! director, said the message

employees. But it also makes them

to the community is clear.

better, more-stable members of the

“If we want to keep agriculture viable, we have to make it so the workforce has a safe and affordable place to live,” Serna

“Anything we can do to increase the

said. “Plus, it’s the right thing to do.”

stock of affordable, safe, decent housing

community, and everybody benefits from that,” he said.

Farm Credit West | Winter 2017


Community Center

Farm Credit Awarded FFA Distinguished Service Award Farm Credit West together with several other California Farm Credit associations were honored at a reception in Fresno earlier this fall.

The Future Farmers of America (FFA) Executive Committee of the

“Farm Credit is deeply invested in the future of agriculture and we

California Association FFA recently awarded Farm Credit with their

are extremely pleased to play an integral part in continuing support

Distinguished Service Award.

of California FFA”, says Leili Ghazi, Farm Credit Alliance Chair.

This award is reserved for those few who provide assistance

Farm Credit organizations honored were American AgCredit,

of an outstanding nature to the FFA organization. “We are very

Colusa-Glenn Farm Credit, CoBank, Farm Credit West, Fresno

grateful for Farm Credit’s ongoing dedication to California FFA,

Madera Farm Credit, Golden State Farm Credit, and Yosemite

and firmly believe that their investment in FFA members will pay

Farm Credit.

dividends for generations to come”, remarks Dennis Albiani, California FFA Foundation Chair.

Congratulations to Joey Airoso: Livestock Man of the Year Joey Airoso, Farm Credit West Board Chairman and Tulare County Dairyman, was recently honored as Livestock Man of the Year by the Tulare County Farm Bureau. Joey is a fourth-generation dairy farmer and operates facilities in Tulare and Pixley. Joey and his wife Lauri operate the dairy with Joey’s parents, Joe and Diane Airoso. Joey’s son Joseph is also active in the business.

10 SPOTLIGHT | Winter 2017

Community Center New Farm Credit West Building Opens in Yuba City Farm Credit West recently completed construction and moved into a new building in Yuba City, California. Containing approximately 14,000 square feet, this building houses two conference rooms, a signing room, and dozens of offices and work stations. The landscaping surrounding the building features drought tolerant plants and turf with storm drainage utilizing natural element filtration to benefit the local water table. All lighting, appliances, and other demands for power are energy efficient certified. Stop by our new location at 1800 Lassen Boulevard for a tour!

Working to Preserve Yolo County Fairgrounds

Dino Giacomazzi Speaks at TEDx Bakersfield

Farm Credit West joined together with the Yolo

This fall, Hanford Dairyman Dino Giacomazzi took the stage at

County Fair Heritage Foundation to sponsor their second annual dinner fundraiser. Proceeds from this event are critical to preserve all aspects of maintaining the Yolo County Fairgrounds. In addition to preservation of the grounds, the Foundation seeks to keep Yolo County’s rich agriculture heritage alive by supporting educational opportunities, community outreach, and exhibits at the fair.

the first-ever TEDx Bakersfield event. Dino is a 4th generation dairy farmer and board chair of the PLANT Foundation. As a trusted source for advocating the use of agriculture to teach STEM (Science, Technology, Engineering, and Mathematics) to students, Dino spoke about the importance of engaging in relatable, interactive techniques to communicate the sustainable and efficient ways farmers and ranchers manage their land. Dino stressed the need for tomorrow’s generation to engage in today’s technology both on the farm and in the classroom.

Farm Credit West | Winter 2017 11

Four Ways to Reduce Your 2017 Tax Bill By Ann Braun

Taxes have been front and center as Congress and the White House discuss plans to reduce tax rates and simplify the tax code. While uncertainty remains, there are steps that the agriculture sector can take now to prepare for their year-end, regardless of whether tax changes affect 2017 taxes. Accelerate Payment of Expenses Many farmers are eligible for the cash method of accounting and may want to consider prepaying some of their expenses. Cash basis taxpayers can generally deduct their expenses when they are paid. Farmers may consider accelerating additional payments into 2017, because any payments made in 2017 could potentially reduce a 2017 tax bill. Estimated state income tax payments could be accelerated, as could early payment of other expenses, such as real estate taxes. Qualified farmers—individuals who receive at least two-thirds of their gross income for 2016 or 2017 from farming—are subject to special estimated tax rules. They may or not be required to make estimated tax payments and should check with the IRS requirements before accelerating any estimated tax payments.

Make Charitable Donations & Gifts The outline for tax reform released by Congressional leaders on September 27 includes a possible repeal of the estate

12 SPOTLIGHT | Winter 2017

tax. In the event the estate tax is not

a tax deduction in the year the gift is made

repealed for 2017, individuals can use

(subject to certain limits) and can later make

family limited partnerships to transfer

a donation or grant from the DAF.

assets to family members in lower tax

Take Advantage of Deductions

brackets at a discount. Using the annual gift limit of $14,000 (this increased to $15,000 for 2018) and donating to charitable organizations directly or through a split-interest fund can also help remove taxable value from estates. Taxpayers may also consider gifting assets with high appreciation potential while being mindful of the lifetime gift exclusion, which for 2017 is $5.49 million per taxpayer (this increases to $5.6 million for 2018). Individuals may consider making charitable donations directly or through a donoradvised fund (DAF). The donor typically gets

Tax reform may do away with many business deductions, but if these reforms do not affect 2017, taxpayers should look to maximize what’s available currently. The Section 179 expensing election allows taxpayers with adequate income to deduct purchases of qualified tangible property up to $510,000. Purchases qualify if they are part of manufacturing, production, extraction, single purpose agricultural or horticultural structures, machinery and equipment and livestock. Farmers may also be able to take bonus depreciation of up to 50 percent of

the cost of new equipment and certain purchases involving improvements to nonresidential property if the purchases are placed in service during 2017. Taxpayers should evaluate their upcoming purchases and determine whether it’s worth accelerating the purchase into 2017. Applying for a research and development (R&D) tax credit may also be worthwhile.

2018 / 19

Scholarship Applications Now Available

The R&D tax credit provides a dollar-fordollar reduction in tax liability for activities that create new or improve the function, reliability, performance or quality of a core business component. The activity must also be technological in nature, eliminate uncertainty and involve experimentation. It will likely not be affected by tax reform.

Consider a 1031 Exchange Farmers that have land to sell may want to set up a Section 1031 like-kind exchange.

Farm Credit West is committed to supporting the role of education in agriculture’s future. Over the past 23 years Farm Credit West has committed $775,000 to this program, supporting 217 scholars.

The like-kind exchange helps defer federal and state income taxes on the taxable gain. To qualify, the exchange must be set

the title to the land they’d like to sell to

Scholarship applications are due February 15, 2018.

the qualified intermediary and identify up

Applicants must be an entering or current college student enrolled in

to three replacement properties of similar

agricultural programs and exhibit academic excellence by achieving

value. The qualified intermediary transfers

a GPA of 2.7 or higher. They must also be a customer of Farm Credit

at least one of the acquired properties to

West or the spouse or dependent of a Farm Credit West customer.

up as a swap and involve an independent, qualified intermediary. Taxpayers transfer

the taxpayer within 180 days of receiving the title of the property being sold.

When In Doubt, Seek Help

Application and guidelines can be found at www.farmcreditwest.com under Community Support. For those who have previously received

a Farm Credit West Scholarship, renewal applications will be posted

There are several opportunities available

in March and are due to Farm Credit West by July 1, 2018 along with

to lower 2017 taxes, but time is of the

final college transcripts.

essence. A tax professional can help identify which planning vehicles and tax strategies may work best for your unique

If you have any questions about the scholarship program, please email scholarships@farmcreditwest.com.

situation and concerns. Ann Braun is a Managing Director in the Bakersfield office of CBIZ and MHM, one of the nation’s top ten accounting providers. She is experienced with tax consulting and tax return preparation as well as succession and estate planning for the agriculture industry. She can be reached at abraun@CBIZ.com

Farm Credit West | Winter 2017 13


Roasted Whole Baby Pumpkins by Chef David Vartanian

2017 – 2018 Holiday Schedule CHRISTMAS DAY

Monday, December 25, 2017


Monday, January 1, 2018 YIELD: 6 SERVINGS 6 baby pumpkins 4 ounces Jarlsberg cheese 8 ounces smoked (or regular) chicken, diced 2 tablespoons hot chili sauce 1 onion, chopped 1 tablespoon butter 6 ounces heavy cream 1 tablespoon chives Salt and freshly ground pepper Rough chopped pistachios Place pumpkins whole into a baking pan, cover with foil and bake in a 325°F oven for 45 minutes or until the pumpkins are soft. Use a sharp knife to remove the tops of the pumpkins, discard the seeds and season the inside of the pumpkins with salt and pepper. Heat the butter in a sauté pan and cook the onion over medium heat until soft. In a bowl, combine the smoked chicken, Jarlsberg cheese, cooked onion and chives. Mix well and then season with salt, pepper and chili sauce to taste. Fill the pumpkins with the smoked chicken mixture and pour one ounce of heavy cream into each pumpkin. Place the tops back onto each pumpkin, cover with aluminum foil and roast the pumpkins in 350°F oven for 15 to 20 minutes. To serve, place one ounce of a lemon butter sauce on each of the six warm plates and place a pumpkin on each plate. Top each pumpkin with chopped pistachios. This recipe is posted on the American Pistachio Growers website (www.americanpistachios.org, 2017) and is republished with permission. © American Pistachio Growers

14 SPOTLIGHT | Winter 2017

MARTIN LUTHER KING, JR. DAY Monday, January 15, 2018


Monday, February 19, 2018


Monday, May 28, 2018


Wednesday, July 4, 2018


Monday, September 3, 2018


Monday, October 8, 2018


Thursday, November 22, 2018


Tuesday, December 25, 2018

Banking in a New Age

Annual Submission of Financial Information to Farm Credit West By Laurie Dey, Vice President — Credit (Templeton)

JUST LIKE OUR CUSTOMERS, Farm Credit West must regularly assess risk. We assess risk using a variety of different tools including benchmarking our Association with other Farm Credit associations. A vital component of this process is to identify existing risk in our current loan portfolio. As part of our loan and lease requirements, customers are requested to submit financial information on at least an annual basis. The purpose for this is multi-faceted: Regulatory requirements on lending institutions have become more stringent in recent years. To keep our Association in compliance, we regularly review each and every loan and lease on the books. To maintain competitive interest rates and fees, we must stay connected to our borrowers — understanding their successes and challenges and overall financial picture. To accomplish this in the most transparent method as possible, it is vital that we review financial information on an annual basis. As a cooperative institution, we are stewards of your money. In order for us to continue offering one of the highest levels of Patronage payments in the Farm Credit System to our customer/ stockholders; we must protect the Association, being aware of potential and arising risks before they reach a critical point. Furthermore, with timely submission of periodic financial information (tax returns, profit & loss statements, balance sheets, etc.),

HOW FARM CREDIT WEST CAN HELP: We accept electronic submissions of balance sheets through use of a tool on our secure customer portal, myFCW. Information is saved from period to period, eliminating the need to re-submit duplicate information. Ask your loan officer for more information. Secure Messaging through myFCW is another convenient way to submit confidential financial information to your loan officer. Keep this in mind as you prepare to submit your financial information and tax returns in 2018.

customers could see faster turn-around times for loan requests.

Financing your future success Supporting pioneering innovations with reliable financial solutions for your farm, ranch, or agribusiness. FarmCreditWest.com



Side by Side

Working with Your Lender to Prepare for the Future By Dr. David M. Kohl

Recently, an aspiring young producer asked a common question saying, “When will commodity prices come back?� Well, the quick response was that a return to the level of the recent supercycle is highly unlikely for most agricultural commodities. The reason is a confluence of trends

the business model to generate profits,

towards a partial or total liquidation

in technology. The stronger managers

or minimize losses. Let’s review the

of the business, where decisions are

are integrating biotechnology and

critical elements to be included.

extremely difficult and goals become

engineering, and information and big data into their systems, both domestically

As one prepares for 2018 and beyond,

very important.

a well-articulated set of goals can

Next, in the short days of December

be beneficial for both the producer

map out the business cash flows. Keep

and lender. Creating goals opens the

in mind that this process is 80 percent

lines of communication with partners,

of the business plan because of the type

spouses, lender, suppliers, and advisors.

of broad, critical thinking it requires. To

Also evidenced by the economic reset

Clearly, goals must be in writing for

develop the cash flow, one should think

is the need for producers to draw upon

review and discussion. They should be

through production, marketing, financial,

any and all available resources including

separated into short-term and long-term

and risk management scenarios.

their agricultural lenders to re-balance

timeframes that include family, business,

In fact, for less ambiguity, one can

the business. As field work starts to

and personal aspirations. For some

conduct scenario planning with different

conclude later this fall and into the winter,

producers, goals will be growth-oriented,

projections for price, production, and

producers and lenders need to work

while others will focus on adjustments to

cost. These parameters can be very

side-by-side to make adjustments in

reduce losses. Still others may be working

valuable in tracking performance while

and abroad. The result is surplus supply throughout the globe and lower sustained prices, as evidenced by the current economic reset.

16 SPOTLIGHT | Winter 2017

working side-by-side with the lender,


advising team, spouses, or partners. By the time we watch for the groundhogs in February update your balance sheet. More emphasis must be placed on the positive or negative direction of inventories, receivables, prepaid expenses, accounts

Electronic Balance Sheet

payable, as well as other creditors. The key to strengthening the working relationship with your lender is transparency. Accuracy in listing all the equipment leases, for example, is needed to enhance trust. The next element is one that often spurs discussion; a family living budget. Many lenders are reporting that family living cost and spending are growing areas of concern. Yes, healthcare premiums and other expenses are increasing rapidly, but part of the adjustment through the economic cycle is in lifestyle. In fact, several lenders are seeing refinancing requests for lifestyle spending, not necessarily farm losses.

Customer Quotes: “This year at loan renewal our loan officer Donny Deforest sent me a balance sheet, through myFCW, that I could complete on the computer. This is a great tool that really streamlines the renewal process. It was easy to use and got our information back to Farm Credit immediately!” — Robbie Woodhouse “I found completing our balance sheet online with MyFCW relatively easy. They had my prior year’s information on the forms, which assured I included everything needed. In addition, uploading my supporting documents was no problem at all.” — Sari McLaurin

Balance Sheet Work Sheet The Financial Requests page available in your myFCW account allows you to view and easily update your balance sheet submissions to Farm Credit West in a secure online environment.

Finally, side-by-side working relationship

This feature provides you with access to your information when

requires monitoring of the business’

and where it is most convenient for you.

financial performance. Ideally, monthly or quarterly meetings should be established with the lender, spouse, advisory team, or partner. This type of monitoring allows for tweaks and necessary adjustments, which might just be the only tool what keeps the business profitable and competitive for years to come. Returning to the young producer’s question, suppressed prices are a reality for at least some time to come. In the supercycle when prices were high, many thought that was the “new normal.” Of course, today, many feel like the reset is the “new normal.” In

Get started by logging into your myFCW Account. If your loan officer has sent you an Electronic Balance Sheet to complete, you will see a My Financial Requests button on the left side of the screen. Once on the My Financial Requests page, you will see a list of your In Progress as well as any previously

Submitted balance sheet worksheets. A list of all recipients

for each electronic balance sheet is posted next to each line item. Previously submitted balance sheets may also be viewed in a read-only format. Select the balance sheet that you would like to edit and submit. Help documents are available on each page to assist you with the process. Once submitted, your updated balance sheet information is automatically sent to your loan officer.

actuality, agriculture is a cyclical industry

The Electronic Balance Sheet allows your financials to be updated

with a high degree of volatility in numerous

when it is convenient for you. Ask your loan officer to send your

variables. A truly successful business

next balance sheet electronically today.

positions for the up cycles, down cycles, and a lot of in between.

Farm Credit West | Winter 2017 17


Device Management and the Internet of Things By Michael Levin, CEO / Founder of the Center for Information Security Awareness

Internet touchpoints

long-term malware to your device, which

are no longer reserved

stays with you even after you disconnect.

for just personal computers. We are increasingly networked together by an Internet of Things (IoT). The IoT includes all wireless internet devices, such as smartphones, wearable fitness bands, smartwatches, vehicles, appliances, and even certain medical devices. These wireless devices constantly exchange data across different internetbased systems. Such capability allows us great freedom to communicate and manage our busy lives, but it also exposes us to new cybersecurity threats. Take a moment to consider the many ways you connect to the Internet each day and with which devices. Are all these methods equally secure? How do you manage your personal and professional web use across different devices and networks? Many users are unaware of how many connected applications or accounts they have open at any time, and on which devices. The convenience of connecting to a public Wi-Fi network is tempting for most, but offers very little privacy and a great deal of risk. Over public Wi-Fi, an attacker can easily embed

Safe device management entails


 Consider the risk and connect safely

Avoid automatically connecting any devices

a three-part process:

to free public Wi-Fi networks. Cybercriminals


often create false networks that appear

Protect your device before you connect

When you get a new device, take a few minutes to understand its wireless features such as Wi-Fi, Bluetooth, Near-field communication (NFC), location tracking (GPS), and media sharing. Each of these can be a potential breach point if left

to be legitimate business networks to lure you to connect. Your passwords, financial accounts, and data can be compromised by a hacker on free Wi-Fi networks. Always consider that free Wi-Fi networks are unencrypted, and your device activity and data can be monitored by hackers. Use VPN software whenever possible

unsecured. Avoid leaving your connection

to encrypt your data.

points open when you are not using them.


In many cases you can just turn these features off when not in use. Always keep your device up-to-date with

P  ractice safe usage once you connect

If you are like many users, at least one

current versions of the operating system,

of your devices shares work and non-work

firmware, security software, and web

purposes. The device you use to access

browsing tools. Use a supported operating

your corporate network and communicate

system capable of receiving updates.

with customers may be the same device

Get to know the security features included in your device and its applications. Some

you use for storing personal photos and engaging with social media.

examples may include data encryption,

The IoT is creating more touchpoints with

remote wipe, password customization,

social media. Information can now just as

dual factor authentication, back-up, virtual

easily be shared via your car’s onboard

private network (VPN), and malware

computer as with your smartwatch or phone.

removal. Learn when to use these features.

Remember, we are all now connected daily in the IoT world. Our online activities have the potential to affect our finances, families, and colleagues. Criminals are relying increasingly on ways to hack our devices. Each of us plays a responsible part in ongoing awareness and best practices to secure the Internet of Things.

18 SPOTLIGHT | Winter 2017

Territory and Office Locations ADMINISTRATIVE OFFICE 3755 Atherton Road Rocklin, CA 95765 916.780.1166 CAPITAL MARKETS 1446 Spring Street Suite 201 Paso Robles, CA 93446 805.237.0998

Yuba City Woodland

« Rocklin

Farm Credit West Administrative Office

DINUBA 940 W. El Monte Way Dinuba, CA 93618 559.591.9378



Tulare Capital Markets Templeton Kern County Santa Maria

HANFORD 1111 W. Lacey Boulevard Hanford, CA 93230 559.584.2681


IMPERIAL VALLEY 485 Business Park Way Imperial, CA 92251 760.355.0291

Tempe Imperial Valley Yuma

Rural Arizona/ Safford



19628 Industry Parkway Drive Bakersfield, CA 93308 661.399.7360

3003 S. Fair Lane Tempe, AZ 85282 602.431.4100





1120 S. 20th Avenue Safford, AZ 85546 928.348.9571

175 Cow Meadow Place Paso Robles, CA 93446 805.434.3665

2031 Knoll Drive Ventura, CA 93003 805.477.1020

1800 Lassen Boulevard Yuba City, CA 95993 530.671.1420





1178 Tama Lane Santa Maria, CA 93455 805.922.7991

200 E. Cartmill Avenue Tulare, CA 93274 559.684.1478

440 Pioneer Avenue Woodland, CA 95776 530.666.3333

2490 S. 5th Avenue Yuma, AZ 85364 928.344.3200

Farm Credit West | Winter 2017 19

3755 Atherton Road Rocklin, CA 95677


Profile for Farm Credit West

FCW Spotlight Winter 2017  

FCW Spotlight Winter 2017