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Promoting the business success of our customers and the rural community

Fall 2011

market outlook fall-2011 speaking up for agriculture!

taking methane seriously celebrating 95 years of service customer satisfaction and maintaining excellence



service didn’t compare to “The GreenStone, nor did the rates ”


Note Fall 2011 Published by:

GreenStone Farm Credit Services

2 Comments from CEO Dave Armstrong CEO Dave Armstrong shares thoughts on 95 years of Farm Credit excellence and what some lenders can and can't bring to the table.

Summer has come to a quick halt as the weather changed from hot, sun-drenched days to crisp, cloudy mornings that linger through the evening. The colors marking the fall are appearing all around us, which undoubtedly means many are busy in the fields harvesting the bounty of the year. As you take a moment to review this latest issue of Partners, you’ll find the celebration of Farm Credit’s 95th Anniversary is also in full-swing, marking 95 years of planting partnerships and reaping great success with our members. The 95 theme continues as we announce GreenStone’s customer satisfaction results. This edition also highlights the advancements in the harvesting process for sugar beets, a review of our governmental relations initiatives and MI GreenStone PAC, and provides the latest market update. Happy reading…and as always, your comments and ideas are welcomed.



3 Market Outlook Ag Economist Bob Utterback shares predictions on this falls market and beyond.

9 Directors' Perspective

17 95th Anniversary

Three directors look back at the many changes farming has experienced over 95 years.

21 C  ommunity Partner 22 C  ustomer Satisfaction

12 GreenStone PAC GreenStone's PAC is a tool that members can use to enact positive change on behalf of agriculture and rural communities.

Please note: GreenStone offices will be closed in observance of the holiday season on the following dates:


13 Feature Article

19 Guest Column

Sugarbeet grower Doug Volmering discovers what it takes to build a better "Maus Trap."

Do new regulations on the horizon make methane digesters a business advantage or a necessity?

Fall Notes 7 News Update 8 Interns 11 Scholarships 16 Government Relations

November -Thursday, 24th -Friday, 25th December -Friday, 23rd -Monday, 26th January -Monday, 2nd

This newsletter is published quarterly for the customers of GreenStone Farm Credit Services. Partners, 3515 West Road, East Lansing, MI 48823 • 517-318-2290 •

Comments From CEO Dave Armstrong

While this year’s planting season is certainly one most of us would like to forget, Mother Nature has smiled on the majority of GreenStone’s territory since the middle of July with record setting heat accelerating crop maturity and rain coming just in the nick of time to allow corn pollination to occur. Even though corn yields have been adversely impacted in several parts of our service area, it appears that overall we should experience an “average” crop as long as Jack Frost doesn’t arrive early! Other crops appear to be progressing nicely with good reports on fruit, vegetables (some exceptions due to overwhelming down pours in some areas), soybeans, wheat, sugar beets, and hay. Prices for most commodities continue to be above the cost of production, setting up another very favorable year for the majority of our members. Farm Credit’s 95th Anniversary On July 17, 1916, President Woodrow Wilson signed the Federal Farm Loan Act providing government start-up capital for cooperative agricultural lending agencies; 95 years later, we’re proud to be the seventh largest Farm Credit Association, serving more than 20,000 members throughout our chartered territory of Michigan and northeast Wisconsin. On page 17 you’ll find details on how GreenStone is taking

part in the national celebration. Though there will only be one customer highlighted nationally from within our territory, I personally want to recognize and thank each of you for your dedication to agriculture and partnership with GreenStone. It is because of individuals like yourself that GreenStone can continue to be a leader in agricultural lending and a voice for our great industry. Beware of New Suitors With good yields and record setting commodity prices over the past several years, agriculture is once again catching the attention of those outside our industry. Everyone loves a winner and others are quick to join the parade when times are good, but equally as quick to run to the next best thing when times get bad! You likely have noticed this new found attention from many and, in particular, other lending institutions who are desperately looking for somewhere to place their depositor’s funds to obtain better risk-adjusted returns for their shareholders who are typically NOT their customers. While GreenStone embraces competition, I would caution you to carefully consider the following questions before deciding if the new “kid” in town is right for you and the long-term success of your operation: 1. What is the historical commitment of the institution to agriculture over a long period of time? Do they have a track record of exiting the industry when other opportunities arise? 2. Does the institution have a broad array of financial products and services to meet all of your needs? Do their term and mortgage loan products have a “conversion” option like GreenStone’s whereby you can pay only a small fee to obtain a lower interest rate should rates decline without requiring a new appraisal or going through a whole new loan application process? Continues on page 6...

Fall 2011

Partners 2

MArket outlook

market outlook By Bob Utterback

Summer has given way to fall, and cool crisp mornings remind us that producers are now in the midst of harvest. Similar to last year, many producers will experience disappointing corn and soybean yields after another dry summer. There are a few questions on everyone’s mind: How high corn prices will have to go to ration demand and stimulate production next year? How fast will demand be rationed and will it be gradual or like falling off a cliff? If prices go too high, what is the long-term risk and how fast will these risks materialize?

"If prices go too high, what is the long-term risk and how fast will these risks materialize?"


Partners Fall 2011

The questions seem to be endless and the answers are not always black and white, but I hope you get the tone of the direction— higher but possibly very violent corrections all the way, which sends everyone to the medicine cabinet for some Pepto-Bismol®. Producers know that, if history is any guide, the higher prices go, the more potential we have for negative things on the other side of the rally (like the future federal debt problem brewing while we survive the short-term). Before I address the outlook potential, let’s review some basic assumptions that I believe are true today:

1. The best cure for high prices is high prices. We simply don’t know how high prices have to go to ration livestock usage, ethanol usage and the export markets. All we know is it will be obvious “after” the high is in place and the market is actively trending lower even though the bulls are still hanging onto their positions for one more rally to get back even.

FALL 2011

2. Short crops have long tails. This is a way of saying when we have a crop shortage due to a weather event [like this year’s dryness], a sharp price rally initially occurs to ration usage. I still believe this is immediately in front of the market and is why the bears need to keep their heads down. Eventually, a sharp run up in prices drives demand elsewhere (such as corn producers to wheat or simply drives them out of the market due to profit margin). This is called demand destruction.

MArket outlook

why not cash in the sure thing and hold your speculative position in the market with a known cost/benefit strategy rather than an all-or-nothing cash sale.

At the same time producers are being motivated to produce not only domestically but internationally. There is a saying I recently heard that I fully respect, “A well fed population is a very docile population.” The current rise in global food prices is quickly going to become a national security issue for many governments. When politicians are backed into a corner, you don’t know what the late night deals will be, but you can be sure it will not be to make commodity prices go higher and cost consumers more! Other than weather, I believe this is one of the most difficult wild cards to predict how it will be done. I am confident the long-term policy will be directly pointed at reducing overall food cost. This is why the corn ethanol policy has extreme exposure as we move into 2012. I would not be surprised at all to see the EPA reduce the ethanol mandates, which could take significant need for corn production out of the domestic production equation. Case in point, Brazil just lowered their standards from 25 to 20 due to not enough domestic production and we have to rely on U.S. imported ethanol. 3. Bulls and bears get fed, but hogs get slaughtered! If anyone has not sold any of their 2010 production, they have hit a home run; but remember that, until it is sold, they are at great risk. I sense producers are getting very bullish. My fear going forward is they look at the tight stocks. Look at early sales and desire to get the lost income back on their balance sheet. Looking forward I sense they could simply put the remaining old crop inventory in the bin. Try to get long on a winter lull in prices and hold off for a summer price event a third time in a row. It has been my experience that, when everyone is in position and ready for the party, the market does its best job of frustrating the most people. Be realistic in what you want from the market. Don’t use your grain bin as a speculative tool. If you feel the odds are high for a summer weather event,

CORN: I strongly believe most of the bullish fundamentals will be known and fully factored into the market sometime between the October supply/demand report and the bin doors shutting around Thanksgiving. Old crop will move from a trending market to a consolidation market at an exceptionally high price. The market will then regain strength as we move into March/April in an attempt to get 95-plus million corn acres planted. 2012 and beyond sales— Get close to 50 percent sold between now and March, somewhere between $6.90 and $7.50 basis the December 2012 contract. My bias would be to do 25 percent in the cash and 25 percent in a covered futures position or long put position. Move to 75 percent price during June and then hold back 25 percent until the spring of 2013. The only exception is if December 2011 were to move between $9 and $10; I would be much more concerned that demand destruction was occurring if this happens and would have to speed up forward selling percentages. If this were to occur, I would also suggest having a cap on upside risk exposure which mandates some action if the market starts to have upside price breakouts after early April.

Recommendation: Since carry between December and September is well below carrying cost and basis is expected to recover quickly as we move into December, I recommend old crop corn be moved at that time. If speculative reownership is desired, focus on buying the July vertical call strategy which implies a call at-the-market and selling a call out-ofthe-market at the desired premium cost you would like to spend. Knowing your risk is a key factor.

Fall 2011

Partners 4

MArket outlook

SOYBEANS: Overall, I believe the drop in yields will not be as drastic as corn, but we are still at reasonably tight stock levels. If South America does follow through with its expectation of increasing corn acres and China continues to increase its hog herds, the demand outlook for U.S. soybeans in 2012 looks great. This is why the market broke above $14.10 [November soybeans] and looks to be on track to test all time highs if yields drop below 41 bushels. However, even with the strong price outlook of $16 front end, I do not encourage any producer to actively store soybeans in the bin from this fall to next summer in the hope of a price rationing event. I suggest taking the sure thing—start scale up, selling any remaining old crop inventory and then [on some harvest price pressure say between $13.50 and $13] start reowning in a July 2012 call option strategy to have a presence in the market. WHEAT: With the government subsidized crop insurance rates being high, I expect many will attempt to get wheat in the ground this fall and decide next spring if they are going to keep it. Subsequently, the initial domestically planted acres could be rather high if fall weather cooperates. If this is combined with the long-term expectation that Europe, Russia and bordering countries that can plant wheat are becoming very motivated to increase Recommendation: supplies of feed wheat Consider a wheat/ to meet the growing soybean double crop demand of China’s rotation program if hog and chicken possible. I believe producers, we have a producers should start fundamentally bearish selling at least 25 supply outlook. I percent of their wheat suggest wheat will rally production basis for if corn prices can ignite July 2012 at $8.50-plus. this fall. The next 50 percent should be held off for a possible spike to LIVESTOCK: Cattle, $9.25, but realize it is hogs and chickens are going to be squarely now going to be forced set on the shoulders to face the reality of of sharply higher corn sharply higher feed prices and a potential costs. For most of 2011 disruption in getting the higher corn cost the wheat planted was offset by aggressive this fall. forward buying feed strategies and a consumer market that will continue to buy meat products at higher values. I would, however, say we have now come to the end of where consumers are going to freely 5

Partners Fall 2011

accept higher food prices. Pushing back is already starting to occur and it’s going to get even worse if the general economy continues its sluggish pace for the remainder of 2011 and the first part of 2012. Over the next few months I expect a moderate reduction in all cattle, hog and poultry breed stocks as the weaker producers decide it’s not worth the time and effort and move to the sidelines. This will only [long-term] result in an already concentrated industry to shrink even more which consumers don’t want to hear. While consumers may not like it and call for political action, by the middle of 2012 and beyond I expect we will be amazed by the speed and potential blow off highs that will be seen in the beef, hog and chicken markets. I suggest being an aggressive buyer of livestock by October to early November and get the freezers filled up! Summary: Grain and livestock producers will see exceptionally profitable prices. As the budget battle in Washington, D.C. continues, the responsibility of protecting long-term profit margin will increasingly fall on the producer’s shoulders. Producers will need a solid multiple-year marketing plan and work closely with their bank and commodity advisor/broker to enact that plan. (Utterback Marketing Services looks forward to the challenges ahead and its staff is quite interested in working with you to help establish and implement a long-term market plan that assures long-term survival in a market of tremendous volatility.) 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 30 years of experience analyzing ag commodity markets, with special emphasis on the corn and soybean markets. Strategy updates are available by subscribing to Utterback Marketing Services, Inc.’s email/internet services at or by calling 800.832.1488 (ask for Laura). The information provided is believed to be reliable. There is risk of loss associated with trading futures and options. Consult your Risk Disclosure Statements before trading. Commodity trading may not be suitable for recipients of this outlook. To comment on Outlook, email to The opinions stated herein are not necessarily those of GreenStone FCS.

CEO Comments

...CEO Comments continued 3. How well does the staff assigned to your account understand agriculture, especially YOUR farm operation? Will they understand the cyclicality of the business, your marketing strategies, and the need for margin money and other more sophisticated financial structures? Do they treat you with respect and professionalism or are you simply a number?

“At GreenStone, we take pride in serving the financial needs of agriculture and the rural communities we serve year-in and year-out, no matter what the economic or weather conditions may be.”

4. W  ill the attractive interest rates and terms being offered today be there year-in and year-out, or is this a onetime offer to buy business until other, more attractive, opportunities arise? 5. R  ead the FINE PRINT! Are there prepayment penalties on that new transaction? Is the rate really fixed for the length of the loan or does the loan balloon at the end of the term and is required to be renewed under new terms and conditions? 6. H  ow committed are they to your rural community? Do they have a physical presence that ties them to a longterm commitment to your area? Do they give back to the community through countless volunteer hours and contributions to FFA, 4-H, and so on? 7. H  ow financially stable is the new competitor? Do they have an income stream and capital position that will allow them to stand with you during tough times? 8. W  ho do the earnings of the bank go to? Local customers or shareholders and managers who reside out of state or overseas? 9. A  re their terms responsible for the local agricultural economy? Are they willing to fuel escalating land values by lending ever higher amounts simply based on the current value of the collateral being pledged? 10. And finally, ask yourself if this organization has your best interests at heart, rather than the performance of its own stock price? At GreenStone, we take pride in serving the financial needs of agriculture and the rural communities we serve yearin and year-out, no matter what the economic or weather conditions may be. It’s who we are and what we do. Our mission is to provide a DEPENDABLE, COMPETITIVE, and RESPONSIBLE source of credit in good times and bad to farmers, ranchers, rural residents, and eligible agribusinesses in our chartered territory. You, our members, are also the owners of your cooperative that is governed by an elected board of your peers to ensure we remain focused

on your needs. All of the net earnings of the organization are either paid out to you in cash or retained to capitalize future growth and/or absorb risk during the down cycles. While interest rates are important, they are not the only determinate of value. GreenStone performed admirably through the credit crisis of 2008-2009 by maintaining a steady stream of fixed-rate funding at a time when some customers learned that their banks would not extend new loans because of “frozen” liquidity due to a multitude of reasons. Some producers at those affected institutions would have paid any rate of interest just to get funds to lock in operating inputs at that time. Competition is good for everyone! It’s what our marketbased economy runs on, but make sure you make informed decisions before choosing a newly active entrant into any market. Solid, long-term relationships take time to develop, so don’t be too quick on the “trigger” because when something looks too good to be true, it probably is! GreenStone Customer Satisfaction Score Reaches 95 Percent For only the second time in GreenStone’s history dating back to 2000, an independent third party research organization has certified that its customer satisfaction score has reached a 95 percent “very satisfied” or “satisfied” rating! This is world-class performance and something many companies, especially financial services firms, only dream about achieving. We are humbled by these results that you have bestowed upon us as an organization and are proud to share additional survey findings on page 22. You are why we exist and we deeply value the trust and faith you have placed in us to be your financial services provider of choice! As always, feel free to contact me at 517-318-4105 or if I can ever be of service.

Dave Armstrong

Fall 2011

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News update



fall 2011 AutumnFest 2011 The Michigan State University College of Agriculture and Natural Resources is hosting AutumnFest, Saturday, November 19, at the MSU Pavilion. The event starts at 8:30 a.m. and runs until noon prior to the kickoff of the MSU vs Indiana football game.

Take this opportunity to join friends, family and fellow Spartans for food, fun and football and 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, 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 517-355-0284 or email

Michigan Livestock Expo 2011 The Michigan Livestock Expo promised to charm in its third year and the Sale-abration on July 19 delivered, raising $173,400 for youth. The auction brought together almost 50 companies and individuals

to support the top exhibits from the show. GreenStone was a supreme sponsor and participant of the event, contributing to the purchase of four auction lots including the Grand Champion Goat exhibited by Kelsey AcMoody, the Great Lakes Grand Breed Lamb exhibited by Adam AcMoody, Sarah Kennedy’s Showcase Lamb, and a Showcase Hog exhibited by Matt AcMoody. GreenStone employees once again raised dollars through an internal fundraiser to support this youth livestock auction in Michigan, and the FFA Foundation in Wisconsin. Staff generated almost $5,500 in donations for these organizations, part of which was used to purchase the Showcase Beef lot exhibited by Spencer Fisher at the Michigan Livestock Expo.

Community Hoophouse Project GreenStone partnered with the Michigan State University (MSU) Department of Horticulture, the MSU College of Agriculture and Natural Resources, Michigan Farm Bureau, Saint Vincent Catholic Charities, the Michigan Department of Agriculture and Rural Development, and the Summer Place Townhomes to move a hoop greenhouse from Carleton, Michigan and rebuild it for a large refugee community at Summer Place Town homes in Lansing, Michigan. The refuges are trying to adjust to the culture, food, schools, economic systems, and a new way of life. Previously, they tried to farm a garden area but the Michigan climate is too cold for some of their ethnic foods and in the winter they miss fresh food from their origin. In order to provide them with some valuable agricultural skills and help them adjust; GreenStone donated the hoop greenhouse structure and rebuilt it for the refugee community along with the other donors for supplies and capital.


Partners Fall 2011

A group of volunteers from partnering organizations gathered on September 10 and 11 to construct the house.


GreenStone interns left to right: Sarah, Mike, Josh, Andrew, Matt and Steven.

Intern Spotlight Shaping the Future Together GreenStone strives to provide an avenue for learning and career development to current college students. In return, the organization is positively impacted by the outstanding contribution of these talented individuals, and for this we are very grateful. The six summer interns comment on how their experience with GreenStone has helped shape their future career goals.

Sarah Spagnuolo, Operations Intern "I enjoyed the experience of working for GreenStone and learning about the operations of a big corporation. It was exciting to have the independence to make changes or add ideas to the projects I was working on. This experience has given me more insight about pursuing a career in operations or management after I graduate." Mike Niesyto, Credit Intern “The farm visits I went on were great. Not only did I enjoy meeting the farmers, but was able to see a clearer

picture of the projects I was working on. This internship gave me the opportunity to apply what I’ve learned in school to the real world. Putting theory to practice this summer has me excited for another semester of classes.” Joshua Gunderson, Credit Intern “I really enjoyed being able to work with a wide range of people in multiple segments of GreenStone throughout the summer. From these experiences, I have determined that a future career as a Financial Services Officer in the Farm Credit System is of great interest to me. I really enjoy how it combines agriculture, business, as well as a strong interaction with other people.”

Andrew Warner, Audit/Appraisal Intern “I never felt I was “just an intern” while working at GreenStone. I was involved on a high level in a variety of projects during the summer and the knowledge I gleaned about agriculture, business, finance, and life will be invaluable to my future. This experience has allowed me to narrow down my list of desired characteristics in my future employment.” Matt Naeyaert, Credit Intern “By working here at GreenStone I got to witness, up close and personal, how a financial institution operates and how each department contributes to the ultimate goal. GreenStone also opened my eyes to the world

of Farm Credit, which I find very interesting and certainly a great option for a future career. Upon graduation in May with a degree in economics, I’ll be excited to begin my career in the finance industry.” Steven Schaefer, Legal Intern “My favorite part of my intern experience was meeting some of the customers and hearing how they use Greenstone’s services to grow their business. This experience has encouraged me to further consider opportunities in the agricultural or food industries as I focus on a career in business law.”

Fall 2011

Partners 8


Ninety Five


Ninety-five years covers a time of a 306 percent

go from 35 hours of labor used to produce 100

U.S. population increase with a 96 percent

bushels of corn, to just less than three hours.

decrease in the number of people farming

It is evident times have changed! Take a trip back

the land. At the same time, these industrious

through history and read what these directors

farmers have taken advantage of developing

believe was most significant to the agricultural

communication and farming technologies to

industry’s achievements over the last 95 years.

Frank Engler I remember my dad telling me stories about working the fields with horses when he was a boy, so naturally I went back to him and asked what he thought was the biggest advancement in the last 95 years. After about an hour and thirty different ideas I decided to look back to 1918. In 1918 the Noble prize was


Partners Fall 2011

awarded to Fritz Haber. Haber and Carl Bosch developed a process to synthesize ammonia, a key to producing nitrogen for fertilizer. The availability of cheap nitrogen fertilizer started production agriculture. With this advancement, farmers began to treat their farms as businesses and analyzed the bottom line. What followed was a desire for better technology and genetics. A comparison could be made to Henry Ford. Ford was able to mass produce automobiles. The Haber-Bosch process allowed mass

production of nitrogen fertilizer. This process is still used today to produce over 500 million tons of artificial fertilizer per year using only one percent of the world energy supply. It is estimated that 40 percent of the world population is sustained by food raised using fertilizer produced by this process. The impact the Haber-Bosch process has had on the ability for farmers to feed the world is why I consider this to be one of the most important developments for agriculture in the last 95 years.


Bruce Lewis Over the last 95 years, much advancement has been made to allow the American farmer to be more productive. From the early 1900’s the use of mechanization was starting to outpace the use of animals and human power until it bypassed the use of animals in the 1950’s. From the Rural Electrification Act in 1936, came many advances including electricity in the home, fans in barns,

David McConnachie Since there have been too many significant agricultural achievements during the past 95 years to keep my answer fairly short, I'll stick to just the last 35 years while I have been actively farming. Although my list is in no particular order, one of the more important

cooling of milk, drying of grain, the list goes on! In the 1950’s, the interstate system allowed for easier transportation of agricultural products from the grower to the processors and eventually to the consumers. The biotechnology age evolved from the 1960’s where wider spread use of chemicals and hybrid seeds were being adapted and utilized to today’s modern day variety and genetically modified organism (GMO) crops. Along the way land grant colleges have helped test and develop new uses for products and production practices, which have enabled farmers

to feed an ever increasing world population.

changes is the entry of genetically modified seeds—which is HUGE! Growing GMO seeds helps to prevent most insect and weed damage, and enables us to grow varieties for specific end uses such as medical, ethanol, oils, flours, drought and many other possibilities. The greater use of fungicides helps insure plant health.

Commodity market exchanges let all, farmers and non-farmers, participate in farm commodity trades which create volatility but give producers a lot of opportunities to buy and sell our products. Add world markets and free trade into this scenario—WOW!

So many things can now be done with Global Positioning System (GPS) technologies - soil sampling, operating equipment, fertilizer application, seed placement, traffic compaction patterns, etc. Combining those possibilities with wireless technology systems like cellular phones and computers, and you have created limitless opportunities to make management decisions for the betterment of stewardship and profits.

Agriculture has been presented with many challenges in the last century and has been able to meet those challenges and grow from them. With the prediction of 9 billion people worldwide by 2050, I believe agriculture will be able to supply the needs of those people in the future.

Last, but not least, THE EQUIPMENT. All the changes in size, ease of use, comfort and variety of everything from grain set-ups, tractors, combines, trucks and choppers all the way down to the smallest tools in your shop sure have transformed agriculture's landscape. Though my perspective is from a crop farmer's view, I know the transformation in all the other agricultural specialties have been just as spectacular!

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Partners 10

Scholarship Winners

Scholarship Winners 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.

Bradley DeCook

Casie Forbush

Bradley DeCook Son of Larry and Donna DeCook of Macomb, Michigan Attending: Michigan State University Majoring in: Greenhouse Management Prefers to spend time: Working in the greenhouse or going out with friends Fantasy dinner guests: Benjamin Netanyahu (Prime Minister of Israel), George W. Bush, and Dale Earnhardt Jr. He is most excited for college because: “I will be able to meet new people, be away from home, but not too far, and study my interests.” Casie Forbush Daughter of Mark and Anne Forbush of Corunna, MI Attending: Michigan State University Majoring in: Agricultural Education Dream job: Owning her own bake shop


Partners Fall 2011

Emma Heck

Fantasy dinner guests: Gerard Butler (actor), Jane Lynch (actress on Glee), and Jennifer Nettles (Sugarland band member) She is most excited about college because: “I am looking forward to serving as a state officer for the FFA.” Emma Heck Daughter of Annette Heck of Monroe, Michigan Attending: Michigan State University Majoring in: Agricultural Business Management Prefers spending time: Playing soccer, working on the corn maze, or hanging out with friends Furthest place traveled: Alaska She is excited to go to college because: “I’m excited to move on to the next chapter of my life and figure out what I am going to be doing for the rest of my life.”

Garrett Slavic

Ryan Wilfert

Garrett Slavic Son of Jim and Doreen Slavik of Ashley, Michigan Attending: Michigan State University Majoring in: Animal Science Dream job: Large animal veterinarian specializing in embryo transfer Favorite website: Slavik Show Cattle, slavik_show_cattle.html He is most excited about college because: “I will be able to start learning about topics that pertain to my area of interest – agriculture.” Ryan Wilfert Son of David and Theresa Wilfert of Two Rivers, Wisconsin Attending: University of Wisconsin – Madison, Farm and Industry Short Course Majoring in: Crop and Soil Sciences

Sarah Kuperus

Interesting fact: At age 14 he was the youngest State FFA Tractor Driving winner Dream Job: Operating his own agricultural enterprise He is most excited about college because: “It provides a vast new educational experience for continuing my career in production agriculture.” Sarah Kuperus Daughter of Kal and Anne Kuperus of Dorr, Michigan Attending: Michigan State University Majoring in: Crop and Soil Sciences Interesting fact: She enjoys baking bread and bread products for her family. Favorite website: Etsy (vintage clothing ), She is looking forward to college because: “The new relationships I will form and the new things I will get to experience.”

MI GreenStone PAC

Speaking Up for Michigan Agriculture GreenStone Farm Credit Services created a state political action committee, named MI GreenStone PAC, during 2010 for the benefit of its members to be collectively engaged in the political process. Many of our members have requested GreenStone to get engaged in the legislative and regulatory process over the last several years. The MI GreenStone PAC was organized to help provide a stronger voice for not only GreenStone, but our industry as well, in Michigan state government. While many state PACs exist, the MI GreenStone PAC is as unique as GreenStone itself. GreenStone is organized as a cooperative dedicated to promoting the financial success of our members and the rural community by being the best at providing credit and financial services. All of our efforts are focused on preserving and growing your financial cooperative to benefit you, its members. MI GreenStone PAC is a bipartisan state political action committee and will serve to collect and contribute money to candidates for state office who support the common legislative goals of promoting growth in agriculture and rural communities throughout GreenStone’s territory. These contributions

encourage a strong bond and working relationship with elected officials sensitive to the common interests of the GreenStone cooperative mission. Politics is what we all understand it to be: politics. The opportunity to be recognized and heard in the political environment is diminished without a collective voice. The MI GreenStone PAC serves to provide a level of educational support to protect the agricultural enterprises that sustain the ownership of the Farm Credit cooperative within the GreenStone territory. GreenStone also believes in the wholesale support of a diversified agricultural industry. While recognizing that politics is challenging and all of us will not always agree on all issues, we hope that a collective voice from agriculture will increase the level of awareness and support for pro-agriculture policy to have a more positive impact on our state’s economy and our way of life.

Your support of MI GreenStone PAC will enable a more effective collective voice to engage and educate candidates and elected public officials on the importance of creating and maintaining a sound agricultural environment allowing for financial success of rural agriculture interests. It may mean staving off bad legislation, or creating positive legislation as was done in the Michigan Business Tax (MBT) and the new Corporate Income Tax, putting GreenStone in parity with other financial organizations. The unified voice of our members through the MI GreenStone PAC will help build relationships that will support the maintenance of a favorable agricultural business climate helping it to move forward and protect the cooperative Farm Credit ownership you enjoy

together with your 20,000 fellow members. Your contribution to the MI GreenStone PAC is important toward creating this collective voice. This PAC tool is critical considering the constant election cycle of political leaders. Each election provides an opportunity to identify and support leaders that are receptive to learning about our industry’s collective financial interests and common goals, as well as those of GreenStone itself. Your contribution will help make the voice of Michigan agriculture stronger. Thank you for your support of this effort that MI GreenStone PAC has embarked upon for you, your farm business, and the rural community where you reside.

Fall 2011

Partners 12

feature Story



Yield Sweet

Results! A half of a million dollars seems a bit steep for a mouse, unless of course it’s a Maus. Pronounced the same as the cheese-loving critter and the gadget that controls a cursor, the Ropa Maus is anything but tiny and prefers beets to cheddar. By Jennifer Vincent

The sugarbeet loading and cleaning, German-produced Maus was introduced more than a decade ago, but its limited production and hefty price tag has hindered its adoption, albeit growers and processors attest to its multiple benefits. Harbor Beach sugarbeet grower Doug Volmering, 38, became intrigued with the machine after seeing it operate in Ontario, Canada. “It greatly simplifies sugarbeet production and dramatically streamlines the process for the company (processing plant),” he says. A third-generation farmer, Doug farms 850 acres, including 250 acres of sugarbeets, 150 of edible beans, 100 of wheat and 350 of corn. He is in a partnership with his brothers Les, Rich and Bill, forming Volmering Brothers LLC,


Partners Fall 2011

to share equipment, repairs and fuel, with inputs being separate. Their father Jerome, although semi-retired, is a valuable asset, as well as nephews Troy and Ryan. Doug and Les were interested in the Maus, as was area grower and friend, Chris Guza. The Maus is a self-propelled machine that uses a 28.5-footwide beet pick-up system to lift beets piled at the headlands, thus eliminating piling trucks running side-by-side with the harvester in the field. It also utilizes two sets of rollers to clean beats before loading up to 350 tons per hour onto trucks on the road. This can be done over ditches, but not farther than 22 feet from the Maus. The removed debris is distributed over the entire collection width. “No more tare pickup at the piling stations and no more worry about getting someone else’s disease or weeds,” Doug adds. With the addition of Roundup Ready beets, growers have increased yield, requiring more trucks and larger trucks in the

feature story

“The pilers aren’t getting any bigger and the lines are just getting longer.”

field. “The pilers aren’t getting any bigger and the lines are just getting longer,” Doug says. “I was really impressed to see this machine loading clean beets onto trucks over ditches,” he says. With the Maus, beets can be delivered directly to the processing plant. Growers can eliminate trucking costs from field to piling station, reduce labor by eliminating trucking time in the field and wait lines, while providing more flexibility with harvest. Doug, Les and Chris formed the Thumb Maus LLC and put pencil to paper. With the main incentive being reduced compaction in the fields

and less trucking time, the trio decided to look at a used machine that could be paid off over several years. With that in mind, two years ago the Volmering brothers and Chris approached Michigan Sugar Company, a cooperative owned by sugarbeet growers in Michigan and Ohio, and asked for permission to purchase a Maus. On board After several meetings, Michigan Sugar not only agreed to the purchase, they added another incentive – the Maus could be used for early harvest of his beets and his neighbors’ who would normally deliver to the Ruth Receiving Station.

With those assurances, the LLC approached Financial Services Officer Joe Mausolf with GreenStone Farm Credit Services for financing of a new—not a used—Ropa Maus. “I’ve done financing for Volmering brothers for years and this purchase was really dependent on Michigan Sugar,” says Mausolf. “Once they had approval, that’s when we (GreenStone) really got involved. We were able to get a commitment to them fairly quick and lock in good interest rates. And, because of the timing, the Euro dropped in comparison to the dollar and saved them some money.”

The machine was delivered in early August of 2010 and by later that month, the early harvest of beets was underway. Because of the Maus, the cleaning of a conventional piler was not needed and the Ruth Piling Station was idle during early harvest —saving Michigan Sugar about $2 per ton. The new delivery system was coined Ruth Direct and in its first year, 98,420 tons of beets went directly from the field to the factory utilizing the transfer trucking of Tony Guza Trucking. In total, including the normal harvest, the Maus loaded 150,959 tons of sugarbeets. “That includes eight local farming Fall 2011

Partners 14

feature Story

operations that we custom load for,” Doug says. Building on the success of last year, Michigan Sugar plans to expand the Maus operations to two new locations around the Verona, Meade, and Breckenridge beet receiving stations. Michigan Sugar will contract with three different Maus operations to clean and load sugarbeets out of grower fields. Steady growth Doug and his brothers grew up on a 180-head dairy farm that also raised about 500 cattle. After graduating in 1992, Doug continued to farm at home, but set out to establish his own farm. In 1994 he bought his first 120 acres on a land contract. “I sold the house that was on it and made enough to buy another 80 acres,” he says. “I still lived at home because, heck, mom took real good care of me. It wasn’t until I was about 23 that I rented a house.” Doug was setting an independent course, while maintaining an interest in the home operation. In 2003 the family decided to sell the cows, build a shop and slatted-floor cattle barn. The four brothers now have 2,000 fed cattle at their farms. In early 2011 they formed Volmering Farms LLC for their trucking needs, which includes hauling fat cattle to the slaughter houses, feeders from down south and transferring sugerbeets to the various factories. That decision to expand their cattle business is a bit scary right now, Doug says. “With the price of corn, feeding out cattle is a lot more serious these days. There is so much overhead and these animals are very valuable. We just hope beef prices will support the corn prices.” The partnership has worked well for the brothers and has helped spread the risk.


Partners Fall 2011

To help with piling at the headlands, the Volmering brothers fabricated a steel cage-like piece of equipment —named the Maus Trap— to better stack the beets coming off the field. It is pulled across the headlands with the beets exiting out the back. It allows the beets to be stacked higher and at a width that is ideal for the Maus to pick them up.

Photos: © 2010 Michigan Sugar Company. All rights reserved. Printed with permission.

Mausolf says the Volmering brothers were, “trained well by their parents. They have a good working relationship and because of that, we (GreenStone) have built a relationship with them. When they need anything, they come talk to us.”

Sarah is the bookkeeper for Thumb Maus LLC, Volmering Farms LLC and Volmering Brothers Farms. “If she was not the bookkeeper, I would not be a farmer, at least not much of one,” Doug says. “I probably wouldn’t be a very pleasant person to be around.”

In 2002 Doug bought additional acreage and, “I shopped around for financing,” he says. “The service didn’t compare to GreenStone, nor did the rates.”

In total, the Volmering brothers are farming 1,500 acres of corn, 950 acres of sugarbeets, 450 acres of wheat, 500 acres of edible beans and 80 acres of soybeans.

The latest decision to purchase the Maus was also about the time Doug and his wife, Sarah, were approved for a construction loan for their new house that they moved into in December 2010.

When making decisions, Doug says, “It’s good to pencil out everything in detail. You can’t do things just because the neighbors are. It sure pays to keep good records and Sarah does a great job at that.”

Governmental Relations Program

Invasive Swine, Foreclosure Reform & Federal Farm Bill Take Center Stage As reported in the last issue of Partners, government action affects our bottom line —and yours. Not content to rest on our laurels after successfully achieving equal tax treatment between Farm Credit associations and other financial institutions in the old Michigan Business Tax and the new state Corporate Income Tax, GreenStone's government relations team has moved on to other key issues. As you may know, the Michigan Department of Natural Resources (DNR) recently issued an order, based on sound science, which classifies exotic swine an invasive species subject to eradication. Invasive swine species present a major risk of disease to Michigan's commercial pork and dairy herds and an equally large threat of crop damage to commodities such as corn and soybeans. Accordingly, GreenStone joined

date for its eradication order from July 8 to October of 2011 in order to give the Senate additional time to craft "compromise" legislation if at all possible. So far, it

appears that the regulation bills do not have the support necessary to pass before the October deadline. virtually every other major agricultural, conservation, outdoor recreation, and environmental group in supporting eradication and opposing bills which seek to regulate canned hunts of invasive swine at game farms. When speaking with legislators, we were often asked why GreenStone was taking such a vocal position in support of eradication. The answer is two-fold. First, as a cooperative agricultural organization we exist to support our membership and many of our key members, pork and dairy producers in particular, asked us to stand up for their interests in the Michigan Legislature

which we are proud to do. Second, as a financial institution we have a duty to protect the value of our assets. GreenStone has over $1 billion of loan volume to pork and dairy producers alone. Again, any regulatory threat to our members and our assets is something we take very seriously at GreenStone and we will work tirelessly to protect both. As of the writing of this article, a package of invasive swine regulatory bills which would rescind the DNR's eradication order has passed the Michigan House of Representatives and is pending before the Michigan Senate. In the meantime, the DNR has extended the effective

We want to take this opportunity to thank our employees and board members who have answered our call to make direct grassroots contacts to members of the Michigan House and Senate regarding this issue. We also want to encourage all who are willing, to join this effort as we team our coalition members in the final push to support eradication and defeat the regulatory bills in the Senate. Please contact Pete Lemmer, at 800-9680061, who works in conjunction with our lobbying firm, Kelley Cawthorne, to coordinate grassroots contacts. As the great swine debate winds down, other issues are Fall 2011

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Governmental Relations Program

emerging. For example, this fall the Michigan Legislature may take up a package of bills to extend and/or modify a series of foreclosure reform measures which took effect two years ago. In case the reform measures are continued (which is not certain), we are working to gain appropriate state recognition of the comprehensive federal "borrower bill of rights" which Farm Credit associations such as GreenStone must adhere to. There is some overlap between the two regulatory schemes and it is important for policymakers to recognize the unique role

and status of Farm Credit associations in order to avoid unnecessary double regulation wherever possible. At the federal level, the Farm Bill is up for reauthorization which may come as early as the fourth quarter of this year. We've worked closely with our colleagues in other Michigan agricultural organizations and with the office of Senate Agriculture Chair Debbie Stabenow (D-Michigan) on the Farm Bill. Most recently, we joined a host of Michigan agricultural industry representatives for a

Candid Comments... GreenStone FCS, I wanted to thank you for the guided turkey hunt you awarded in the Outdoorama Show drawing. This was my first time hunting wild turkey. The experience was incredible! Needless to say, I’m hooked for life. Your partnering guide, Don MacMillen, at Close Encounters Guide Service provided an experience second to none. He did his homework and his expertise and skills allowed me to bag a 23 pound. Tom with a 5 inch and 11 inch double beard. What a rush. Thanks again for the hunt, and thanks to GreenStone for being an outstanding lender that understands farmers, and the rural way of life. – Sincerely, David Zelisse


Partners Fall 2011

Washington, D.C. version of the monthly Michigan Agri-Business Association sponsored "Ag Breakfast" which drew a great crowd of members of Congress including Senator Stabenow, U.S. Senator Carl Levin (D-Michigan), U.S. Representative Hansen Clark (D-Detroit), and U.S. Representative Bill Huizenga (R-Holland). Later that day, we met with Senator Stabenow's Agriculture Committee policy staff to give the Michigan “on the farm” perspective of the Bill. It was a very successful trip which we may do again as early as this coming February.

We trust this short article gives you a sense of the importance of GreenStone's government relations program to your bottom line as a GreenStone member. Taxes, regulations, and federal farm policy directly affect you, your livelihood, and your way of life. We are working hard to make sure that as members of GreenStone, your voice is heard in Lansing, Michigan and Washington, D.C. on the issues that affect you most directly. In 2012, we will be starting work to bring this successful, service driven government relations program to our Wisconsin service area as well.

Farm Credit 95th Anniversary It is hard to believe it has been 95 years...95 years of growth, advancement, change and, most importantly, commitment. As we celebrate the 95th

Anniversary of the Farm Credit System, we also mark the success of our members who drive the achievement of the agricultural industry.

The Farm Credit System was established by President Woodrow Wilson on July 17, 1916 to fill the need for long-term agricultural credit, and today, serves nearly 500,000 borrower-owners with more than $175 billion in loans and financial services in all 50 states and Puerto Rico. In recognition of our members and support of our industry, Farm Credit has launched a website where stories from customers throughout the nation are being published. The site, named “Producing Excellence,” can be found at

News Update

ProducingExcellence. Each story will contribute to celebrating 95 years of agribusiness leadership and entrepreneurship in American agriculture. Representing GreenStone’s more than 20,000 members, Sackett Potatoes has been selected to be featured on this national site. GreenStone is proud to share the profile of this Michigan producer, which will showcase the great diversity of agriculture in Michigan and Wisconsin, while highlighting the success of our members throughout our territory. Sackett Potatoes, based in Michigan’s Mecosta County, is owned by Alan Sackett together with his sons, Jeff and Brian. Sackett Potatoes has been very progressive about growing the operation while transitioning more of the ownership and management responsibilities to the second generation. Their full story will be launched online this month. We’d encourage you to take a look at their, and the other incredible stories, on Farm Credit’s Producing Excellence site, ProducingExcellence. The Farm Credit System has also partnered with America’s Heartland, a PBS television program featuring American farmers and ranchers who share a passion for hard work and excellent products, as well as a commitment to food safety, sustainability, environmental stewardship and animal welfare. Season

seven, which also airs on RFD-TV, began in August and will run through August of 2012. Each PBS station sets its own airdate and time, therefore visit www. and to find scheduling for the show in your area. We invite you to join in the celebration of this significant achievement. A 95th Anniversary celebration wouldn’t be possible without the commitment and partnership of our members!



hiring. Looking to make a positive move? We currently have openings

Great Lakes Fruit, Vegetable and Farm Market & Michigan Greenhouse Growers Expo

for qualified applicants: • Financial Services Officer • Accounting/Tax Accounting

Vist GreenStone at the Great Lakes Fruit, Vegetable and Farm Market & Michigan Greenhouse Growers Expo. December 6-8, we'll be on hand at the DeVos Place convention center in Grand Rapids to connect with customers and industry partners. See you there!

GreenStone's Hastings Branch Moves to New Location

• Branch Operations • Crop Insurance For more information or to apply, visit the careers section of our website at

On July 28, the GreenStone Hastings office moved to a new location at 333 West State Street in Hastings, just 1.2 miles northwest of the old location. This new office features enhanced facilities and additional parking for customers and staff, and represents GreenStone's commitment to our communities growing needs.

Supporting rural America.

Fall 2011

Partners 18

Guest column

Matthew Schroeder and Alan Hahn, Dragun Corporation

methane harvest Potential energy is roughly defined as stored or unrealized energy. The classic example from high school physics class was the archer with the arrow pulled back and ready to be released; the energy is potential until it is released.

Livestock farms have a lot of potential energy in the form of manure. Manure, as we all know, generates various gases, and unless captured these gases simply dissipate into the atmosphere. Some of these gases (methane in particular) are the source of potential energy. One of the ways to capture this potential energy is through the use of Anaerobic or Methane Digesters (Digesters). Digesters are not a new technology; however, the use of digesters on farms is still relatively new. According to the AgSTAR website (USDA and EPA joint effort), there are only 162 digesters on farms across the United States.


Partners Fall 2011

guest column

The digesters are simply a holding vessel where the manure “digests” or breaks down. Ideally, the breakdown occurs faster in the digester and gas production is much more rapid. For optimal digestion, additives or substrates may be necessary. Once the gases are captured, there are other considerations, such as, do you use all the energy on your farm or do you sell it back to the local grid? In some cases, you may choose to simply flare off the gases for carbon credits and not bother with generation of power. One of the other benefits of digesters is the resulting solid byproduct; a compost-type material in which odors have been significantly reduced. This material has several potential uses and can be sold as a soil amendment. With all this potential energy at farms, why isn’t everyone with a few hundred animals running to build a digester? In a word: cost. It is very expensive to build a digester (starting costs are typically in the six figures). That was part of the impetus behind AgSTAR, which is an outreach program designed to “reduce methane emissions from livestock waste management operations by promoting the use of biogas recovery systems.” Grant programs have been used to make digester programs more economically feasible; some states are more aggressive in providing

“With this data now available, some environmental groups are calling for more regulation of air emissions from livestock farms.” this funding. Another way to reduce costs is for multiple farms to create a “regional” digester. But for those considering digesters, there are other factors including operation and maintenance costs and the time and expertise to properly operate a digester. Also, as you consider return on investment, how much revenue will you get from your local utility for the gas or electricity? Strictly looking at a digester from an “environmental benefit” perspective, digesters can reduce odors, reduce methane emissions, reduce pathogens and reduce the likelihood of manure runoff from land application or storage overflow. There may be another reason to give digesters consideration:

Fall 2011

Partners 20

Guest Column

the pending environmental regulatory framework that may be forthcoming as a result of the completion of the National Air Emissions Monitoring Study. On January 13, 2011, The Environmental Protection Agency announced they are making publicly available the data from the two-year study of air emissions from animal feeding operations. With this data now available, some environmental groups are calling for more regulation of air emissions from livestock farms. Digesters certainly represent a lot of potential energy on livestock farms. For livestock producers, it may make sense to look into the

potential costs and benefits as it relates to your farm. You may want to talk to other producers that have a digester on their farm and see what their experience has been. For those interested in learning more, go to ABOUT THE AUTHOR 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. For more information, visit, or call 248-932-0228.

Supporting the Strong Roots of Rural America

Partners Fall 2011

The deadline to comply with the Spill Prevention Control and Countermeasure Plan (SPCC) rules is November 10, 2011. For more information about the SPCC rules, see GreenStone Partners Fall 2010 issue available at greenstonefcs. com. There is also a webinar and a SPCC template on National Milk Producers Federation website ( It would be prudent to evaluate your applicability as soon as possible as the penalty for non-compliance can be very steep.

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

Community Partner—


Dragun Corporation Reminder:

It is part of our mission, to provide leadership to the agricultural and rural communities we serve. GreenStone takes this commitment seriously, and is pleased to have provided over $310,000 back to your communities throughout the last year in the course of organizational sponsorships, donations and community support. Add to that close to $195,000 in youth support at local and state fairs and exhibitions throughout GreenStone’s territory, and thousands of staff volunteer hours, and

we believe you’ll find a cooperative true to its word. These local dollars are in addition to the Farm Credit National Contributions Program, which recently announced it has committed over $810,000 of the $2 million goal in national contributions support in 2011. Farm Credit’s national contributions are a sound complement to the millions of dollars and thousands of volunteer hours given annually by the five banks and 84 associations within the Farm Credit System.

Though the list is vast, some of the areas positively impacted by GreenStone’s partnership include: young farmer events, FFA, 4-H, agribusiness development, youth education and growth, commodity advancement, minority and community outreach, and member learning and recognition. More details on the Farm Credit National Contributions Program, including a summary of its recipient organizations, can be found by visiting: www. contributions.

Customer Satisfaction

Leading the Way With High Marks! For only the second time in GreenStone’s history dating back to 2000, an independent third party research organization has certified that its customer satisfaction score has reached a 95 percent “very satisfied” or “satisfied” customer satisfaction rating! This performance is not only outstanding for GreenStone, but is unmatched when compared to the 70 and 80 percent ratings traditionally achieved by similar top performing financial institutions. GreenStone is especially proud to announce the superior score as it supports the premise that a longterm lending relationship is not just about the rates and terms of a transaction, but rather the total value proposition provided by an organization. Other key factors include: having accessible funds delivered in a timely manner, having adequate financial resources, and being a lender that has a reputation for understanding the agricultural industry and rural communities it serves.

However, historical studies have shown that if members were to perceive that GreenStone does not meet their expectations on one or more of these core requirements, overall satisfaction would drop to less than 70 percent.

Likewise, meeting and/ or exceeding customer expectations with respect to the above outlined categories has a direct correlation on whether or not members will acquire another loan from GreenStone. In general, when exceeding overall expectations, over 80 percent of members would definitely acquire another loan through GreenStone. Conversely, when GreenStone is almost meeting or is failing to meet overall expectations, none of its customers say they would definitely acquire another loan.

We are humbled by these results that you have bestowed upon us as an organization, yet we know it is vital that GreenStone continues to strive to meet your expectations, paying special attention to the core requirements. Your affirmation of our performance in delivering a high level of service to you, particularly during some very volatile economic times, will only serve to deepen our resolve to not let up, and to strive ever harder to achieve higher levels of performance in 2012 and beyond!

Over 95 percent of members perceive GreenStone is meeting or exceeding all four of these requirements.

Fall 2011

Partners 22

3515 West Road East Lansing, MI 48823



committed. Serving rural America is our priority. Supporting your needs is our promise.

Over 95 years of commitment.



Partners - Fall 2011  

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

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