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spotlight SUMMER 2018

Agriculture Meets Technology How California pistachio growers are looking to the future to solve today’s problems PAGE 6

Greenliners vs. Redliners

Ready to Take the Next Step at Your Operation? How to Present Your Project to Your Lender

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PA GE 1 6


Spotlight

President’s Message 3 

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10  – 11 12 – 13 14 15

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The Lifecycle of a Loan 2018 Holiday Schedule Meet Your Loan Accounting Team Farm Tours with FCA Regulators Agriculture Meets Technology: How California pistachio growers are looking to the future to solve today’s problems Community Center Greenliners vs. Redliners

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

Scholarship Recipients

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

 ilet Mignon with F Mushroom-Marsala Sauce

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

 eady to Take the Next Step R at Your Operation? How to Present Your Project to Your Lender Digital Strategy: Digital Appraisal Reports and Docusign Don’t be victimized: “Social Engineering” scams Territory and Office Locations

Mark A. Cook . . . . . . . . . . . . . . . . . . . . . . . . . . Willcox, AZ J. Dick Eastman . . . . . . . . . . . . . . . . . . . . . . . . Powell, WY Catherine Fanucchi. . . . . . . . . . . . . . . . . Bakersfield, CA Douglas C. Filipponi . . . . . . . . . . . . . . . . . . . Creston, CA Craig C. Gnos . . . . . . . . . . . . . . . . . . . . . . . . . . . Davis, CA Robert N. Hansen. . . . . . . . . . . . . . . . . . . . . Hanford, CA Blake Harlan. . . . . . . . . . . . . . . . . . . . . . . . . Woodland, CA Tom Ikeda . . . . . . . . . . . . . . . . . . . . . . Arroyo Grande, CA Colin Mellon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yuma, AZ

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.

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Spotlight

SUMMER 2018

Barry Powell . . . . . . . . . . . . . . . . . . . . . . . . Sacramento, CA Brian Talley. . . . . . . . . . . . . . . . . . . . . Arroyo Grande, CA


PRESIDENT’S MESSAGE Mark Littlefield, CEO

Providing Sustained Value to our Customers for 101 Years financial results that truly enables

success in the three primary

on the equity through our patronage program. Having

components of our Value

guiding principles that focus on placing the customer

Proposition requires that we

first enables your organization to make decisions

be vigilant and responsive to

that best serve the long-term interests of each

the economic and environmental

of our customer owners.

challenges that impact your opera-

Our commitment to these guiding principles align

tions as well as those that impact ours.

CE

commitment to you. Achieving

expectations, and strive to provide a meaningful return

S U S TA I N E D VA L U E

very well with the values that you live by in your

As Farm Credit West is a customer-owned coopera-

operations. Our Value Proposition to you requires

tive you have the unique dual role of not only enjoying

that your association looks to the future for ways

the benefits and value of being a customer, but you

that we can meet the changing demands of the

also hold the responsibility of electing board members

marketplace. Our efforts are focused on creating

from among yourselves to direct and govern this asso-

new and more effective ways for you to manage your

ciation. We appreciate your ongoing engagement

financial relationship with us through the development

with your association and congratulate our newly

of better technological tools to transact business,

elected and re-elected Board Members. Furthermore,

including: a simplified process that will enable you

I would like to convey my appreciation to our Board

to access all of your banking needs through a single

Members for their confidence and for their continuing

secure website; the ability to pay your business related

support and guidance — without which none of our

bills on-line and directly from your loan accounts;

accomplishments would be possible.

and the ability for you to remotely apply proceeds to your loan accounts.

ES

IOR SERVI

Farm Credit West to meet our

competitive rates, in a method that exceeds your

T I T I V E R AT

PER

directs us to provide products and services at highly

MPE

E

owners. In fact, our stated Value Proposition

CO U S T P AT R O N A G

results. It is the strength of our

B RO

times, and achieve solid financial

ment to build and deliver value to our customer

SU

E

very day, Farm Credit West acts on our commit-

It is with this in mind that we extend our thanks to you — our customers. Thank you for your business

Your association has worked hard over the past

and the confidence which you have shown in us.

16 years to build a highly diversified portfolio,

We are honored to serve as your partner.

and that diversity has enabled Farm Credit West to effectively manage through uncertain economic

SUMMER 2018

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A LO

G I N AT I O N ORI N

SI

G IN IC

hether you just picked

LY

up the phone to call your

S

RV

N A &

SE

A

W

The Lifecycle of a Loan

u

u

AP

loan officer to inquire about interest rates or

PRO

u

you are headed out the door to sign documents

u

DING

Farm Credit West’s loan process. During each step, our staff evaluates your request to ensure all is

LO

G N KI O

TIO

u N

u

SIGN

ING

Monday, September 3, 2018

Columbus Day Monday, October 8, 2018

Thanksgiving Day Thursday, November 22, 2018

Christmas Day Tuesday, December 25, 2018

Spotlight

SUMMER 2018

TA

Labor Day

N

Wednesday, July 4, 2018

A

Independence Day

M

(Farm Credit West and Farm Credit Services Southwest offices are closed.)

C

B

O

O

D

excellent customer service.

AN

in order as we continue to provide you with

U

UN & F

some point your funding request has moved through

2018 HOLIDAY SCHEDULE

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VA L

at your local title company, you can be sure that at

1. LOAN ORIGINATION

This is your first interaction with Farm Credit West. Many times this conversation happens over the phone and typically starts off getting to know you and your operation. Once we have some insight into your business we can recommend loan products, advance rates and pricing to meet your goals.

2. ANALYSIS & APPROVAL

Once all the pieces of the loan package are compiled, the loan package is analyzed by the Credit Analyst/Underwriting Team and then approved following Farm Credit Administration Regulations.

3. LOAN DOCUMENTATION During this process, your loan is sent to the Loan Documentation group. It is this team’s responsibility to examine, validate accuracy and prepare all aspects of the loan documents.

4. SIGNING

Loan documents are ready to be signed! A final and critical step in the signing process is collecting payment for purchase of common stock. This is the Farm Credit system buy-in that makes all our customers, our shareholders.

5. BOOKING & FUNDING

Once the loan documents are signed your Loan Officer requests the Loan Accounting Team book the loan. At this point, your project is funded.

6. SERVICING

Billing statements are produced and mailed in accordance with the repayment schedule specified in the Promissory Note. Remittance coupons are directed to Farm Credit West’s centralized accounting group in Rocklin or Branch staff may also accept and process payments.


Meet Your Loan Accounting Team Have you ever called requesting help when using Farm Credit West’s Online Banking tool? Do you ever wonder who books your loans? Are you curious who’s on the other end of the line when you are called to confirm a wire transfer? Our Loan Accounting team is a critical component of Farm Credit West. On a daily basis, our dedicated team members strive to respond and process your requests in a timely and accurate manner. However, not only are they customer service focused, but their first priority is to protect your financial interests as well as the association’s. Each day, our Loan Accounting team comes to work with the mindset of protecting you and your association from fraudulent activities while ensuring a customer focus — which can be challenging when confirming details and making corrections! They book the loans and leases and are the gate keeper for all funding. Our Loan Accounting staff responsibilities include reviewing and releasing funds — ensuring that the money is sent to where it was intended by the customer. Loan Accounting is also responsible for ensuring that payments received from borrowers are credited accurately. At Farm Credit West, we are customer focused — from the minute (FROM LEFT) Yetehetieri Soro, Kaila Montes, Verone Phillip, Dante Chesini, TJ Guraya, Jennifer Coffee, Shelley Kroeger, Cuca Parks, Michelle Doss, Brooke Sharp

you shake hands with your loan officer for the first time to the moment your loan is funded. Our Loan Accounting team is no exception.

FARM TOURS WITH FARM CREDIT SYSTEM REGULATOR As with all financial institutions, Farm Credit West is regulated by a government agency. Due to Farm Credit’s unique structure, all entities are routinely examined by an independent regulator, the Farm Credit Administration (FCA). It is important for FCA examiners to have a solid understanding of the customers and industries we serve. For this reason, Farm Credit West recently coordinated several local farm tours for a group of FCA associate examiners who are working towards full commissioning. Through this varied experience, the examiners gained a better understanding and greater exposure to Farm Credit West’s mission and value proposition to our customers. During the tour, the examiners visited the Center for Land-Based Learning in Winters, California where they viewed several two-acre incubation farm plots. Farm Credit West, through participation in the California Farm Credit Marketing Alliance, provides scholarship funding to the Center. Following their visit with the Center, the group visited a small but expanding operation also in Winters. That operation has grown over the years from 35 acres to now more than 200 acres, with substantial diversification. The final stop of the tour was a large vertically integrated farming operation that moves its commodities through both wholesale and retail channels. That operation is owned and managed by a sixth-generation farmer. The diversity in size, scope and commodity mix of the visited operations is reflective of Farm Credit West’s diverse customer base.

SUMMER 2018

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F E AT U R E S TO RY

Agriculture Meets Technology How California pistachio growers are looking to the future to solve today’s problems By John Frith

Like most fruit- and nut-bearing trees, pistachios require chill hours — hours when the temperature is less than 45 degrees Fahrenheit — during the winter to produce an optimum crop the following spring and summer. That hasn’t been a problem most years

Nature doesn’t cooperate. Fortunately,

pistachios. Things were going well for

for growers in the southern San Joaquin

researchers and growers are working

the Nichols family and for the industry

Valley, where the tasty nuts have become

cooperatively to experiment with different

as a whole.

a major crop in the 40 years or so they

ways of making the trees think it’s cooler

have been grown there. The region between

than it is.

Bakersfield and Fresno is known for damp, chilly winters and tule fog that’s often so dense you can’t see for more than a few feet in any direction. That’s been changing in recent years as winters have grown warmer, and the need is growing to find a way to keep the trees producing even in years Mother

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Spotlight

SUMMER 2018

Until the 2015 –16 growing year, that is, when the yields between their orchards

And there’s growing optimism that human

in Coalinga and orchards in Tulare and

ingenuity will find a solution.

Hanford varied by more than 3,500

A case in point is the Nichols family, which

pounds per acre.

have planted and grown pistachios across

Pistachios are particularly sensitive to chill.

wide swaths of California’s San Joaquin

The common female Kerman tree needs

Valley for the past 35 years. Crop yields

around 800 chill hours during the winter;

increased as the trees matured, and more

the common male Peters variety needs

and more farmers in the region planted

900. Almonds, by comparison, require just


450 hours. But there hadn’t been much research beyond

cards: “Mission: To strive for mutual success of our families

those rule-of-thumb estimations. So growers — especially

as well as the lives we touch by investing in our employees,

younger, more tech-savvy ones — started researching

customers, and suppliers through operational excellence

the problem and comparing weather and production

and educational development.”

to see how strong the correlation was.

Dan Oster, a Farm Credit West Vice President and Key

“We started collecting historical weather information,

Relationship Manager, Credit, said the family’s support

chill hours, and solar radiation from public sources,” said

of the industry as a whole is laudatory.

James Nichols, the third-generation family member who serves as vice president of the company’s Hanford-based farming operations.

“The Nichols are in the forefront of (research) and passing information on,” he said. “It benefits the industry. There’s only so much you can do to battle nature, but to do it you have to have an understanding of the problem.”

We’re interested in all pistachio growers being successful.

Researchers in many parts of the country have learned a lot about the science behind trees’ need for cold weather while dormant, and many now believe that chill hours alone aren’t the most reliable indicator. The Dynamic Model compensates for temperature fluctuations by calculating

“After the 2015 year, we started aggregating data and publishing information on a mapping system. And we found a big difference between orchards in Coalinga (on the west side of the valley) and Tulare.” The company is expanding the collection network by adding weather stations to address microclimate

chilling accumulation as “chill portions” using a range of temperatures from ~ 35 to 55 degrees. This model also accounts for chill cancellation caused by fluctuating warm temperatures. It begins September 1 instead of November 1 for chill hours. Chuck Nichols said a lack of fog is a major contributor.

changes, and even utilizing data from Weather

“The difference had to do a lot with fog. Fog insulates our

Underground, the online resource based on data

trees, so it doesn’t get as hot during the day. To a pistachio

from individual weather enthusiasts.

tree, 55 (degrees) and sunny is much warmer than 55

Nichols Farms posts its data online for other growers

and foggy,” he said.

and researchers to use. That may seem counter-intuitive,

Warmer winters and much less fog have been more

but Nichols said that attitude is part of their company DNA.

common in recent years, and while harvests rebounded

“We’re interested in all pistachio growers being successful,” he said. “The better other growers can manage their ranch and produce a quality product, the better it is for all parts of the industry and the consumers of our products.” Company president Chuck Nichols points to the company’s mission statement, printed on the back of their business

nicely the past two years — and look encouraging for this year — growers are increasingly taking steps to address the problem. For example, Joshua Nugent, project coordinator for RTS Agri Business, a major Kern County producer, said they have some 50 weather sensors in their orchards and have Continued on next page

SUMMER 2018

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found big differences between hills and gullies. With their

trees. In fact, anecdotally most new trees being planted

network of weather loggers, they can go back and look

in the valley are the Golden Hills and Lost Hills varieties.

at past years and draw curves for the four-month chill

Unlike almonds, which need to be replaced every 30 years

period of December-March.

or so, it is unclear how long pistachio trees can live

Nugent said newer technology allows the data to be collected automatically and obtained through cellular

for a relatively short time in the San Joaquin Valley.

connections so growers can determine in real time the

“When we began planting the trees, we hoped to get

amount of chilling in different orchards.

40 to 50 years out of them. Our oldest trees are now

Some growers apply horticultural mineral oil, or dormant oil, which is normally applied to deciduous trees in the winter

about 35 years old — and they are our most productive,” Chuck Nichols said.

to control scale insects. While some growers are skeptical

While it is unclear how long the trees will continue producing

of its effectiveness, researchers have found it can overcome

at high levels — Iranian farmers claim they have trees more

delayed leafing and erratic bloom caused by inadequate

than 1,000 years old that are still bearing nuts — he added

chilling — and significantly increase nut production.

that there’s no economic incentive to rip out mature trees

James Nichols said that this year they began applying a whitewash solution of kaolin clay, which has also shown promise. The whitewash is intended to reflect the sun’s

now, even with chill problems. That’s especially true since pistachio trees usually take nine or 10 years after planting before they generate a positive cash flow.

rays, keeping the tree cooler and mimicking the effect

A warming San Joaquin Valley isn’t the only problem

of fog. However, rain will wash the solution away, possibly

on the horizon for pistachio growers. State and federal

requiring more than one reapplication during the winter.

water supplies, groundwater quality, and the navel

Another strategy is creating mist systems above the canopies to mimic fog. Other tools might include more radical pruning to shock the tree to sleep, along with changing watering patterns. In the long run, newer varieties developed with industry funding by researchers at the University of California, Davis are hardier and require less chill than the Kerman and Peters

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and produce in California since they’ve only been cultivated

Spotlight

SUMMER 2018

orangeworm — the most-damaging caterpillar affecting pistachios — are bigger threats today, said Paul Nugent, a small Kern County operator and Joshua’s father. Bob Klein, the manager of the Administrative Committee for Pistachios in Fresno — the federal marketing order that regulates the handling of pistachios in California, Arizona, and New Mexico — said other problems will also need


We accelerated as fast as we could, and Farm Credit West was a great partner for us.

to be addressed in coming years, including how to harvest the nuts. Growers use machinery to shake the nuts off the trees, but as the trees get older and sturdier, eventually the trunks will no longer shake. That will force changes in operations, such as shaking individual branches, which will be more time-consuming and expensive. But despite the problems pistachio growers face, there is optimism that further research will allow them to adapt. And then there are the trees themselves, which Klein said tend to compensate from year to year and rebound after poor harvests. “When I got here in 1999, my boss said to try and predict future yields for the next five years. My first year I was off by 50 percent because it was a year with very poor chill. But the trees compensate, and if you look at the total yield

N

ichols Farms was founded by

Chuck Nichols’ father, Graydon, in 1954. Now the chairman

emeritus, for decades he grew row

crops including cotton, sugar beets, corn, and alfalfa on a half-section on the Tulare-Kings county line.

In the early 1980s, he decided to diversify, planting almonds in 1981 and pistachios in 1983. As the trees matured and began producing a few years later, father and son decided nuts were

for those five years, I was almost spot-on.”

the farm’s future.

In fact, the statewide harvest rebounded from

“We accelerated as fast as we could, and Farm

270 million pounds in 2015 to an all-time high of 897 million pounds in 2016. Ultimately, Paul Nugent perhaps put it best. “Chill is a worry, but it’s not in my top three. Pistachio growers farm a large number of acres and have

Credit West was a great partner for us,” Chuck Nichols said. “Capital loans and operating lines allowed us to accelerate the transition, and now we are 100 percent permanent crops.”

broad geographical diversity. We’re trying new methods and we’re trying new varieties. We’re watching, but we’re not panicked at all,” he said.

SUMMER 2018

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COMMUNITY CENTER

Cal Poly FFA State Finals BBQ Ryan Hoffman (Templeton) works with staff from J.B. Dewar to grill bread for over 3,000 students.

ON MAY 5, 2018 Farm Credit West employees and families volunteered to work the Cal Poly California FFA State Finals BBQ for the 35th year along with Farm Supply and J.B. Dewar, preparing the tri-tip and bread for BBQ then slicing and serving the meal to over 3,000 FFA Finals participants and volunteers from all over the state of California. Staff trimmed tri-tip from 8:00 AM to 11:30 AM while the J.B. Dewar team BBQ’ed, then switched to slicing the cooked tri-tip and bread before serving.

National Youth Ag Day Farm Credit West showed its support for the 16th Annual Youth Ag Day on March 20. The event was held at the Solano County Fairgrounds and was attended by Loan Officer, Nicole Swanson. Every year, this event is organized by the Agriculture Council of America (ACA), an organization uniquely composed of leaders in the agriculture, food and fiber communities dedicated to increasing the public awareness of agriculture’s vital role in our society.

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Spotlight

SUMMER 2018


COMMUNITY CENTER

Farm Credit West Exhibits at High School Ag Career Day

Fresno Grizzlies’ Wild About Reading Program

Earlier this spring, Farm Credit West’s staff participated

For the fifth straight year, Farm Credit joined with the Fresno

in the 2018 Ag Career Day at the International Agri-Center

Grizzlies baseball team to sponsor the Wild About Reading

in Tulare, California. At this event, staff met with high school

program. This program encourages young students in the Central

students, explained Farm Credit West’s unique business model

San Joaquin Valley to be excited about reading. Wild About

and mission, and discussed ways for these students to align

Reading is a key component of the Grizzlies Community Fund’s

their skills and interests with career opportunities in agriculture.

Farm Grown program, which promotes the agricultural heritage

Many of these students were introduced to the variety of career

and philanthropic vitality of the Valley through building meaningful

paths available in agriculture for the first time at this event.

partnerships in support of education and healthy living.

Land-Based Learning California Farm Academy Farm Credit West joined with other California Farm Credit associations to financially support the Land-Based Learning’s California Farm Academy program earlier this year. This program offers a seven-month training program for adults interested in becoming farmers. In addition, this grant provided financing to the Farming, Agriculture, and Resource Management for Sustainability Leadership Program (FARMS), which introduces high school students to college and career opportunities in agriculture, especially in the STEM fields of science, technology, engineering and math. We are honored to support these young farmers as they continue with their agricultural education.

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D R . KO H L’ S C O R N E R

Greenliners vs. Redliners By Dr. David M. Kohl

Into its fifth year, the economic reset is demonstrating a clear delineation between the greenliner businesses and the redliner businesses. Those farms and ranches generating a profit or with minimal losses are the greenliners; and those with mounting losses are the redliners.

F

arm record databases, such as the FINBIN Database,

In addition, they tend to maintain working capital or current

find the gap in net income increases significantly when

assets in greater amounts than current liabilities. This affords

analyzing farms that have gross income of $1 million

them the flexibility to be a price maker rather than a price taker.

or more. Of course, at this point in the cycle marketing, management, and financial mistakes are compounded as a result of business size. For comparison, let’s examine some of the characteristics of the greenliners versus the redliners.

THE GREENLINERS One common characteristic of the greenliner businesses is their balanced, systems approach in the major components of the business. Specifically, when it comes to production, marketing, financials, and overall efficiency they appear to do just a little bit better. This is also called the five percent rule: a five percent improvement in several areas of the business is a good way to significantly impact the bottom line. This segment is also very familiar with the four cornerstones of management: planning, strategizing, executing, and monitoring. They make the time to prioritize strategies in order to allocate their resources to the places with the highest rates of return. Where some will only make a plan, the greenliners actually execute their plans and accept the consequences. Yes, this may include missing the highest price point in the market; yet these businesses know their cost of production and are committed to realizing a profit, even if small.

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Spotlight

SUMMER 2018

Still part of the four cornerstones, monitoring is another common characteristic among greenliners. Whether it is production, cost efficiency, or financial ratios, the greenliners examine trends (positive and negative) and implement corrective actions moving forward. Next, greenliners exhibit a sound financial system. Often, they are enrolled in a farm record service and employ an accountant familiar with the agriculture industry. In short, greenliner businesses exhibit a good understanding of their numbers and how they impact their business strategy.

THE REDLINERS Now, let’s examine some general practices of the redliner businesses. Many of today’s redliners were focused on growth several years ago. And of course, growth is the number one reason why businesses fail. That is, growth of the business revenue outpaces the management ability or management transition. Actually, much of this group also overpaid for marginal assets while expanding. Before too long, the lag in management and overburden of purchases set these businesses behind.


Another attribute common to this group is a singular focus

FORECAST FOR THE FUTURE Now, with greenliners and redliners clearly delineated,

on production. Frequently, they do not understand the basic

what is the forecast for the future? Well, the greenliners

principle of marginal cost to marginal revenue. In other words,

will selectively grow their businesses where opportunity

redliner businesses ignore the cost incurred to increase

aligns with their talent, resources, and potential ability

production and whether the increase actually improved net gain.

to market their products. The redliners, on the other hand,

Instead, they operate under the philosophy of bigger is better.

will be in a constant mode of refinancing or restructuring debt.

One obvious practice of the redliners is a lacking financial

Often, their decisions will be emotional with a haphazard

and marketing system. In cases where an accountant is

approach to management, rather than working with

employed, often there is no tax management strategy, only

an advisory team or their lender.

minimization. It seems this group prefers to operate in denial

The next few years will produce one of two possible outcomes;

as most have an incomplete picture of financials, cannot pinpoint

red or green. Regardless of which side one ends up on,

their cost of production, and do not know the most or least

the outcomes could determine the trajectory of one’s financial

profitable areas of the business. In many cases, the redliners

future for years to come. While there is a clear difference

conduct an annual “drive-by” of their financials and become

between those businesses in the greenliner and redliner

indignant over financial questions from lenders and others.

categories, there are options for both segments. And for those

Another significant challenge for the redliners is high family living

willing to make difficult changes and decisions, it may not

cost, but not merely because of costs. Frequently, redliner

be too late to switch colors.

businesses support multiple generations and several families, which is simply not sustainable in today’s environment.

2 016 N E T FA R M I N C O M E B Y FA R M S I Z E FINBIN Database, Minnesota Median by Gross Income in Thousands 600,000 500,000 400,000 300,000 200,000 100,000 0 -100,000 -200,000 -300,000 -400,000

< 100

100 – 250

All Farms

250 – 500

High 20%

500 – 1,000

1,000 – 2,000

> 2,000

Low 20%

Net Farm Income by Farm Size. Adapted from “2016 FINBIN Report on Minnesota Farm Finances” by Center for Farm Financial Management, University of Minnesota, May 2017. Copyright 2017 by Center for Farm Financial Management, University of Minnesota.

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Congratulations to our 2018 Scholarship Recipients! Recipients have clearly demonstrated their commitment to agriculture and worked to make a difference in their communities. These students will receive a $1,500 scholarship towards higher education for the 2018  –19 school year. Scholars who continue to maintain academic excellence are eligible to renew their $1,500 scholarship for up to three years after their initial award, bringing the total award available to $6,000 per scholar. For students renewing their scholarship, please send your 2017–18 transcripts to scholarships@farmcreditwest.com by July 1, 2018. Farm Credit West’s college scholarship program is an important component of our commitment to young and beginning farmers. By supporting the education of these students, we are investing in the future of agriculture.

Over the past

24 YE ARS Farm Credit West has awarded over

$797,500 in scholarships to

232 STUDENTS

OUR 2018 S CHOLA RSHIP RECIPI ENTS SARINA SOHAL Yuba City, CA

LAILA ROLLIN Riverdale, CA

JACQUELINE TAYLOR Sanger, CA

UC Davis AgBus Finance

Cal Poly, SLO Ag Communications

Fresno State Animal Science

Kamaljit Sohal

Donald Rollin

Curtis Taylor

BAILEY GRUBER Visalia, CA

HAYLEY FERNANDES Tulare, CA

JUSNEET BOPARAI Fowler, AZ

Texas A&M Animal Science

Cal Poly, SLO Animal Science

UC Davis Environmental Policy

Timothy Gruber

Frank and Diane Fernandes

Boparai Farms

SARAH ARDANTZ San Luis Obispo, CA

PAYTON PASCHOAL Winters, CA

JACOB MADDEN Paso Robles, CA

University of Arizona Agribusiness

Cal Poly, SLO Ag Communications

Purdue Agriculture Engineering

Mitchell Ardantz

Rob Paschoal

Tom and Lori Madden

PAUL ABATTI Imperial, CA

LUKE ROSSI Aptos, CA

RHEGAN FERNANDES Tulare, CA

University of San Diego Accounting

4th Year at Cal Poly, SLO Ag Engineering

Colorado State Agribusiness

Alex Abatti

Linda Rossi

Gregory Fernandes

DANIELA ABATTI Imperial, CA

LINDSEY SWALL Tulare, CA

ASHLEY TARTAGLIA Delano, CA

Oklahoma Panhandle State Animal Science

Cal Poly, SLO Plant Science

Cal Poly, SLO Animal Science

William Swall

Anthony Tartaglia

Alex Abatti

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Spotlight

SUMMER 2018


F RO M T H E FA R M E R ’ S K I TC H E N

Filet Mignon with Mushroom-Marsala Sauce By David Penney, Sr. Vice President – Regional Underwriting; Tempe Branch

INGREDIENTS 4 6-ounce filets mignon Salt and pepper to taste 3 tablespoons butter, divided 2 cups sliced mushrooms ¾ cup Marsala wine ¼ cup balsamic vinegar ¼ cup thinly sliced green onions P R E PA R AT I O N Season both sides of filets with salt and pepper. In a large, heavy skillet melt 2 tablespoons of butter over medium heat. Add the filets and cook for approximately 4 minutes on each side, or until desired doneness. Remove filets from the skillet and keep warm. Add the sliced mushrooms to the skillet and sauté for approximately 1 minute. Deglaze the pan with the Marsala wine. After 30 seconds, add the balsamic vinegar and heat until the liquid is reduced by half. Remove from heat and add the green onion slices. Stir in 1 tablespoon of butter. Season with salt and pepper, if desired. Ladle sauce over filets and serve.

We’re in this together We’re a true member-owner cooperative – offering loans, leases, competitive rates and unmatched service. We are your partners in agriculture – your success is our success.

FarmCreditWest.com

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800.909.5050


C A N D I D C O N V E R S AT I O N S

Ready to Take the Next Step at Your Operation? How to Present Your Project to Your Lender By Jennifer Campoy, Sr. Vice President – Credit; Kern Branch

Few will disagree that farming today is in many ways different from what it was fifty, twenty-five, or even ten years ago. The changes we have experienced over the last several years have encouraged growers to look around their operations to identify new efficiencies in an effort to maximize profits. With every passing year, technology plays an increasingly import-

operation. Present your ideas to your lender and brainstorm

ant role as growers look to reduce costs and increase yields.

with them to identify ways in which you can protect your

Diversification has also become important and operators are looking

business. Demonstrating that you have thoroughly thought

to expand into new commodities that will improve their bottom line.

through all your options builds confidence with your lender.

As new ideas grow, so does the price tag. Often times, the need

4. R  ecognize that your goal presents unique risks which may require you to be flexible. As a cooperative institution,

for financing new projects can be overwhelming. Below are a few tips for when it comes time to approach your loan officer about

your Farm Credit lender has the primary objective of protecting

seeking financing for your new, innovative idea.

the association’s assets to ensure all customers will continue

1. Have a plan. Develop a written plan that contains details on the strengths, weaknesses, opportunities, and threats (SWOT Analysis) for pursuing your new project. Talk with others that have pursued a similar task and identify what went well and what they would change if they were to do things over again. Reach out to your local university, commodity board/ association, or Pest Control Advisor to see if research has been done in the area that would benefit you as you develop your plan.

2. Understand the numbers. Develop a projected income and expense statement. Prior to entering costs and estimated profits, research the figures thoroughly. When you present the budget to your lender, they will likely ask you to verify the numbers. Consider the amount of time it will take to recover the funds of the investment through increased earnings or reduction in expense. By working with your lender to establish conservative and realistic figures, you will be in a preferable position even if your project does not progress as planned.

3. Develop multiple exit strategies. As you develop your project plan, identify multiple ways in which you could exit the project with the least amount of damage, both to your wallet and your

to benefit from low rates and a robust patronage program. Regardless of how well you prepare, situations out of your control may impact the success of your plan. Understand this as you discuss your new project with your loan officer and be flexible and open to new ideas to help mitigate risk. Below are a few ideas for ways in which this could be accomplished: ww Pledge traditional collateral ww Provide a personal guarantee to provide additional financial strength ww Suggest more conservative loan terms such as lower advance rates ww Involve knowledgeable, successful individuals who have pursued a similar plan in the past as a partner Are you ready to take the next step at your operation? With a little preparation, you will begin your new journey in a much more favorable position. It is important to remember as you work through your plan that your loan officer is your partner. Regular communication and brainstorming sessions are great ways to ensure your ultimate success.

Jennifer Campoy is a Portfolio Manager based out of Farm Credit West’s Kern County branch, primarily overseeing customer operations with permanent nut crops. Jennifer has been employed with Farm Credit West for 19 years. She can be reached at Jennifer.Campoy@FarmCreditWest.com.

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D I G I TA L S T R AT E G Y

Digital appraisal reports now available! Farm Credit West is now providing customers with the option to receive a digital copy of Appraisal Reports. This paperless option will be made available by logging in securely to myFCW and clicking on “My Documents”. Digital copies of these reports are frequently available sooner to customers than a traditional hard copy. Ask your loan officer today to find out how you can receive your next appraisal report electronically.

Customers are now enjoying the benefits of signing documents electronically. Farm Credit West has now completely implemented the use of DocuSign for customers at all branch locations. By using this online tool, customers are now able to sign Commercial Loan packages such as loan renewals and lease document packages digitally. (Documents requiring a notarized signature are excluded.) DocuSign can be used on all servicing documents (non-notarized) such as conversion agreements, extension agreements, etc.

Using DocuSign to complete loan and lease documents saves time and energy.

See what our Loan Officers have to say.

“Recently we used DocuSign with a borrower that was out of town attending an industry conference while his wife was at home. We had a small package they needed to sign and through using this new tool, were able to turn it around in only a few minutes. When I later ran into the customer in person, his first comment on greeting me was, ‘I signed those papers

“I love DocuSign. I see the greatest value in documents that are time sensitive like Conversion or Broken Funding agreements. Those can be out to the borrower and back the same day the documents are prepared. It is easy to use and all my customers seem to enjoy the benefits.” — Ryan Camara, VP – Credit; Tulare Branch

this morning on my phone and it worked great.’ Another benefit we see is not having a packet of documents returned back to us through the mail only to realize the borrower missed signing or initialing one page. Fixing this type of error is obviously time consuming and frustrating. DocuSign eliminates this situation.” — Mark Brawley, Sr. VP – Credit; Rural Arizona Branch

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T E C H WATC H

Don’t be victimized: “Social Engineering” scams By Michael Levin, CEO/Founder of the Center for Information Security Awareness | cfisa.com

ONE OF THE MOST EFFECTIVE and dangerous techniques criminals use to commit their crimes is called social engineering, and it’s vitally important that you learn how to recognize this serious threat. Social engineering uses social interaction as the primary means to trick or persuade you to disclose confidential information that can then be used against you. Social Engineering scams can happen in person, over the phone, or via email phishing scams.

Warning signs that a hacker may be trying to socially engineer you: ww Any request for personally identifiable information (PII). (PII is defined as “any information about an individual maintained by an agency, including (1) any information that can be used to distinguish or trace an individual’s identity, such as name, social security number, date and place of birth, mother’s maiden name, or biometric records; and (2) any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information.”)1

ww Creation of a sense of urgency or emergency to force your fast action without time to react appropriately.

The main goal of social engineering is to trick you into providing

ww Excessive flattery or attempts at persuasion through flattery.

the criminals with valuable information that can later be used

ww Threats. “If you don’t do it, you’ll get in trouble or there

to steal data and obtain funds illegally.

will be ramifications.”

Cyber-criminals are excellent students of human behavior and will spend significant time studying the predictable behavior of their victims. The purpose of their study is simple — to create attack strategies and scenarios that will take full advantage of your predictable behavior, and use your mistakes to steal your information.

ww Refusal to give a call back number or unwillingness to provide normal contact information. Because most social engineering attacks are attempts to gain information that an attacker can’t easily get elsewhere, the mere fact that a stranger asks for the information should be a clear warning. Recognizing the possible signs that a criminal is attempting

Techniques that hackers may utilize to victimize you:

to socially engineer you is now important every day.

ww Researching your social media and online accounts.

Final thoughts:

Looking at your postings on social media or other Internet postings. This could give them background data that can later be used to trick you into providing information. This could also include looking at your friends’ and family members’ postings to gain intelligence information that can be used

ww Never give any confidential information to someone you don’t know, and especially never to a telephone caller. ww Take your time and verify all contacts independently requesting your sensitive PII data. ww Limit the information you share on social media sites.

to lure you into their scam. ww Ruse phone calls to gain initial information. Exploiting your willingness to be helpful and openly provide sensitive information. ww Phishing email messages posing as friends, family

We must think about our security every day. Don’t wait until you or your family have been victimized to do something to protect yourself. It is so important to understand the day to day risk and help to ensure that your data is protected. Cybercriminals

or co-workers. ww Emails or calls posing as a company you do business with.

depend on your lack of vigilance to strike when you least expect it.

1 https://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublication800-122.pdf Michael Levin is a nationally known cyber security professional who spent over twenty-two years in the U.S. Secret Service protecting Presidents and Heads of State. Michael retired from the U.S. Department of Homeland Security — as the Deputy Director of the National Cyber Security Division in Washington DC. He enjoyed a distinguished thirty-year career in public service and law enforcement.

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Territory and Office Locations ADMINISTRATIVE OFFICE 3755 Atherton Road Rocklin, CA 95765 916.780.1166 PASO ROBLES 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

Hanford

Dinuba

Tulare Paso Robles Templeton Kern County Santa Maria

HANFORD 1111 W. Lacey Boulevard Hanford, CA 93230 559.584.2681

Ventura

IMPERIAL VALLEY 485 Business Park Way Imperial, CA 92251 760.355.0291

Tempe Imperial Valley Yuma

Rural Arizona/ Safford

KERN COUNTY

TEMPE

19628 Industry Parkway Drive Bakersfield, CA 93308 661.399.7360

3003 S. Fair Lane Tempe, AZ 85282 602.431.4100

RURAL ARIZONA / SAFFORD

TEMPLETON

VENTURA

YUBA CITY

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

SANTA MARIA

TULARE

WOODLAND

YUMA

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

SUMMER 2018

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3755 Atherton Road Rocklin, CA 95677

Get Out of Town. Dreaming about a home in the country?

Farm Credit West can help connect your dreams to reality with a new Country Home Loan program offered through Northwest Farm Credit Services. This program is specifically designed to meet the unique needs of rural property owners. If you already own a home, excellent refinancing options are available too.

Country Home Loans | Bare Land and Lot Loans | All-in-One Constructions Loans

Contact Matt Macedo, Relationship Manager

NORTHWEST FARM CREDIT SERVICES NMLS#1729210

o 559.697.4943 | m 208.252.0152 northwestfcs.com

Equal Housing Lender This institution is an equal opportunity provider and employer.

Country Home Loans may be offered in areas served by Farm Credit West, ACA with their express written consent. If made, any Country Home Loan in an area served by Farm Credit West, ACA will be owned and serviced by Northwest Farm Credit Services, FLCA.

Profile for Farm Credit West

FCW Summer Spotlight 2018  

FCW Summer Spotlight 2018