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Summer 2009

Summer feature story... Reinventing the Family Farm!

Editor’s Note

Editor’s Note

It’s hard to believe that summer is in full swing and that the first half of 2009 is now behind us…amazing how quickly time can pass us by. We hope that you all are finding an opportunity during this busy season to enjoy some of summer’s pleasures…warmer temperatures, longer days, and gatherings with friends and family. We also hope you will take a few moments to enjoy the latest issue of Partners, which features results of our recent Board of Director elections, information on upcoming events, and a guest column that touches on succession planning. Happy reading…and as always, your comments and ideas are welcomed. Published by





Young, Beginning, and Small Farmer Focus As the soybean fields surrounding their family dairy farm turned to subdivisions and the cornfields turned to strip malls, Jackie and Steve Good let their imaginations run as they looked for ways to keep her family’s farm from becoming another housing development.


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CEO Comments Market Outlook Candid Comments Director’s Corner News Update



Starting from Scratch by Dr. David Kohl


What IS Succession Planning, Anyway? by Barbara Dartt, DVM, MS

CEO Comments

CEO Comments by Dave Armstrong


hat a “spring” we experienced…if that’s what you want to call the weather we had during the planting season. Temperatures were below normal while precipitation throughout most of our territory was well above normal. All of this added to the anxiety and angst many producers are feeling about the economy and the overall decline in profitability forecasted throughout 2009 for agriculture as well. That being said, the overall economic environment seems to have stabilized for now with glimmers of light shining through in some areas while others remain mired in financial turmoil and struggle. Headlines in a recent issue of the Wall Street Journal help illustrate this dichotomy with the following: 1. “Private sector shed 532,000 jobs” 2. “Car sales show signs of steadying” 3. “Banks telethon is nearly over – Big banks have raised at least $85 billion in just the past month through selling shares to investors and other fund-raising”

standard of living like that which occurred during the “Great Depression.” Unfortunately, the bold actions taken today to save the “patient” may only create a more aggressive and difficult condition to treat in the future called inflation. Our country, like others around the world, has spent heavily to mitigate the impact of the current financial crisis. The U.S. alone now has the highest federal budget deficit in history of nearly $2 trillion. How will this be repaid? Some level of monetizing this debt will undoubtedly have to be done to get it under control, but this will lead to inflation and could very easily put us back on the fast track to another big boom, ending in an even bigger bust! Time will tell, but each of us needs to do what we can to follow some of the “old rules” our parents taught us and remember to always run for the door the minute someone tells us, “…but it’s different this time.” GreenStone and the rest of the Farm Credit System continue to weather the storm better than many firms and financial institutions. Our access to the credit markets is better than it was in December of last year, but remains tenuous. The price we must pay as a national Farm Credit System for the funding we raise to loan to our members has softened by about a half to one percent since the end of last year. Fortunately, the general decline in interest rates has helped soften the impact of this premium to our members.

As I have said before, these are uncertain times at best. It is easy to become paralyzed in the midst of so much turmoil where many of the “old” rules seem to no longer apply. However, I would argue that many of the “old rules” DO apply and the fact that they have been dismissed over the longest running period of prosperity in our history (1990s – 2006) is the reason we find ourselves in one of the deepest recessions since the 1930s. Things like not spending more than you can afford, being cautious in the use of debt, not investing in things you really don’t understand, saving for a “rainy” day, keeping your investments diversified, and not being too greedy are all things that need to be taught and practiced to help save us and future generations from future “big boom” followed by “big bust” cycles.

Year to Date Financial Results GreenStone continues to be in relatively good financial condition despite its exposure to the ethanol, dairy, swine, and timber industries. At the end of May, the association’s permanent capital ratio was 12.77% vs. a budgeted 12.66%—and 12.85% in May of 2008. The System minimum regulatory capital ratio is 7.0%. Credit quality (loans that have significant credit weaknesses) has slipped from 1.59% adverse in May of 2008 to 4.23% in December, and is now 5.32% at the end of May. In addition, non-accrual loans (loans in which the full collection of principal and interest is in doubt) has increased from .68% a year ago to 2.34% in May. Loan delinquencies greater than 30 days are up slightly over last year from 1.14% to 1.86% now. Outstanding loan volume is up nearly 10% over last year, but down by just over .5% since December 2008. Earnings are also behind plan year to date and compared to the same time last year. Pretax return on assets was 1.4% at the end of May versus a budgeted ROA of 1.71% and 1.83% in May of last year. This is due to provisions for loan losses taken (primarily in the ethanol sector) in the first quarter exceeding budget by $7.3 million. Had these provisions not been necessary, net earnings year-to-date would be $1.44 million better than budgeted.

While the economy appears to have found a bottom for now, we are not out of the woods. Our government, along with other countries, has reacted very aggressively to insure that their citizens have not had to endure a precipitous drop in their

Based on our current view of the horizon, I believe we have appropriately identified the risk in GreenStone’s loan portfolio and are effectively managing it. Financial results thus far in 2009 are not what we would like to see, but could be much worse given

4. “Refinancing boom aids lenders – The refinancing boom has been good to mortgage lenders. Banks' profits on mortgage originations jumped in the first quarter” 5. “Court to hear challenge to Chrysler, Fiat pact” And, of course, we all know that General Motors just recently filed bankruptcy.

continued on page 5...

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Market Outlook


be on the horizon. You should expect corn price to fade with improving conditions with the chance of one more spike to the $5.00 range on speculator interest. If July corn futures cannot take out $4.50 on the next move higher, then the seasonal high will have been formed. Profit taking in the soybean market has been the main feature recently. Funds have been heavy sellers but continue to hold large long positions. Cash basis levels are falling as well. The trade is firmly fixed on the very tight U.S. soybean supply and that has obscured the fact that U.S. soybean acres are up and large production is expected. That will not alter the fact that we need every bushel for the remainder of 2009/2010. Regardless of where price is today, demand is still good and until we see firm evidence of demand rationing, price will remain strong. This market will not die; traders will look for breaks to add to length. The July 2008 high of $16.45 is a target for traders. Wheat futures recently ended on a low note, along with the other grains, with the lack of any fresh news. Funds have been sellers. There seems to be support at the 50-day moving average of $5.75. Look for funds to buy support and sell rallies. World demand is low as most countries are using their own supply. Look for some short-term support, but all-in-all the highs in the wheat market should be behind us.



n Friday June 12, corn ended the session on a very weak note, trading in a 22 cent range to as low as $4.20. Since the December lows were placed, all these breaks have been met with Fund buying and many analysts believe this break is no different and they expect to see continued buying interest with a topside projection of over $5.00. If you are going to believe these predictions, you have to understand who the buyer is. It is not the livestock feeder or the ethanol producer who continues to struggle with non-existent or negative margins…it is the speculator who continues to look for bargains in a market that offers many. The U.S. crop is entering its important growth phase. I would expect crop rating to improve as no harmful weather seems to


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The U.S. Census Bureau reported pork exports for the month ending April came in at a 6% decline from March. Despite the decline, the number was ahead of most observers’ expectations. A number of issues face pork producers; a slowdown in world economic activity, the mislabeling of the H1N1 virus, and the subsequent response of foreign end users in closing import markets of U.S. pork. A silver lining is April’s Mexico pork imports jumping 55% to 103,000 metric tons. On the other hand, May exports to Mexico are expected to be down. Pork prices fell sharply during May; we likely need another quarter or two to see if pork exports will improve. The Beef trade was not jolted by the H1N1 event. April exports exceeded both prior month and year numbers. Seasonal demand increase is expected in the coming weeks with declining supplies…any rise in U.S. beef exports will support price.

Ken Lake is the Originations Services Coordinator for Michigan Agricultural Commodities, Inc., working out of its Global Ethanol office in Riga, Michigan. He can be reached at 517-486-6190 ext. 107, or at The opinions stated herein are not necessarily those of GreenStone FCS.

Farm Management

Starting from Scratch By Dr. David Kohl


have heard many people say that it is virtually impossible to start farming or ranching from “scratch” because of the capital intensity, complexity of the agriculture industry, and global competition. The following story was provided by a lender after I asked for “success stories” during a series of webcasts I conducted with producers in a Farm Business Management Education Program. It all began with a 15-year-old boy whose family was not involved in farming, but he lived on a rural building site. He did chores and worked in the summer for farmers in the area. Most all of his earnings went to buy day-old heifer calves and the feed they needed. By the time he was a junior in high school, he was milking 17 cows in a rented barn with no pipeline or barn cleaner. The summer he graduated from high school, he had the opportunity to rent a 40-cow dairy with 160 acres of land. He moved his cattle and small line of equipment he had purchased to the farm and exchanged labor for the field work that needed to be done. The two years he milked in the first barn, he continued to buy heifer calves and raise them so he had nearly enough cows and springers to fill the newly rented barn. He milked in this facility for several years and continued to grow the dairy herd, with a group of "outside cows" that were moved through the tie stall barn for milking. The farm was put on the market at a price that would not cash flow for the young producer, so he looked for another alternative and found a larger farm with an empty barn that could be rented on a crop/livestock share agreement. After a couple of years he was milking 80 cows, had a nice set of farm equipment, and 80 acres of land with very little debt. The farm he was crop/livestock share farming on came up for sale. He purchased it and began plans to build a 300-cow freestall barn and parlor. After numerous declines from lenders, he obtained financing and built the facility on time and on budget. Within a few months the freestall barn

was full of cows in milk and the unit continuously "beat" their projections. The unit is now milking 500 cows, has a strong financial position, and a very competitive cost of production. The unit is experiencing a "problem" now as their milk production has stalled out at 93# and they can't seem to get to 95. Several lessons can be learned from this story. This young farmer was successful because he invested in productive assets, in this case, cows. He utilized other producers’ fixed assets (buildings and machinery) in exchange for labor, keeping his overhead costs down. He knew enough not to get into debt “over his head” with the first purchased farm, which demonstrates objectivity over ego. He built his first barn on time and on budget, and beat his projections. Even though he was turned down for credit, he never gave up. His challenges in the future could be possible burnout and balancing business and personal life. Yes, you can get started from “scratch” and beat the odds. However, it takes some “outside the box” thinking and working with others to utilize resources. Take it a step at a time. It will be interesting to hear if this producer will do the same for another aspiring young producer in the future. Comments? Please send your remarks to I would like to know what you are thinking. –David Kohl

Dr. David M. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University (Virginia Tech), Blacksburg, Virginia. He has conducted more than 3,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FmHA, and regulators, as well as producer and agribusiness groups. He has published four books and over 400 articles on financial and business-related topics in journals, extension, and other popular publications. The opinions stated herein are not necessarily those of GreenStone FCS.

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...CEO Comments continued from page 2 the current state of the economy at large. GreenStone, like the rest of the Farm Credit System, is weathering this economic storm well and continues to serve its mission each and every day by delivering a dependable, competitive, and constructive source of credit and financial services to rural America. Industry and Economic Outlook Agriculture continues to experience stress from prices that are below the cost of production. The ethanol meltdown earlier this year appears to have stabilized even though many plants have either idled operations, went out of business, or are still operating at a small loss per gallon. GreenStone, as part of other lender groups in various ethanol plants, has acquired an ownership interest in three plants with one sale pending at or above previously estimated values. At least for now, we believe the worst is behind us in this segment of the portfolio. Unfortunately, the “protein sector,” particularly dairy and swine, also continues to struggle.

unprecedented infusion of liquidity into the markets. Rates should stay relatively low as long as the general economy languishes in recession for the foreseeable future. Yet, once this massive injection of liquidity starts chasing a limited supply of goods, as a result of recessionary contraction, the market will turn its fear of recession into that of inflation with a commensurate rise in rates. Many believe now is a great time to lock in longer term interest rates ahead of what could be a rapidly rising rate environment at some point in the future. No one can ever precisely predict market cycles which is why it is imperative for all business owners (especially farmers!) to always remember the importance of equity in their businesses and be realistic about their operation’s ability to generate earnings in good times and bad.

Economists and others continue to predict a return to $16-17/cwt milk by this fall. In general, most of our dairy customers have enough equity which will allow them to stay in business until prices recover. Yet, there are many who are struggling during this difficult time and will have to make some difficult decisions about the future viability of their businesses. Swine producers are in a similar situation as the dairy industry. While prices seemed to be recovering earlier this year, the outbreak of H1N1 flu seriously set prices back to a level where many producers are losing $15-25 for every hog they sell. While there continues to be a light at the end of tunnel for dairy prices this fall, some experts believe the swine industry won’t see profitable prices until well into next year.

Board Update GreenStone is very fortunate to have such a fine group of individuals who are willing to share their precious time in leading your association. In good times, they rarely get credit for the things most of the membership takes for granted i.e., a dependable source of funds and competitive interest rates, but often catch the brunt of criticism when things don’t go so well. I want to take this opportunity to thank all of our directors for their service and congratulate those who were reelected to the board this spring. I also want to acknowledge and thank all those members who ran not only for board positions, but Nominating Committee seats as well. The foundation of our cooperative System is based on grass roots governance which cannot exist without competent and committed people who are willing to run for positions to insure that the association has a deep talent pool from which members select their future leaders.

Interest rates are now at historically low levels, due to the government’s

The board is also currently in the process of selecting a new “Outside


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Director.” Bill Oemichen, president and CEO of the Cooperative Network in Wisconsin and Minnesota, resigned his position at the April board meeting. Bill has been an excellent board member serving on the board of Farm Credit Services of Northeast Wisconsin beginning in 2002 and on the GreenStone Board since 2003 when FCS of Northeast Wisconsin merged with GreenStone. Bill most recently served as the board’s “financial expert” and Chair of the Audit Committee where he demonstrated a very balanced, thoughtful, and detailed approach to insuring the association was in compliance with all required policies, procedures, regulations, and laws. His passion for the cooperative business structure, agriculture, and University of Wisconsin Badgers will be sadly missed. Please join me in thanking Bill for his years of service to GreenStone! I look forward to continuing to work with Bill in his role at the Cooperative Network of which GreenStone is a member. Details regarding recent election results can be found on page 18. New Corporate Office Building As I communicated to you in the spring issue of Partners, your Board voted at its March 2009 board meeting to move forward with plans to build a new corporate office facility near its current office building in East Lansing. I am pleased to announce that the GreenStone board, at a special June board meeting, unanimously selected The Wieland-Davco Corporation as the successful bidder to begin construction of GreenStone’s new corporate office facility. Wieland-Davco is a well-respected firm headquartered in Lansing with over 50 years in the construction business. The Wieland-Davco team demonstrated a great deal of preparation, enthusiasm, and detail in their bid for our project. The board was also very pleased with the fact that 60

Candid Comments

percent of Wieland’s subcontractors will be from the mid-Michigan area, further helping to stimulate the local economy. The new building will consist of approximately 77,000 square feet on 15 acres situated approximately one quarter of a mile immediately north of our current location just off West Road along northbound U.S. 127. Construction is scheduled to begin as soon as possible in order to have the steel structure enclosed by November with completion planned for September/October of 2010. While the board and management understand the economic uncertainty that surrounds us today, we still believe this is an excellent time to move forward with the association’s future space needs. Interest rates continue to be at historical lows, plus the cost to build the structure and excavate the site came in nearly 40 percent below the original forecasts due to the availability of contractors and a decline in the price of raw materials such as steel and concrete. We hope that the decision to build is viewed as a positive one by you, our members. The fact that GreenStone is in a financial position to maximize the opportunities this economy presents speaks volumes about its financial position and long-term commitment to Michigan and Wisconsin agriculture. I want to close my comments by wishing all of you the best and thanking you for your business. We are strong because of members like you, a committed group of talented board members, and one of the best Farm Credit staff teams in the country. Enjoy your summer!

CANDID COMMENTS: At GreenStone, we value our partnership with you and recognize the importance of your input. By providing feedback, you help us to better deliver the products and services you need in the manner you deserve. If you have comments you’d like to share, please email them to or mail to 1760 Abbey Road, East Lansing, MI 48823, ATTN: Candid Comments. We look forward to hearing from you! A selection of recent comments received are included below.

I have been a client of Gre enStone for over nine yea rs now. I have been blessed to have been worki ng with Kim Cool over the years; she is the BEST at customer support regard ing my land loan that I hav e with your company. I just wanted to let you kno w that it was because of the magazine that I receive from Kim that I wa s jolted out of my compla cence regarding my loan rate and possible refinanci ng in regard to an article in it. I called Kim and she was able to lower both my rate and decrease the loa n schedule at the same time. It was an outstanding experience and I just wante d you to know that it would not have happened except for my reading of the article. I wanted to give you som e positive feedback regard ing Kim, the magazine and the superb customer support from your compan y. I will always highly recommend GreenStone Far m Credit Services to anyon e that could use your company's services now and in the future. Best Regards, Brad Gallup, Cadillac Branch Customer

past year’s shared at this u yo d to such n io at e been invite e inform th av l h al to r d fo re o ch n hat their el ho Thanks so mu ire to know w nn Arbor. I fe es A d s in e’ g n n o ti St ee en Gre el welcome stockholder m pressed with er. I always fe im sp ry ro p ve s u am p I el nh wonderful a nice event. GreenStone ca an. All the employees are w o h d an k ey really in Adri members thin interests…th t my branch y si m vi I d an en h ily w Karen, fam and wanted my name, my oing in to see g w y o jo kn en ey ly th al , me job. t. I re to work with do an aweso n and a clien so ey er th p a e… er as e th care about m the employees rence at arret and all G y, d in C , er make the diffe g le Ro p eo p " at said th ht when you You were rig great work! e th eep up K . e" n o St en Gre y David A. Halse stomer Cu Adrian Branch

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Guest Column

My Place

Mom and Dad’s

What IS Succession Planning, Anyway? Barbara Dartt, DVM, MS Senior Business Consultant, Lookout Ridge Consulting


ttending the “Succession Planning” talk at a conference could mean hearing a speech about which kind of legal entity is right for your business. Or, it could lead to hearing Jolene Brown or Ron Hanson tell some highly entertaining stories about dysfunctional farm families. The session could be a full day on tax planning or an hour on inter-generational relationships. The Succession Planning speaker could be a lawyer, financial planner, accountant, tax preparer, counselor, fellow farmer or even a consultant. The easiest definition of Succession Planning might simply be—complicated! Succession is complicated. And its intricate, thorny nature is partly to blame for Farm Journal’s findings last winter. While 79% of their 369 respondents planned to transfer control of their business to the next generation, only 20% were fully confident of their succession plan. Interestingly, in the dictionary, the definition of succession implies an orderly, linear process. In the corporate world, succession gets a fair bit of attention. Mainly, corporate succession focuses on a process to recruit and develop employees to fill each key role within a company. Sounds orderly enough—at


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least within that narrow focus of management and operations. But complexity comes when the dimensions of ownership and family join operational succession. In a publicly owned company, what is a straightforward, linear process suddenly becomes three dimensional in a familyowned business. It is no wonder that sharp, successful operators scratch their heads when it comes to succession.

So, let’s review. Succession: • By definition, means an orderly approach; • In family-owned businesses is multidimensional and therefore, complicated; and • In family-owned businesses includes the dimensions of: – Ownership, – Management or Operations, and – Family.

In a family-owned business, the multidimensional nature of succession is like a tangled ball of string. The strings include family relationships, management and leadership readiness, financial health of the business, ownership structure and others. To unravel the ball, you must pick up a string and follow it. But tugging on one string merely tightens the knot on the other side of the ball. Where should you start?

Succession planning, then, is an orderly approach to the transition of ownership, management and a family’s heritage from one generation to the next. Succession planning certainly includes estate planning, but also addresses the people side. And it is this people side— including family managers and family not involved in the business—that often keeps sharp managers from getting a comprehensive succession plan in place.

The complexity of succession often leads business owners to grab the most straightforward issue (string) there is— the ownership transaction. Estate planning, or this ownership transaction, includes things like development of wills and trusts. Essentially, estate planning provides for the ownership transfer of assets and real estate and, hopefully, minimizes taxes for the next generation. During estate planning, progress is measurable. And, when done with a capable advisor, estate planning can address family business dimensions other than the ownership structure.

So, how do you begin to address the sticky people issues that are at the heart of successful succession planning? Ask yourself the questions in the box at the right. If you can answer yes to eight of the 10, you are well positioned to work on unraveling the “ball of string” that is your family-owned business. If you answered yes to seven or less of the questions, consider finding a trusted advisor that can provide a non-family perspective and a proven process for developing the management and family, as well as the ownership, dimensions of your succession plan.

However, in many family-owned businesses, estate planning simply does not provide enough tools to address the complexities of the family and management/operations dimensions.

Is Your Team Ready for the People Side of Business Succession? Answer the questions below. Eight or more yes = your team is well positioned to develop a comprehensive succession plan. Seven or less yes = consider finding a trusted advisor with a proven process to assist you in plan development. 1. Family members understand their role(s) within the business. 2. Past conflicts are not hindering present day business activity. 3. Conflicts are resolved directly by the people that have the conflict. 4. All members clearly understand the way decisions are made. 5. All family members working in the business would be successful working in another business. 6. Tough decisions are made and implemented in a timely manner. 7. A clear picture of the future is agreed to and understood by all. 8. The successor generation has at least as much passion for the business as the senior generation. 9. All understand the level of financial performance it takes to have a successful business. 10. A clear distinction exists between business financial matters and personal financial matters.

Barbara Dartt joined Lookout Ridge Consulting in September 2001, bringing experience in both financial and production management. Today, Barb assists business owners with financial analysis, business succession, operational and long-term planning as well as other opportunities and challenges unique to family-owned businesses. For more information on Lookout Ridge Consulting, please visit The opinions stated herein are not necessarily those of GreenStone FCS.

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Director’s Corner

Meet Ed R eed

It hasn’t always been pig rearing and tractor driving for Ed Reed. Ed began his career in engineering after graduating from Western Michigan University with an Electrical Engineering degree. He spent his first seven years after graduation working for a consultant designing waste fuel co-generation facilities and then at a paper company designing control systems and managing construction projects. When Ed’s chosen career started burning his candle from both ends, he made a sweeping decision to change courses. In 1993, he joined the industry he had worked for during college and built a 1,400 head sow farm in Marcellus, Michigan. The farm now includes 2,000 acres and 2,800 sows, farrow to finish. “Though the road has been rough, it has turned out to be one of the best decisions of my life—what a wonderful way to raise a family,” Ed said.


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Region IV Director

But that’s not all Ed took hold of in Marcellus. He is now a 10-year veteran football and basketball coach, started a rocket football program four years ago for first through sixth graders, and, in 2003, built a full-size indoor basketball court at his house where the local junior pro (third through sixth graders) and varsity basketball teams often practice. The varsity football team also feels at home in the court, using its furnished apartment for pre-game dinners provided by Kelly (Ed’s wife) and to watch game films of upcoming opponents. Ed takes pride in the fact that he has been able to coach his sons, Christopher, Eric and Adam who are 18, 15 and 11 years old respectively. “Being a father of three boys has presented me with many opportunities to help coach them, and their friends, into young, confident adults. Their success is my success. My passion, for sure, is coaching youth.”

Though Ed has been a GreenStone member for many years–GreenStone loaned him the money to get started–he is new to the Board of Directors, elected in 2008. “Being on the Board of Directors is one way I hope to help the institution that got me started.” He also serves on the legislative committee for the GreenStone Board of Directors, is the Vice President of the Michigan Pork Producers Board of Directors and is a pork board delegate. As a relatively new board member, what do you feel you bring to the board? Although my background may not be the normal path most farmers take, my time as an engineer gave me the business and people skills which, I feel, has also helped make me successful as a farmer. My background and “newness” on the board makes for a positive dynamic. The board has members who remember, and managed their business through, the credit crisis of the 80s; and it has younger members, like myself, who bring a fresh viewpoint. This helps to give a broad base perspective to navigate GreenStone through the current economic times. What is one main goal or issue you would like to address as a director? Tying into my passion for youth development, I’d like to help with efforts to increase the number of young, beginning, small and minority farmers—possibly through a mentorship program. By providing an opportunity for young people to gain knowledge and interest in agriculture, we can help to ensure a positive future for our industry. This could also

“Tying into my passion for youth development, I’d like to help with efforts to increase the number of young, beginning, small and minority farmers.” provide experience for them to get started in contract production, thereby building equity without undertaking too much risk. I feel it is part of GreenStone’s responsibility to keep the ball rolling!

GreenStone customers encompass a uniquely diverse industry of products and services. In general, what do you see as the key to their success in the future? The key—a good risk management program! The business of farming has never been more volatile. Our customers must know their cost of production and manage margin. On the Reed farm, hogs are forward contracted with futures and option

“The business of farming has never been more volatile. Our customers must know their cost of production and manage margin.” strategies. Though I know I won’t be right 100 percent of the time, I believe you must lock in a profit when possible and manage margin. What do you view as GreenStone’s strategy to accomplish its mission and ensure the vision of the organization is achieved? GreenStone must retain talented staff and maintain the ability to access capital at competitive rates. Through the recent credit crisis, AgriBank (GreenStone’s wholesale lender) has been able to tell agriculture’s story and continue to sell bonds, thereby allowing us to provide farmers, suppliers and processors with operating capital when few other lenders wanted the credit. This is exactly what I told legislators, on behalf of GreenStone, during my recent trip to Washington, D.C. GreenStone’s staff, along with the board, also believe in the cooperative structure and will continue to strive to be the lowest cost, highest service provider to its member owners. What has been the most significant advancement you have seen in your lifetime in regards to agriculture? The engineer in me loves the precision farming technology, GPS guided auto-steer, variable rate technology and yield mapping. But I feel the greatest advancement has been bioengineering. Genetic engineering—the ability to stack genetic traits for insects, drought and weed control—are things only a few years ago you would have seen on Star Trek®. We have seen similar advancements in the swine industry with genetic markers and improved vaccines. I don’t know where we’d be without these advancements, and I can only imagine what will come in the next five or 10 years.

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Young, Beginning, and Small Farmer Focus


Sustainable Reinventing Employer the Family

Farm By Laura Moser

As the soybean fields surrounding their family dairy farm turned to subdivisions and the cornfields turned to strip malls, Jackie and Steve Good let their imaginations run as they looked for ways to keep her family’s farm from becoming another housing development. “We raised our family here milking only 60 cows,” says Jackie’s dad, Ronald Campau. “You just can’t raise a family like that now.” With his children grown and the barns idled, Ron looked to sell the property. However, Jackie and Steve were not so willing to let the multi-generation family homestead go. “When we heard the farm was being rezoned for development, we began thinking of ways to keep it in the family,” Jackie says. Located just 30 miles from the center of Detroit, the Good’s knew that expanding a dairy farm was not a viable option, but

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an organic-based small farm may be a good fit. So in 2000 they began transitioning the dairy farm into a fruit and vegetable farm—RC Organic Farms. They are now the only certifiedorganic farm in Macomb County. The Good’s conversion to small-scale organic farming was in step with the consumers’ desire to buy locally-grown food. In the first years of their business, the Goods sold produce at local farmers’ markets and offered a few community shares of their garden. Today, all of the harvest from their five-acre garden is sold as shares—anywhere from 50 to 60 a year. “We were afraid that with the economy this year our numbers would be down, but we have had more interest than we can handle,” Jackie says. “People just like to have a connection to their food. They love coming here each week to get their box of produce. They tell us it is like Christmas when they get their box and look inside to see what we have for them.”

The Goods raise over 50 different fruits, vegetables and herbs in their community garden located in Lenox Township. Jackie begins the growing season in early March in a small greenhouse with starter plants. By April they begin planting

“Converting the conventional farm to an organic-based operation required changing more than equipment—it required a change in management and mindset.” the cool-season crops and the work continues through the fall harvest. They estimate that one acre can feed 10 families. In addition to raising all the produce, Jackie also runs the retail side of the business. Over the past few years they have worked to turn a garage into a sorting and distribution area. A walk-in cooler was added to keep the produce fresher longer. A small storage shed serves as a year-round retail shop where fresh eggs and other organic items are sold. Their next step will be a U-pick berry patch that should be in production next summer. The one-acre plot will hold over a thousand strawberry plants, several currant berry bushes as well as raspberry plants. Adding mechanization As the community garden expands, the Goods bring in more pieces of equipment to help eliminate some of the manual labor. The purchase of an Eco Weeder reduces the need for hand weeding. They also use equipment to prepare the beds for planting. In total they use around a dozen pieces of equipment to run the farm. Weed and pest control is handled in a natural way using companion plants to attract beneficial insects. They also soil test on a routine basis and rotate varieties to balance the soil nutrients. “We strategically plant aromatic plants that bring in insects that will eliminate the pests,” Jackie says. Jackie, who is trained as an agronomist, has a strong background in conventional cropping practices but has learned a lot about organic farming since starting the community garden. “We only had one class on organic practices when I was at MSU,” Jackie says. “I have learned a lot from attending conferences and talking to other growers.” The Goods work closely with Dave Messing, senior financial

Jackie grows all the starter plants for the garden in a small greenhouse. services officer at the Sandusky GreenStone Farm Credit Services Branch, to finance the farm and needed upgrades. “GreenStone has been great to work with,” Steve says. “They have an understanding of what we are doing here and the office staff is very professional and provides accurate information.” From Low Cost to High Quality Converting the conventional farm to an organic-based operation required changing more than equipment—it

“We were afraid that with the economy this year our numbers would be down, but we have had more interest than we can handle” required a change in management and mindset. “We are no longer looking at the least-cost formula based on quantity,” Steve says. “We are looking at the high-quality inputs to generate high-quality products and we have found people are willing to pay for that.” Steve, who also comes from a dairy farm family, works full time as an animal nutritionist for Vita Plus Corp. His training

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in animal science has helped them incorporate chickens and turkeys into the farm. They raise several hundred chickens

“GreenStone has been great to work with. They have an understanding of what we are doing here and the office staff is very professional and provides accurate information.” and 200 turkeys each year. The birds are fed a special blend of organic feed that Steve formulates. Educating Others This past winter Jackie was invited to participate in an educators’ tour (EOV) in San Diego, California that was sponsored by the U.S. Navy. During the tour, she met with Navy officials to talk about how the Navy could implement

a Community Supported Agriculture (CSA) based idea into their programs to encourage healthy eating. “We were told that 70 percent of high school graduates don’t meet the basic physical and health requirements for military recruitment,” Jackie says. “They are looking at ways to fit in something like a CSA on the military bases to provide them with fresh produce. They asked me to help explain the model we use on our farm.” Bringing in the Next Generation The Good’s four children: Jeremy, 17; Holly, 14; Brad, 12; and Riley, 10, all help out on the farm. They also raise 50 laying hens and sell the eggs at the farm. In addition to teaching the kids a good work ethic, the Goods are also teaching their kids the pride that comes from producing good food. “When we sit down to a dinner of chicken, potatoes and vegetables it is a wonderful feeling to know we raised the food ourselves. The kids understand the work that goes into providing food for us and our neighbors,” Jackie says.


Rural Financing provided by GreenStone. Would you like to measure your property line in acres rather than feet? Does your ideal home include a pole barn and a bonfire pit out back? Most lenders don’t understand. GreenStone not only gets it, we support it. Our unique financing fits all shapes and sizes. Call your local branch to explore the possibilities.

800-444-3276 •

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USDA Rural Development Offers Funding for REAP More than $60 million in funding is available nationwide this year through USDA Rural Development as part of the Rural Energy for America Program (REAP). The funding is to support investments in renewable energy systems, to make energy efficient improvements, and to conduct feasibility studies for renewable energy systems for agricultural producers and rural small businesses. REAP was established under Section 9007 of the 2008 Farm Bill to expand and rename the program formerly called the Renewable Energy Systems and Energy Efficiency Improvements Program, which encouraged agricultural producers and small rural businesses to create or install renewable energy systems and/or energy efficiency improvements. Eligible projects in the 11 technology areas include anaerobic digesters, biomass, geothermal (including electric generation and direct use), hydrogen, solar (small and large), wind (small and large), and energy efficiency improvements. This year’s program includes the technology of small hydropower projects (30 megawatts or less), which are now eligible for REAP funding. Grants can cover up to 25% of total eligible costs. The minimum energy efficiency grant is $1,500 and maximum is $250,000. The minimum renewable energy grant is $2,500 and maximum is $500,000. For feasibility study grants, the maximum award is $50,000 or 25% of eligible study costs, whichever is less. Applications for grants must be completed and received at the USDA Rural Development State Office or Area Offices, no later than July 31, 2009. Neither complete nor incomplete applications received after this date will be considered. Further information on rural programs is available at a local USDA Rural Development office or by visiting USDA Rural Development’s web site at

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News Update

News Update Join GreenStone on Facebook! GreenStone recognizes that our customers encompass a wide range of demographics and strives to use a variety of medias to most effectively communicate with, and provide information to, our members. Therefore, GreenStone recently launched a Facebook page as another method to accomplish this objective.

and include reserved grandstand seating, free pre-race pit pass, access to FFA hospitality tent, continental breakfast and lunch, opportunity to meet NASCAR personalities, and the chance to win one of many prizes. Reserve your tickets before August 10, 2009 by calling 517592-6666 and mention you are with the FFA to receive this special package, or visit for more information.

Partners Receives Regional Recognition Facebook is an online social networking site that allows businesses and individuals alike the opportunity to share information and interact with other users. GreenStone plans to utilize the site to share details on current events and breaking news in addition to providing informative updates. To find us on Facebook, go to our Web site and click on the Facebook logo found in the lower right-hand column of the home page. Facebook users—be sure to select “Become a Fan” from the GreenStone Facebook page in order to receive information and updates as they become available.

FFA Race Day at the Michigan International Speedway The Michigan FFA invites you to join them at a fun-filled hospitality day during the NASCAR Nationwide Series race on Saturday, August 15, 2009. Special ticket packages are available for $75

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That’s right, GreenStone Farm Credit Services recently received a National Agri-Marketing Association (NAMA) Best of NAMA Merit Award at the regional awards ceremony in Chicago, Illinois. The award was presented for its member magazine, Partners. The Best of NAMA competition honors the best in agricultural marketing communications. Over 1,200 entries were received nationwide to compete in the six regions. NAMA is an organization comprised of members from across the nation representing agriculture’s marketing, advertising, public relations and media sectors.

Shopping for Equipment at Ag Expo? Ag Expo, Michigan’s largest agricultural equipment exposition, will return to the

Michigan State University (MSU) campus July 2123, 2009. If you’re in the market for a new tractor, hay baler, or some other type of farm machinery or equipment make sure you stop and see us at our exhibit booth #120 on First Street for financing. You can take advantage of our show special finance rates to save money on fixed rate equipment loans with no loan origination fees. On the Spot financing approvals will be available at our booth during the show. Payment terms from one to seven years are available and items priced as low as $8,000 can be financed. We also finance pole and hoop buildings and other agricultural assets, plus leases are available as well.

Examples of items that GreenStone FCS can finance at the show are: • Utility Vehicles • Wood Furnaces

Area Producers Receive $422 Million in Crop Insurance Indemnity Payments for ’08 Many producers realized the value of their crop insurance policy in the 2008 crop year. A combination of production shortfalls and a drop in commodity prices resulted in over $422 million paid in crop insurance indemnity payments in Michigan and Wisconsin. Wisconsin, being the largest with 4.4 million acres insured, received $256 million. Wisconsin producers paid $102 million in premium after subsidies for a payout of $2.50 for each dollar in premium. Michigan producers, with 3.7 million acres insured, received $166 million in payments with $70.5 million in paid premium for a payout of $2.35 for each dollar in paid premium.

• Zero-turn Mowers • Skid-Steer Loaders • Compact Tractors • Mini-Trucks • Tillage Equipment • Grain Bins/Dryers/Augers

“A combination of production shortfalls and a drop in commodity prices resulted in over $422 million paid in crop insurance indemnity payments in Michigan and Wisconsin.”

• Sprayers • Portable Sawmills • Haying Equipment • Cattle Chutes Also, it’s back again this year by popular demand…another $500 Cabela’s Gift Card will be up for grabs in the GreenStone exhibit. Be sure to stop by and register for a chance to win this great prize, plus if you’re feeling like Tiger Woods you can “Putt for Prizes” at the GreenStone putting game at our tent.

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GreenStone agency policyholders received over $45 million in claims in Michigan, and just over $5 million in the counties served by the association in northeast Wisconsin. In addition, there was approximately $1.3 million paid in hail insurance claims in 2008 to GreenStone agency customers.


BE SAFE THANSORRY Crop Hail Protection provided by GreenStone.

Crop hail protection from GreenStone Farm Credit Services is designed to cover a variety of crops including fruits and vegetables. Plus, you can select the coverage per acre that’s right for your operation and your claims are paid at the time of damage. Hail policies also protect your crops from: • Fire • Vandalism • Loss during transit Call your local GreenStone Crop Insurance Specialist for more information.

800-444-3276 • GreenStone FCS is an equal opportunity provider and employer.

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All of these insurance policies are reinsured. GreenStone is not the insurance company. The claims in excess of the premium do not affect GreenStone’s financial position. GreenStone is an agency with staff licensed as agents who specialize in crop insurance. Commissions received from the insurance companies for insurance sales are income to GreenStone independent of losses.

The Country Minute– Available Online GreenStone recently developed a new publication focused on its rural residential customers, entitled The Country Minute. It is now available online by visiting the GreenStone Web site and clicking

on The Country Minute image found in the left-hand column of the home page. This publication, like Partners, is published on a quarterly basis, so be sure to check it out—we strive to provide timely information and resources that you too might find useful!

GreenStone Customer Appreciation Events! Many GreenStone branches are gearing up for a variety of customer appreciation events this summer and invites will be hitting the mail throughout the season. As an added bonus this year, customers will have the option to RSVP online through the new GreenStone event registration web page. Look for your invite in the mail or ask your branch representative for more information. The following is a list of just a few scheduled upcoming branch events. BRANCH




Wisconsin and Upper Peninsula 7-24 Charlotte


St. Johns






GreenStone FCS Announces Board of Director Election Results GreenStone Farm Credit Services is pleased to announce the election results for six seats on its Board of Directors along with the Nominating Committee. In Region V (Michigan), incumbents Frank Engler, from Isabella County, and Brent Wilson, of Gratiot County, were re-elected for three-year terms. Engler, a 15-year board member, raises corn, soybeans, wheat and alfalfa in addition to Holstein heifers and beef cattle. Wilson, a board member since 1992, cash-crop farms 3,000 acres of corn, alfalfa, soybeans, sugar beets, green beans and wheat, and milks 415 dairy cows.

In Region VI (Michigan), incumbents Brian Haskin, from Eaton County, and Catherine Webster, of Clinton County, were re-elected to three-year terms. Haskin, a three-year board member, operates a cash grain farm, and manages a drainage contract business and a grain elevator. Webster is a 17-year board member who has been a dairy and crop farmer for 42 years, raising mostly corn and alfalfa. In Region VII (Wisconsin), incumbents Raymond Diederich, of Brown County, and David Rakowski, from Oconto County, were re-elected to threeyear terms. Diederich has been a board member for several years, serving on the FCS of Northeast Wisconsin board before the merger with GreenStone; he is a dairy farmer, milking 120 cows, raising 120 head of young stock, and farming corn, soybeans and alfalfa on 420 acres. Rakowski, a 25-year board member who also spent a portion of that time on the FCS of Northeast Wisconsin board, farms with his son and raises approximately 600 Holstein steers in addition to farming 1,000 acres of corn, alfalfa, wheat, oats and green beans. The 2009 Nominating Committee includes from Region I: Daniel Fisk, Arenac County; Derek LeCronier, Bay County; and Joel Wardin, Saginaw County; from Region II: Scott Shaw, Sanilac County; Steven Tait, Huron County; and David Thuemmel, Huron County; from Region III: Stanley Ferris, Hillsdale County; and Bruce Lewis, Hillsdale County; from Region IV: Brian Totzke, Berrien County; and Jan Vosburg, Kalamazoo County; from Region V: John Crumbaugh, Gratiot County; and Michael Rasmussen, Montcalm County; from Region VI: Patrick Feldpausch, Clinton County; and Anthony Jandernoa, Clinton County; and from Region VII: Mary Eggert, Outagamie County; and David Goers, Shawano County.

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

1760 Abbey Road East Lansing, MI 48823

PARTNERS PO Box 22067 Lansing, MI 48909 517-318-2290




Customer Referral Program provided by GreenStone.

At GreenStone, we know our customers are the reason for our success. That’s why we developed the Pass-It-On referral program. When an existing customer refers a friend or family member to us, we thank them with a $50 gift card. Be part of a company that truly values its customers; contact us today to find how you can start earning your rewards!

800-444-3276 *Existing customers will receive one $50 Gift Card only when a prospective customer establishes a new business relationship with GreenStone FCS. Referrals for Residential Mortgages on less than 25 acres are excluded. GreenStone FCS reserves the right to make case-by-case decisions on the distribution of Gift Cards for referrals. One $50 Gift Card for existing customers per new customer referred, regardless of the number of new products used. Program effective January 1, 2009 and is subject to change.

Partners - Summer 2009  

GreenStone's quarterly agricultural member publication providing association news, guest columns on timely topics, and feature stories on va...