Partners - Fall 2010

Promoting the business success of our customers and the rural community

Fall 2010

Discussing

new main office

market outlook

growing for you!

the 2012 farm Bill

Where we go from here

Regulation

The EPA and farming

we’re building represents “ New the agricultural industry and our commitment to customers

”

Editor's

Note Fall 2010 Published by:

GreenStone Farm Credit Services

2 Comments from CEO Dave Armstrong CEO Dave Armstrong highlights the opening of GreenStone's new corporate office and the many benefits of this momentous achievement.

Another year has entered its final months, and for most of us it represents one of the busiest times on the calendar. With October upon us, we now are weeks into a new school year, harvest is in full swing—if not already completed in some areas, and the holidays will be here before we know it. At GreenStone, as many of you are already aware, the past few weeks have included getting acclimated to a new corporate office in East Lansing… a facility that we are very excited about and would like for any of our customers to visit if you are in the area. In the meantime, you can read more about the new building and view multiple photos in this issue of Partners, along with information on this year’s GreenStone scholarship recipients as well as the latest Market Update from Bob Utterback.

Happy reading…and as always, your comments and ideas are welcomed.

5 Market Outlook Ag Economist Bob Utterback forecasts the future market and sheds some light on the key indicators going forward.

9 Directors' Perspective Three GreenStone Directors evaluate the 2012 Farm Bill and its potential impact on the dairy industry.

11 New East Lansing Headquarters Effective September 13, GreenStone Farm Credit Services officially moved into its new corporate headquarters in East Lansing, Michigan.

11 15 Guest Column What does the EPA expect from farmers and how can you protect yourself from regulatory backlash.

18 GreenStone Establishes State PAC in Michigan GreenStone establishes State PAC in Michigan to engage political forces in the agricultural and business arena.

Fall Notes 3 News Update 8 Scholarship Winners 14 Michigan Livestock Auction Recap 17 GreenStone Interns 18 Candid Comments

Please note: GreenStone offices will be closed in observance of the holiday season on the following dates: November -Thursday, 25th -Friday, 26th December -Thursday, 23rd -Friday, 24th January -Monday, 3rd

This newsletter is published quarterly for the customers of GreenStone Farm Credit Services.

Partners, 3515 West Road, East Lansing, MI 48823 • 517-318-2290 • marketing@greenstonefcs.com

Comments From CEO Dave Armstrong

A new beginning– I am pleased to announce that the new GreenStone Corporate office has been completed. East Lansing staff members moved in during the weekend of September 11-12 and were open for business on Monday, September 13. The new office is located approximately a quarter of a mile north of our former location right along the east side of US 127 just north of the Lake Lansing Road Exit at 3515 West Road, in East Lansing.

This project started over three years ago as the organization was experiencing rapid growth with no room for expansion at its former location. Many alternative plans were analyzed and considered by the GreenStone Board, which ultimately decided to build a new facility. Closing on the 16 acre building site occurred at the end of 2008 just as the full impact of the financial markets’ collapse was becoming more apparent. During the winter of 2009, the Board and executive management team continued to monitor the financial environment and seriously questioned whether or not they should proceed with construction that spring.

However, the decision was made to seek bids to determine final construction pricing in early spring of 2009. After the bids had been received, we were very pleased with the significant cost savings that could be achieved during this difficult financial period. This, coupled with stabilization of the financial markets, helped the Board make the decision to move forward with construction on June 22, 2009.

The new building consists of 78,000 square feet which will provide ample space to house all of the association’s central office staff under one roof while providing a great deal of flexibility for future growth. Approximately 30 members of our Information Services staff were located across the street from the old building in leased space.

The interior of the new building is very open with lots of outdoor light to create a bright and spacious work environment. The open floor plan will also foster more collaboration between the various departments and work teams. The structure and site (including parking) have also been designed to easily accommodate another wing should

future growth ever necessitate additional space. In fact, we have 5,700 square feet to lease until such time that we may need the space for future growth.

I am also pleased to announce that we have secured a six-year lease on our “old” building which will provide the association with an income stream as we continue to market it for sale. The cost of the new building was well within our financial means at just over $16 million (including land, structure, new furniture, and information technology) and has only a negligible impact on our return on assets, capital, and cost of operations.

Of course, projects like this take a herculean effort by many to insure a successful outcome and this was certainly no different. I want to take this opportunity to thank the members of our Board Facilities Committee including Committee Chair Lynn Gould, Lyn Uphaus, Darl Evers, Cathy Webster, and Dennis Muchmore for their leadership and vision in guiding the organization through this process.

I also want to recognize Travis Jones, CFO, and Clint Huhn, Facilities Manager, for countless hours of following up on details and making innumerable “little decisions” that are so critical to a successful outcome. Of course, I cannot forget Jim Schiller, former GreenStone CEO, and Pat Gnandt, former GreenStone Executive Assistant, who were there in the initial planning and construction phases. The project also would have never happened as smoothly as it did if it were not for our project consultants Paul Rivetto and Art Eckert with Plante Moran CRESA; Lise Newman and Paul Landry, principals with Landry + Newman Architecture; and our general contractors the Wieland-Davco Corporation including Jerry Risch, Project Superintendent; Matt Getchell, Senior Project Manager; Ben LeBlanc, Assistant Project Manager; and Jerry Kirkland, Vice President…plus, the countless number of sub-contractors whose craftsmanship and work ethic provided us with a beautiful structure that Continues on page 4...

Fall 2010

Partners

2

News update

News Update Fall 2010 ď‚ Michigan Farm Bureau 2010 Ag Expo Wrap Up President Wayne Wood took part in dunking GreenStone CEO Dave Armstrong during this year's Ag Expo.

GreenStone FCS made quite a splash at this year’s Ag Expo...456 dunks worth to be exact! The dunk tank fundraiser, featuring CEO Dave Armstrong, raised $1,368 for the Michigan FFA. Each time a staff person was dunked, GreenStone FCS made a donation to FFA in effort to continue supporting youth leadership development in Michigan and agriscience education initiatives.

In addition to the excitement generated by the dunk tank event, GreenStone FCS also gave away

3

Partners Fall 2010

a $500 gift card to Tractor Supply Company. Donald Sisung of St. Johns was the lucky recipient drawn from a pool of registrants.

Staff members were encouraged by the number of people who visited the GreenStone tent, and also by the attendance of the show as a whole. According to Ag Expo director Ruth Borger, the total attendance for 2010 was 15,500. The expo drew about 250 commercial vendors and 30 educational exhibitors. After over 30 years of participation, GreenStone FCS is proud to be a part of this agricultural event.

News update

Breakfast On The Farm Real maple syrup, pancakes, pork sausage and ice cream were enjoyed by 1,500 visitors at the “Breakfast on the Farm” on July 24 at the Bryant family’s cash crop and livestock farm near Shepherd, Michigan.

Attendees also got the opportunity to learn about caring for animals, operating farm equipment and growing crops at various educational stations.

Also, the breakfasts at Steenblik’s dairy farm near Pewamo, Michigan on June 19 and Horning’s dairy farm in Manchester, Michigan on June 26 hosted more than 4,600 attendees combined.

GreenStone FCS is proud to have helped sponsor these events, which celebrate our agricultural industry and educate the public about its importance to America’s food supply. In addition, there is a fourth breakfast being planned for Saturday, October 16 in Alpena, Michigan at the Tolan Family Dairy at 10:00 a.m.

For free tickets go to www. breakfastonthefarm.com.

the proposal. Though many believe Michigan government needs change, we believe this can happen in a more fiscally responsible way. A political convention to rewrite the state constitution is not the preeminent solution.

A few reasons to Vote No on Proposal 1: 1. It is estimated the convention would cost taxpayers at least $45 million to elect delegates and conduct the convention.

2. Rather than working to fix Michigan’s problems, the new governor and legislation will essentially be put on hold while the process of the constitutional convention is completed.

3. A two-year convention process will create more uncertainty for Michigan job providers and schools.

Investments, new initiatives and reforms will also come to a halt.

GreenStone Opposes Michigan's Proposal 1 The November 2 ballot will include several proposals for voter decision. In Michigan, the first of these, Proposition 1, asks if Michigan should convene a Constitutional Convention for the purpose of drafting general revision of the state constitution.

GreenStone FCS is among numerous organizations and individuals who oppose

To join the opposition of Proposal 1, or to find out more details on the Constitutional Convention, visit www. nomichiganconcon.com.

...CEO Comments continued will last for years and years to come. This was a fantastic team of people to be around who are all very good at what they do and who I will be forever grateful to for what they all came together and completed for our organization.

Just over 10 years ago, GreenStone was formed by the consolidation of the four Farm Credit associations serving the lower peninsula of Michigan with $1.3 billion in assets.

Today, GreenStone is a $5.1 billion financial institution that includes not only the entire state of Michigan, but 11 counties in northeast Wisconsin as well, with 19,000 customers, 450 employees and 37 branch offices. While the foreseeable future indicates a much slower growth environment, GreenStone is well positioned to serve the rapidly changing needs of its marketplace for many years to come. The new corporate office will serve as a symbol of the contributions agriculture has, and will continue to make, to the broader economy in both Michigan and Wisconsin.

GreenStone, as a financial institution, has fared well during the last two years of economic turmoil in large part because of the overall strength of the agricultural industry and our stockholder/members commitment to honor their financial obligations to the very best of their ability. Those of us who work for GreenStone recognize this and are blessed to serve those who work so hard to feed, house, and clothe us. The new GreenStone Corporate office is “your house” and we would love to have you stop in anytime to see us!

VOTE! One final reminder, remember that Tuesday, November 2 will host one of the most important elections we have seen in recent times. Our country is experiencing some of the most significant challenges it has faced since World War II. It will be more important than ever to learn all you can about where candidates stand on the issues and then get out and VOTE. GreenStone’s Board has chosen not to endorse candidates this year but, has raised some PAC Funds to contribute to those who it believes will best represent agricultural and rural interests in both Michigan and Wisconsin. Once the election is over, we will be working with other agricultural organizations to educate the scores of new office holders about our industry. The political process doesn’t end on November 2, it only just begins!

Have a safe and productive harvest and feel free to contact me anytime if I can be of service at dave.armstrong@ greenstonefcs.com or at 517-318-4105.

Dave Armstrong

Fall 2010

Partners

4

MArket outlook

Market Outlook

Fall 2010

By Bob Utterback

After one of the wettest and hottest summers in a long time for the Midwest, the crops have reached maturity and harvest is well ahead of schedule in many states. While concern about the crops will persist clear to the January USDA reports, the market will get a firm handle on the crops very quickly into the harvest cycle.

Right now the trade’s bias is that the corn crop will fall short of the USDA expected 165 crop, and will more than likely fall closer to 163, while soybeans could actually meet and exceed the 44 bushel August estimates.

What does this mean to producers and end users?

It has not been a quiet year for corn producers. It appears we are now in a strong demand market that only gets stronger when there is any type of yield reduction event.

So what has changed since early this summer?

The big change was when the Russian wheat market experienced a major drought. This woke up the end users around the world! Not only did end users have to realign their wheat commitments, but the fear of a repeat of 2008 has sent the corn and soybean end users all around the world working to lock up commitments.

The net result calls for a move in corn back to $5, wheat to $8 and soybeans to $12 are now 5

Partners Fall 2010

commonplace. Before spending the money, I feel I must point out several things have to happen for this to occur and for the bulls to realize their dreams of gold in the bin:

1. We need to confirm that last year’s corn and soybean crops were overstated. This should cause a downward revision of carry-in on the January reports.

4. The crude oil market needs to start showing solid signs of breaking above $88/barrel and ignite interest that ethanol may go up.

2. Corn and soybean yields need

5. The Dow or stock market

3. The U.S. Dollar must remain

6. The final key would be

to fizzle out. I suggest a corn yield below 163 and a soybean yield below 43 is needed to help stabilize the bull’s agenda. at current levels and move lower to continue to encourage exports. Additionally, a weaker U.S. Dollar will continue to motivate China, a big holder of U.S. Dollars, to buy grains consistently from us.

must remain range bound and encourage money to flow into commodities rather than into the equities. continued concern about weather patterns. With all the abnormal weather patterns around the world, everyone will be on pins and needles if the U.S. has a dry winter. The bulls are already suggesting “remember 1988!”

MArket outlook

Summary: Solid signs are developing that upside, rather than downside, risk exists for all commodities as we move into the early part of 2011. The net impact will be that producers are getting bullish, storing more inventory unpriced and preparing to increase production due to the rise in 2011 corn and soybean prices.

I believe the net result is that the risk is quite significant that the highs will come earlier than everyone is ready for and setting up the potential for a major price decline when acres and yields are confirmed. For now the bear is taking a small nap, and just bidding his time when he can feed on a fattened up bull next summer.

What should one do?

The first thing is it’s time to get input costs locked up for anticipated 2011 production. With the potential for large increases in all commodity acres planted next year, the demand for fertilizer, fuel, and seed should increase; get all input costs locked up now!

Start asking yourself what you really expect to make on 2011 and 2012

production? My review of historical data (except for 2008) suggests a profit above all direct and variable costs of $200/acre to $250/acre is a target to fight to accomplish. If we assume a $3.50 cost/175 bushels and $.25 under basis, December 2011 corn would need to close at $5.64, which is very reachable. In fact, if this market were to post $5 and keep costs constant, a profit in excess of $235/acre may be possible. The implications are clear; not only must a quality product be produced at a high yield per acre, but input costs must be kept low and then the product must be merchandized effectively. While I know it’s difficult, the rewards can be significant for producers in light of a general economy that is really suffering.

Finally, ask yourself how you will sell production if your high profit targets are reached. Remember, not that long ago the elevators were tapped out and they stopped buying, so I believe putting hedges on paper will be required. If you know you are going to have a difficult time selling into a spring to summer event, consider

buying out-of-the-money calls this fall. I like to call them courage calls.

It’s not that they are expected to make a lot of money; they really help make cash or futures sales on strong bullish days because an insurance-like policy was purchased to protect price in the event of a major summer yield reduction event.

Be safe out there this fall. When you get tired, take a break rather than push and make a serious mistake.

ABOUT THE AUTHOR Bob Utterback is the Economist for Farm Journal magazine and President/CEO of Utterback Marketing Services, Inc., located in New Richmond, Indiana. He has over 27 years of experience analyzing ag commodity markets, with special emphasis on the corn and soybean markets.

Contact him by phone 765-339-7704 or by email: utterback@utterbackmarketing.com. he opinions stated herein are not necessarily T those of GreenStone FCS.

Fall 2010

Partners

6

News update

Fall Into a Career with GreenStone...

Looking to make a positive move?

We currently have openings for qualified applicants in the following areas: • Financial Services Officer • Accounting/Tax Accounting • Branch Operations For more information or to apply visit our website at www.GreenStonefcs.com.

AutumnFest 2010

2010 Election Results

The Michigan State University College of Agriculture and Natural Resources is once again hosting AutumnFest, Saturday, November 20, at the MSU Pavilion for Agriculture and Livestock Education. The event, which starts three and a half hours prior to the kickoff of the MSU-Purdue football game, is an opportunity to join friends, family and fellow Spartans for a day filled with food, fun and football.

GreenStone Farm Credit Services announced the election results for four seats on its Board of Directors earlier this year. They are as follows: in Region I (Michigan), incumbents Lynn D. Gould, from Clare County, and Gilbert E. Ritter, from Saginaw County; and in Region II (Michigan), incumbents David J. McConnachie, from Sanilac County, and Scott A. Roggenbuck, from Huron County, were all re-elected to three-year terms.

Guests will have the chance to mingle with supporters from Michigan’s agricultural and natural resources industries, while raising money for the ANR Alumni Association Scholarship Fund, CANR student activities and alumni programming. Highlights include brunch, silent and live auctions, raffles, Sparty, MSU Pep Band and cheerleaders, and children’s games.

Adult brunch tickets are $25 prior to the event and $30 at the door; student brunch tickets (ages 6-21) are $10; while children five and under are free. Tickets for the football game are $49 each.

For more information on AutumnFest, or to register for the event, call 517-3550284 or email anralum@ msu.edu.

7

Partners Fall 2010

2011 ACE Conference Mark your calendar for Agriculture's Conference on the Environment, January 27, 2011.

Farming can seem overwhelming. Juggling costs, resources and production with changing regulations is challenging.

Agriculture's Conference on the Environment can teach you how to balance the environmental management challenges that face your farm with ongoing social pressures.

For details and registration information visit www. maeap.org/ACE.

Greenstone scholarships

$cholarships GreenStone Farm Credit Services proudly awarded $2,000 scholarships to five students from Michigan, who were chosen by the College of Agriculture and Natural Resources at Michigan State University, and one student in Wisconsin, chosen by a committee of GreenStone FCS representatives.

KATI KAUFFMAN daughter of David and Melanie of Clarksville, MI Attending: Michigan State University

SCOTT WEISS son of Joanmarie and Roger of Frankenmuth, MI Attending: Michigan State University

KATIE JO GENTNER daughter of Craig and Mary Kay of Minden City, MI Attending: Michigan State University

Majoring in: Dietetics Interesting fact: I love raising and showing hogs.

Favorite web site: www.youtube.com Things to look forward to in college: “ I get to meet new people and experience new things!”

Majoring in: Agricultural Industries Prefers spending time: Playing music Fantasy dinner guests: George Lucas (Creator of Star Wars), John Williams (Composer of the Star Wars theme song), and Arthur C. Clarke (Author of 2001: A Space Odyssey).

Things to look forward to in college: “ Ag mechanics and engineering are subjects that interest me.”

Majoring in: Crop and Soil Science Prefers spending time: Playing sports Farthest place traveled: Yellowstone National Park, Wyoming Things to look forward to in college: “ To meet new people and experience new opportunities.”

TARA OOMEN, daughter of Ralph and Karen of Hart, MI Attending: Michigan State University

ANTHONY FINKBEINER son of Glen and Pam of Clinton, MI Attending: Michigan State University

KYLE LAPLANT son of Brad and Teresa of Sturgeon Bay, WI Attending: University of Wisconsin– Madison

Majoring in: Agribusiness Management Interesting fact: I love riding my snowmobile and dirt bike!

Fantasy dinner guests: Kobe Bryant (NBA player), Channing Tatum (Actor), and Tom Izzo (MSU Basketball Coach).

Things to look forward to in college: “I get to meet lots of new people!”

Majoring in: Agricultural Industries Interesting fact: I love farming, mechanics, competitive tractor pulling, and old farm equipment.

Favorite web site: www.simpletractors.com Things to look forward to in college: “ I get to follow my five cousins and be a Spartan.”

Majoring in: Agronomy Interesting Fact: I have a third degree black belt in Tae Kwon Doe. Prefers spending time: Hunting Things to look forward to in college: “ I want to broaden my knowledge of the world.”

Fall 2010

Partners

8

DIRECTORS' PERSPECTIVE

Directors’ Perspective:

2 12 Farm Bill

As Congress prepares for the 2012 Farm Bill, hearings are being held, discussions are underway and suggestions have been presented. The National Milk Producers Federation has formulated an option for the next generation of United States dairy policy called Foundation for the Future.

It suggests the discontinuation of both the Dairy Product Price Support Program and the Milk Income Loss Contract, while implementing a new Dairy Producer Margin Protection Program which changes the focus from dairy price to margins.

The proposal also calls for changes to the federal Milk Marketing Order and a version of supply management. As a stakeholder in the dairy industry, share the thoughts weighing on your mind regarding proposed changes and the future of the dairy industry. Is it time for a change in dairy policy?

9

Partners Fall 2010

DIRECTORS' PERSPECTIVE

Brent Wilson

Cathy Webster

Region V Director

Region VI Director

The Foundations For The Future (FFTF) contains several provisions to address concerns about the roller coaster prices received by dairy producers. While no program can eliminate dairy price volatility, the FFTF will try to moderate the extremes in prices that we have recently experienced.

The main provision of the FFTF is a margin insurance program. GreenStone FCS currently sells a similar product called Livestock Gross Margin. It locks in a margin between milk price and feed costs by buying options on the Chicago Board of Trade. The FFTF uses money from the government to lock-in producer margins. A major downside to this program is that there is no floor under the price of milk because the margin insurance money is taken from both the dairy support and the Milk Income Loss Contract programs.

Therefore, we could actually see the market clearing levels at world prices ($7 per hundredweight).

Another provision of the FFTF is a change in the Federal Milk Marketing Order Program. This deals mainly with end product pricing to provide more market flexibility to make products that are needed by consumers rather than products sold to government warehouses.

Additionally, there is the supply management program. This is not a quota system but is a three-month rolling average of individual producers production. The rolling average could be assessed a penalty to pay to dispose of excess milk which gives the producers an immediate market signal that we have too much milk, helping to moderate expansion by individual producers. $11 milk in 2009 hurt everyone in the dairy business. I think it is time to change some of our dairy policies so that we do not have to revisit these low milk prices.

I do support what National Milk Producers Federation (NMPF) is attempting to do. The current system has been in place for over 70 years and does not address the issues facing dairy farmers of today. Something needs to be done to address today and into the future. It appears to me that NMPF is doing just that. My understanding is that the current Dairy Product Price Support Program and the Milk Income Loss Contract would be eliminated and they would be replaced with a Margin Protection Program, a Market Stabilization Program (supply management) and the Federal Orders would be revised.

From my perspective, protection based on margin between income and feed cost would be better than the current price support program. There is also an opportunity to purchase additional coverage. When feed costs skyrocket it can eat up the profits rapidly and you have absolutely no control. This program would treat all dairy farmers equally, whether small or large or anywhere in between. The supply management program is meant to kick in during periods of excess production. Since the base would be on a continuous three-month rolling average, it should be fair.

Raymond Diederich Region VII Director

It is time for a change in dairy policy, without changes we remain stagnate or even move backward.

National Milk Producers Federation has many great proposals.

The DPMPP makes a lot of sense.

It will help put feed and milk prices in balance. However, I feel supply management programs of any form will hurt the dairy industry's ability to grow by limiting production instead of looking for new and innovative markets.

I would like to see all social programs currently in the Farm Bill, such as school meals and food stamps, placed in a different category from agriculture.

Although both are important, they serve entirely different needs. We should also have more self-help programs and less handouts, I believe we know our own needs better than the government.

The bottom line is, no one knows the final outcome of the new Farm Bill because of the negotiations that will be done; additionally, the final amount of money that will be allocated to agriculture must still be determined.

All of the changes are designed to work together to update and enhance the dairy industry. I trust that those who have been working on this proposal (some being dairy farmers) are looking at what is best for now and in the future. It is human nature for all of us to resist change because it has so many unknowns and what ifs. But I’m pretty sure that what was good 70 years ago is not what is needed today.

Who knows what will happen with the NMPF proposal during the process of working on the 2012 Farm Bill.

Fall 2010

Partners

10

New Corporate office

GreenStone Takes Occupancy of its

New Corporate Office

Effective September 13, GreenStone Farm Credit Services officially moved into its new corporate headquarters in East Lansing, Michigan.

Located along the U.S. 127 corridor just north of Lake Lansing Road at 3515 West Road, the new 78,000 square foot building has replaced GreenStone’s former corporate office located on Abbey Road just south of the new facility.

The new West Road facility has allowed the association to consolidate its corporate staff into one location, rather than operating out of two separate buildings as it was previously. With more than double the square footage than the association had been utilizing, the new corporate office also provides the opportunity for the organization to increase staff in accordance with its long-term strategic plan.

According to GreenStone President/ CEO Dave Armstrong, the association is excited about its new home. “This beautiful new building not only represents GreenStone, but it represents the entire agricultural industry; and specifically it speaks to the commitment and success of the more than 19,000 customers/owners 11

Partners Fall 2010

New Corporate office

"This beautiful new building not only represents GreenStone, but it represents the entire agricultural industry; and specifically it speaks to the commitment and success of the more than 19,000 customers/ owners who are part of our cooperative." who are part of our cooperative,” said Armstrong. “Without their loyalty and support, a project such as this would have never been possible.

Opposite page, top to bottom:

Reception stairs leading from the second floor are framed in glass keeping with the open feel of the building's design.

The staff break room provides plenty of seating for lunch and large meetings.

Top to bottom: The building reception area offers a welcoming environment for customers and industry partners. Reception is also conveniently located adjacent to the financial services department.

GreenStone's logo is prominently displayed on stone wall within the lobby entrance.

The GreenStone boardroom is outfitted with a sizable meeting table and the latest communications technology to accommodate board sessions and industry gatherings.

“Everyone, from the staff, to management, to the Board of Directors, is not only very excited, but also feels extremely fortunate for the opportunity to have our operations headquartered in such a wonderful facility. As we begin to settle into our new surroundings, one thing that will not change is the commitment and dedication that all of us at GreenStone have towards serving the financial needs of the agricultural industry and our rural communities.”

The general contractor for the new building project was The WielandDavco Corporation, based in Lansing, Michigan. The architectural design was provided by Landry + Newman Architecture of Birmingham, Michigan.

Fall 2010

Partners

12

Find The LAnd

get the

bucks Whether you’re in search of acreage for play or

profit, GreenStone Farm Credit Services can supply the financing you need. No other lender can match GreenStone’s product selection and superior customer service. Contact a local GreenStone branch to bag your land purchase today.

800-444-3276 greenstonefcs.com

13

Partners Fall 2010

Michigan Livestock expo

Expo Shatters Expectations The second annual Michigan Livestock Expo concluded with the Sale-abration on July 20, raising $155,550, a 55 percent increase from last year’s inaugural event. Of this total, approximately $30,000 will go toward the Michigan Youth Livestock Scholarship Fund, which provides scholarships and educational awards to youth involved in livestock exhibition activities.

GreenStone FCS was a supreme sponsor and participant of the event.

Among the more than 60 single and collective buyers at the auction were GreenStone FCS

and the employees of GreenStone FCS who contributed to the purchase of four auction lots. The employee purchases were made possible through an internal “Jeans on Fridays” employee fundraiser that raised over $5,250.

Top right: Grand Champion Market Goat—Exhibited by Reanna Sloan of Quincy, Michigan; purchased by GreenStone Farm Credit Services and MSU Federal Credit Union.

Bottom right: Reserve Grand Champion Market Hog— Exhibited by Matthew AcMoody of Coldwater, Michigan; purchased by GreenStone Farm Credit Services and The Wieland-Davco Corporation.

Appreciation from the Michigan Livestock Expo “On behalf of all of the exhibitors, parents, board of directors and planning committee of the Michigan Livestock Expo, we would like to say a very heartfelt thank you to you and your company for supporting our event,” said Ernie Birchmeier, manager of the Michigan Livestock Expo. “Michigan Livestock Expo was developed by agriculture for agriculture

in an attempt to enhance our industry and provide an educational and exhibition opportunity for young people and their livestock. Your generous support helped to make this happen.

“Our event involved nearly 750 exhibitors and over 1,000 head of livestock from literally every corner of the state. The

tremendous success of the shows was only equaled by the Michigan Agriculture Sale-abration where we celebrated agriculture and auctioned off our champion and showcase animals. Your support of the sale was tremendous and we cannot say thank you enough. The event that was attended by nearly four hundred people has created quite a buzz about our industry

and what can happen when we all work together. We are fortunate in Michigan to have a vibrant and diversified agriculture industry that works together for the betterment of the entire industry. This cooperative and supportive attitude is unparallel across the country! Thanks again for your contribution and support,” Birchmeier concluded.

Fall 2010

Partners

14

Guest column

Farmers Required to Comply with EPA Regulation Alan Hahn and Matthew Schroeder, P.E. The Dragun Corporation When most people think about regulations administered by the United States Environmental Protection Agency (EPA), they likely picture the typical “smokestack” industry. But in reality, those who are regulated include the dry cleaner down the street, the gasoline service station on the corner, and even the farmer in rural America.

One of the EPA regulations affecting farmers has been in the news a lot recently. Under the Clean Water Act, the storage of specific polluting materials is regulated, and as such, the EPA requires that a plan be developed and implemented for those handing polluting materials that could enter “navigable waterways.” Two recent examples of polluting materials entering water are the British Petroleum (BP) Deepwater Horizon spill and locally, the Embridge pipeline release in Kalamazoo, Michigan. BP was treated particularly harsh by the media

15

Partners Fall 2010

guest column

" What may be surprising to many people is the same basic regulations that are designed to protect waterways from oil companies spilling oils apply to many farmers."

because their response plan was out of date. BP even listed among their experts people who were deceased.

What may be surprising to many people is the same basic regulations that are designed to protect waterways from oil companies spilling oils apply to many farmers.

While the “scale and magnitude” is certainly very different for farmers, the fact is farmers store regulated materials and are therefore required to have a Spill Prevention Control and Countermeasure (SPCC) Plan, which is administered under the Clean Water Act. You may recall the controversy regarding the inclusion of milk as a potentially polluting material. This is based on the fat content of milk, which is considered oil and therefore regulated as a potentially polluting material that if spilled, could adversely affect waterways.

The focus on the milk issue has distracted from the importance of compliance with the SPCC regulations. This is not a new regulation and it is not something specific to agriculture. It dates back to 1973 and affects every industry that stores regulated materials. Here are some important issues to remember regarding the SPCC requirements.

• If you have the capacity to store more than 1,320 gallons but less than 10,000 gallons of regulated

substance (gasoline, oil, diesel, kerosene, etc…), you may be able to self-certify your SPCC Plan (provided certain conditions are met).

• If you have the capacity to store more than 10,000 gallons of oil (or have a single container with capacity greater than 5,000 gallons), you MUST have your plan certified by a Professional Engineer.

• It is important to note that the above capacities are based on potential to store, not what you actually store. If you have two 1,000 gallon tanks but only store 500 gallons in each, you are not exempt because your capacity is 2,000 gallons.

•W hen calculating total capacity, you must include all containers 55 gallons or more (it does not include tractor tanks).

• If you have a plan but it is not implemented (the BP example), you are potentially in violation of the SPCC. • If you were in operation prior to August 16, 2002, you are required to have an SPCC now. Those beginning operations after that date subject to SPCC regulation are required to prepare an SPCC plan

by November 10, 2010.

• The current deadline of November 10, 2010, which is proposed to be extended until November 2011, applies only to the amendments. If you are currently required to have a plan, you can be fined for being out of compliance.

• At the time of this writing, there is not an exemption for milk storage, though it is being evaluated by the EPA and some change in the regulation of milk is anticipated.

This is just a very brief summary of some of the key points to consider as it relates to the SPCC requirements.

The critical issue with respect to the SPCC regulations is what you store and how much. The monetary fines associated with failure to comply can be in the tens-of-thousands of dollars and the public relations “cost” can be even greater; just ask BP. ABOUT THE AUTHORS The Dragun Corporation is an environmental consulting and engineering firm. They assist farmers and others who are regulated with environmental compliance and planning issues, including preparation of SPCC plans.

The opinions stated herein are not necessarily those of GreenStone FCS.

Fall 2010

Partners

16

GreenStone Interns

understanding complex systems and solving problems within them.”

Internship Spotlight GreenStone would like to thank our three student interns for their outstanding contributions this summer. Our organization is appreciative of their hard work and was excited about the opportunity to provide an avenue for learning and career development.

Left to right: Zack Armstrong, James Murphy, Stacey Choate

Zack Armstrong, Credit Department This summer Zack assisted the Risk Asset Department with completing a variety of tasks. He had the opportunity to travel to five of GreenStone’s branch offices to help the RAD officers check in files and complete any tasks that required attention. His work ethic and willingness to be flexible helped him excel in his position. Zack’s supervisor, Ben Mahlich, commented that in addition to being a quick learner and always willing to accept any task, Zack was also a self-starter and showed this by never waiting for work to come to him.

Zack will be entering his junior year at Michigan State University where he is currently majoring in Finance. “This internship experience has influenced my future goals 17

Partners Fall 2010

tremendously. I look forward to continuing my education and further exploring the different arms of the financial industry,” Zack said. He has accepted a part-time position at GreenStone and plans to continue working with the Credit Department.

Jim Murphy, Information Services Department Jim interned with the Application Development Team this summer where he was involved with the Internet re-design project. He learned the core techniques used at GreenStone through creating a demo application. Jim’s hard working attitude and ability to stay focused for a long period of time allowed him to fit in well with GreenStone’s Information Services team. Jim’s supervisor, Steve Junglas, complemented his intelligence and expressed that, “He is capable of

This year Jim plans to finish the Computer Science and Engineering program through the Lyman Briggs College at Michigan State University.

He has also accepted a part-time position at GreenStone and hopes to continue with the company after graduation. Jim has enjoyed working with a real development team and learning how software development works in a production setting. Jim remarked that, “This experience has reaffirmed my desire to work in application development. Working on and writing code to solve problems is something I really enjoy.”

Stacey Choate, Audit Department During Stacey’s time with GreenStone she primarily worked on projects testing various internal controls in the Accounting Department. This included selecting transactions and testing them to ensure the controls established by the department were followed. Stacy’s supervisor, Melissa Stolicker, recognized her strong work ethic and noted that though her internship was in an area that was outside of her major (animal science), Stacy was always willing to take on new challenges and served as a great addition to the team.

Stacey will return to Michigan State University in the fall as a junior and will be keeping busy with her participation in various College of Agriculture and Natural Resources clubs. Her favorite part about her GreenStone experience was learning about other parts of agriculture. “I was born and raised on a dairy farm and I am familiar with production, processing, and promotion, but I have never had much experience or knowledge about the financing aspect of farming,” she said. Stacey plans to pursue a career in production agriculture.

GreenStone Establishes State PAC Election Day this fall is fast approaching, and for all of us it will be a campaign cycle of historic significance. Specifically in Michigan, we are not only guaranteed of having a new Governor, Secretary of State, and Attorney General, but many of the House and Senate seats will also change hands. Wisconsin will also be electing a new Governor.

Due to our federal charter, GreenStone Farm Credit Services has traditionally focused its political involvement in Washington, D.C. However, more and more issues at the state level are beginning to have an impact on our operations, both directly and indirectly – most notably on you, the customers that we serve. Just one example is the current Michigan Business Tax, which unfortunately did not include GreenStone in the language that offered some exemptions to banking institutions. Much work was done over the past 12-18 months at the State Capitol in Lansing to reverse this and add us to the list of institutions receiving those certain tax exemptions.

With this in mind, the GreenStone Board of Directors and Executive Team recently decided to officially create a state-level Political Action Committee (PAC) for the purposes of getting more involved in the local political landscape and to be able to help support those candidates that are favorable towards the agriculture industry.

This fund has recently been finalized and is officially known as the MI GreenStone PAC. The MI GreenStone

PAC is a separate segregated fund that will allow us to collect contributions and then to distribute funds either to state-level campaigns or to the Farm Credit PAC to assist candidates at the federal level.

With the ultra-important fall election upcoming, it is imperative that GreenStone help contribute to those candidates that will ultimately be “friends of agriculture” and hopefully make a difference in our industry for years to come. To make this happen we need a well funded PAC. Our PAC will be used as a tool to help educate our lawmakers about GreenStone and the customers we serve, and it will provide financial support to those candidates that are friends of our industry. The GreenStone Farm Credit Services Legislative Policy Committee—which includes members of the Board of Directors and Executive Management Team—will determine the best use of the dollars collected through our PAC. Our efforts to fund our PAC will be on-going; however, as previously mentioned, time is of the essence for this campaign cycle. Any contribution to the MI GreenStone PAC would be vital towards helping us have a voice in who is elected come November.

If you are interested in making a contribution to our new state PAC, please make your check payable to MI GreenStone PAC, include a separate piece of paper with your full name, address, including county and phone number, and send to MI GreenStone PAC, attn: Jamie Miller, 3515 West Road, East Lansing, MI 48823.

We would greatly appreciate your involvement at any level…and remember to vote on November 2!

Candid Comments...

Everyone at GreenStone, Thank you for your continuous support of MSU NAMA this year. We really appreciate your generous convention trip sponsorship and your willingness to watch and critique our presentation. This year, we placed third out of 31 teams in the student marketing competition and we never could have done it without your help-thank you so much.

-MSU NAMA Dear GreenStone, On behalf of the All-American Junior Show that was held at the MSU Livestock Pavilion on July 2, 3, & 4, we would like to thank you for your donation. The money was used to help make the show an educational and memorable experience for young people in our agricultural society from across the United States.

There were a total of 285 exhibitors and their families from 22 states. There were also 1,366 sheep exhibited. This was the second time for Michigan to host the show and it was a huge success due in part to your thoughtfulness.

Thank you again for your support of the 2010 All-American Junior Show.

Judy Moore Michigan Chairperson All-American Junior Show

Fall 2010

Partners

18

3515 West Road East Lansing, MI 48823

LEss work

maximum returns.

Don’t miss out on what could be yours... let GreenStone ensure you leverage every tax advantage. Contact your local branch today and let the experts handle your tax returns this year!

800-444-3276 • greenstonefcs.com