Partners - Fall 2012

GreenStone FCS

Fall 2012

Promoting the business success of our customers and the rural community

NEW DIRECTORS´ PERSPECTIVE SCHOLARSHIP WINNERS

FALL MARKET OUTLOOK

IT ALL

STARTED

WITH A

CHAINSAW UPCOMING EVENTS

DROUGHT PLANNING?

Editor’s

NOTE Fall 2012 Published by:

GreenStone Farm Credit Services

2 Comments from CEO Dave Armstrong CEO Dave Armstrong reflects on the growing season and shares highlights from recent months' activity.

I’m sure I’m not unlike many of you when I find it hard to focus on the year-end holiday celebrations until the fields are barren and the equipment is stored away. So when I walk into a store and see red and green holiday decorations filling the isles, I turn and focus on the end cap that houses the sparse supply of fall décor. After all, this is the season to be thankful for the food we’ll enjoy over the holidays, the blessings we’ve endured throughout the year, and the family, friends, teammates and employees that surround us. As you make your way through this latest issue of Partners and read about the triumphs and tribulations of your association and your fellow members, I hope you take a moment to be mindful of the good in your life, and for the good you provide to so many others who will relish the fruits of your labor. GreenStone is certainly thankful and we wish you the safest of harvests and, when the time draws closer, a joyous holiday season!

17

11

3 Market Outlook Agricultural economist, Bob Utterback, provides insight on how the markets will seek to balance the year's shrinking yields.

10 Buck Pole Contests Hunters across Michigan and northeast Wisconsin have a chance to win big this season.

13 YBSF Feature Hard work and determination has led to big success for Mike Sturgill in the logging industry.

17 Political Tools Learn how GreenStone is leveraging political tools for members.

21 19 Directors Perspective GreenStone's new directors discuss their first few months on the board.

21 Drought Preparation If further dry seasons lie ahead, how can producers prepare to tackle the challenge?

Fall Notes 7 Candid Comments 8 News Update 11 Scholarships 18 Harvest Gathering 18 Upcoming Events

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

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

COMMENTS

From CEO Dave Armstrong

The optimism I expressed in my Comments in the last Partners issue about the potential for record yields on many field crops this year slowly evaporated over the summer along with soil moisture in many parts of our territory.

T

he “drought of 2012” will be one for the record books as it impacted more than 70 percent of the geographic area of the country.

While the “drought of 1988” and the “dust bowl” days of the 1930s were certainly significant, they did not affect as large of an area as we experienced this year.

Fortunately, our association’s territory escaped some of the worst conditions which occurred in states like Indiana, Illinois, Iowa, Nebraska, and Missouri, among others. While the south/central counties in Michigan’s Lower Peninsula seem to be the hardest hit, many areas in the north/central portion of the state and our Wisconsin counties will likely have at least average corn yields and some may even set records.

Widespread rains in early August brought needed relief.

Though they were too late for corn in some areas, they should have helped improve soybean and sugar beet yields.

In fact, the Saginaw Valley and “thumb” areas of Michigan received too much rain which damaged the dry bean crop.

Go figure!

A Year of Weather Anomalies The question I am often asked these days is “how are your members doing financially given the drought?” Based on conversations I have had with many of our customers and staff members, I am pleased to respond that even though there will be pockets of stress due to the summer drought and spring freeze, our customers should generally come through in good shape for several reasons.

First, agriculture has been blessed with relatively good profit margins over the past several years which have allowed producers to build working capital to help them withstand the economic impact of events like these.

Second, the widespread use of crop insurance by most producers will help mitigate a large portion of the losses sustained by reduced yields.

As I write this, it is too early to tell exactly what the overall level of crop insurance coverage is for 2012. However, it is probably similar to 2011 whereby 60 percent of all Michigan crop acres were covered by some form of crop insurance; that includes the acres occupied by crops that are not insurable or have limited programs available. For corn, coverage in 2011 was 72 percent of planted acres, soybeans 71 percent, sugar beets 83 percent, and dry beans 79 percent. Yet, only 6 percent of forage crop acreage was covered.

Continues on Page 6...

Fall 2012

PARTNERS 2

MARKET OUTLOOK

Market Outlook By: Bob Utterback Combines throughout the entire Midwest are running full steam now harvesting a significantly reduced crop. Many expect the crop will continue to shrink as the ravages of this year’s drought are finally realized with lower levels in the bin. A nationwide corn yield below 120 and a soybean yield below 35 are now generally expected.

There is another big issue on the supply side that will need to be resolved: How many acres will be harvested? I believe at least 1.25 million and perhaps as high as 2.5 million corn harvested acres if disease problems increase, while limited reduction in soybean harvested acres is expected.

SUMMARY: The supply bull should be more or less fully known shortly after you read this Outlook. This implies the market then turns very quickly back to how fast demand can be rationed, and the status of the South American crop.

If you thought supply figures were hard to determine, I believe the demand side of the equation is many times more difficult.

I have observed that demand is usually rationed “after” an event, but it is very difficult to realize “during” an event.

As we move into 2013, all I know is the best cure for high prices is high prices and eventually short crops will have very long tails. The prospects for the next six months for grains could be historic if grain prices continue to surge higher due to (1) continued concern about next year’s weather, (2)

3

PARTNERS Fall 2012

stronger than anticipated demand and (3) some continued Federal quantitative easing that could push up core inflation expectations. The impact on end users could be devastating; it will not only ration usage, but destroy it! Unpriced grain producers should be wary of wishing for higher prices. In my opinion, if they get it, the responsibility of protecting longterm profits will become their problem, not the government’s problem.

CORN: In my opinion, those who plan to store 2012 inventory until next summer for basis narrowing should move contracts forward “sooner” rather than later. With the tight supply situation, the nearby contract could very well stay premium to the deferred contracts well into the summer of 2013. Get the contracts rolled.

This leads to the next really big question: Do producers store corn when there is no carry in the market? With the nearby contract premium and firm basis, the market is telling everyone that it wants the crop now. If anyone stores, I

MARKET OUTLOOK

REMEMBER, IF WE ASSUME A NORMAL WEATHER YEAR AND MORE THAN 98 MILLION PLANTED ACRES, I BELIEVE THERE IS A RISK THAT, BY THE FALL OF 2013, Next spring I believe producers should focus on taking out the crop insurance plan that best assures yield. Then use the markets CASH MARKET PRICES COULD to lock up their selling price, but with flexibility to adjust.

BE DANGEROUSLY CLOSE TO Both forward cash sales and futures contracts are too rigid of COST OF PRODUCTION. a tool to use in a market that will be extremely sensitive next believe they are taking all the flat price risk. I suggest moving inventory and re-owning it in the July 2013 call. Spend about what would be spent on total storage, as well as some risk premium. I suggest at least 4 cents storage cost and up to 6 cents risk premium or about 10 cents a month associated with the total cost of storing to next July. For nine months it could amount to 90 cents. This would buy a July $7.50 in-themoney call that would put them in exactly the same position as a cash position in the bin minus any future basis gain.

The big issue is what to do about the expected 2013 and 2014 crops. Remember, if we assume a normal weather year and more than 98 million planted acres, I believe there is a risk that, by the fall of 2013, cash market prices could be dangerously close to cost of production. With the market possibly offering in the next couple of months close to $2 over total costs, I think something should be done...but what?

Push the pencil and come up with a target price. I expect a 190 bushel corn producer with close to $920 total costs per acre to end up with about $4.84 per bushel before basis adjustment and marketing costs are figured in. If September 2013 corn is around $6.80, I feel the market is offering producers in excess of a 40 percent return on investment before basis and marketing costs are taken into consideration.

I suggest this is worth fighting for.

spring to any weather developments. This leaves options as the primary selling tool. Before you say it, I admit options are expensive and hard to understand. The reason why many producers lose is they buy cheap at-the-money puts that have a lot of time value cost. If the market takes time to develop and move in their direction, the loss of time value can be greater than the flat price benefit.

I see three ways to overcome this weakness: (1) Buy extremely deep-in-the-money puts that become a futures position. Think of it as pre-buying the maximum margin call on day one rather than later on. By doing this time value, cost can be significantly reduced. (2) Those who want to be more aggressive might consider selling nearby deep-out-of-the-money puts equal to the expected time value cost for the deferred long puts bought.

(3) Plan to roll up the puts when they can be moved up to a higher strike price and gain a dollar for every dollar spent.

SOYBEANS: Old crop soybean stocks are actually tighter than corn. I am inclined to sit on any remaining old crop supply at least until November/December when we start to get some strong indications of how the South American crop will fare. Since the soybean market is at record highs already, it is difficult to get significantly more bullish; but trade talk is very strong that a cash price in excess of $20 is a distinct possibility if yields decline below 35 bushels per acre and any type of concern develops in South America.

Fall 2012

PARTNERS 4

MARKET OUTLOOK

OVER THE NEXT FEW MONTHS THE CASH MARKET SHOULD BE UNDER A LOT OF CASH PRESSURE DUE TO HERD LIQUIDATION; BUT ONCE WE GET INTO THE SECOND QUARTER OF 2013, PRICES COULD IGNITE. THUS, Subsequently, I expect acres will be up I SUGGEST DOWNSIDE and the July 2013 will have difficulty PRICE PROTECTION IS moving above $9. Therefore, with prices at $8.60 (as I write this article), NEEDED FOR ALL I suggest it is time for producers to LIVESTOCK PRODUCERS start locking up a floor; and still allow flexibility to improve the bottom line if THROUGH DECEMBER weather problems develop. Here again, OF THIS YEAR. buying deep-in-the-money July puts and As for anticipated 2013 selling, in theory it will be like the corn strategy above.

The only problem is I see is November 2013 having to move up significantly to compete with corn, especially if anyone is a high yield corn producer. Therefore, until November soybeans gets closer to $14, hold off on aggressive pricing; but once buying starts, in-the-money puts are still strongly desired over a cash or futures selling strategy for 2013 because of all the uncertainty associated with weather.

WHEAT: Any wheat producer who still has his old crop in the bin has really hit a home run. Wheat could possibly be pulled up by the corn market all the way to next spring. Some of the leading world wheat producers (like Russia) are having some production problems which is also helping prices. Old crop wheat may take the lead from corn. Do not allow December 2012 corn to close below $7.80 without having some type of pricing in place.

Next year’s selling plan will likely be a real challenge for many wheat producers.

If there is continued weather concern, the lid will come off the wheat market; but good moisture conditions should entice major acreage expansion this fall.

I believe $8.50 wheat and $13.50 double-crop soybeans can be a serious competitor of corn. Those areas that can double-crop have experienced extreme drought stress on the corn crop this year.

5

PARTNERS Fall 2012

selling deep-out-of-the-money nearby puts to offset time value cost is strongly urged immediately for all of next year’s expected production that producers plan to sell next year.

LIVESTOCK: All end users, especially livestock producers, are being hit hard by higher grain values. While it appears many are still feeding the last part of last year’s lower priced grain, I believe they will face $8+ corn and $500+ soybean meal and that can mean a lot of red ink.

The big questions: How fast? Who will liquidate the most in regards to beef, dairy, pork and chicken production? I expect poultry and turkey production can reduce the fastest, and ramp up just as fast. Dairy and beef producers are expected to be the slowest to liquidate because it is extremely difficult to repopulate a herd after downsizing.

Essentially, I fear we are not going to simply ration usage in the livestock sector; it could be destroyed.

Therefore, over the next few months the cash market should be under a lot of cash pressure due to herd liquidation; but once we get into the second quarter of 2013, prices could ignite. Thus, I suggest downside price protection is needed for all livestock producers through December of this year.

The real risk, however, is on the feed side of the equation. Not only is the flat price going to be excessively high, but basis levels could be abnormally strong

because of the shortage of “good” quality grain. (1) Try to get physical control of all feed needs desired for the anticipated 2013 production locked up as soon as possible. If this is not practical, the only alternative I see is buying protection in the futures. Focus on lead month December corn below $7.95 to $7.80, and plan to buy if it goes above $8.18.

It will be more difficult for soybean meal to correct to levels where livestock producers want to buy it. While I know many want to get it under $480, I think it will be extremely difficult. I suggest getting at least three months locked up around $500 then wait until December and see how South America is doing.

If it is OK, move hand-to-mouth; but if any problems develop, I feel it is necessary to get inventory locked up clear to August.

SUMMARY: This year (2012) will be in the record books, reminding us that, regardless of our technology, Mother Nature is still king of the hill when it comes to yield risk potential.

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 agricultural 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 www.utterbackmarketing.com 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 utterback@utterbackmarketing.com. he opinions stated herein are not necessarily T those of GreenStone Farm Credit Services.

CEO COMMENTS

...CEO Comments continued Third, we continue to be in a record low interest rate environment which will keep borrowing costs low for producers who may have to extend the repayment of operating losses over a 3-5 year time frame.

Fourth, crop prices are projected to remain strong over the next several months and even into next year which will help generate higher margins on the crops producers are able to harvest.

pre-qualify them for this program. Hopefully, by starting early, customers will find us well positioned to provide knowledge and reasonable turn-around times on the applications. Please find a few additional details about this program in the article on Page 8.

In general, we are confident that the large majority of our customers will emerge from this year’s weather crises somewhat “bruised” but not “down for the count.”

GreenStone stands ready to lend a helping hand to those that need it in these difficult times. If you are concerned about your operation’s financial situation, I urge you to contact your local financial services officer as soon as possible to begin developing an individualized recovery plan. The quicker we can get a plan in place, the sooner you can get back to doing what you do best…producing the safest, most affordable, and dependable food supply in the world!

And finally, there will likely be several assistance programs available for eligible producers through state and federal agencies to help sustain them through this difficult period.

In fact, the State of Michigan introduced the Agricultural Disaster Loan Origination Program Act of 2012 (Disaster Loan Program) in early June for fruit producers. Once the Michigan Legislature appropriates funding for the program (which has not occurred as of my writing these comments), GreenStone, along with other participating commercial banks, will be ready to administer the program to eligible THE 2012 CUSTOMER producers this fall.

2012 Customer Satisfaction Survey Results SATISFACTION SURVEY I want to take this opportunity to Unfortunately, there are segments thank you again for your vote of RESULTS ARE IN AND I AM of the industry that will likely confidence in the level of service be “squeezed” more than others PLEASED TO ANNOUNCE GreenStone provides you. The as a result of this year’s weather THAT YOU RATED US AT 97 2012 Customer Satisfaction Survey anomalies, including livestock results are in and I am pleased to PERCENT VERY SATISFIED and those fruit operations where announce that you rated us at 97 crop insurance was not available.

OR SATISFIED. THIS IS AN percent very satisfied or satisfied.

Any operation that has livestock ALL-TIME RECORD SINCE This is an all-time record since the to feed will be challenged to formation of GreenStone in 2000. manage positive margins between THE FORMATION OF We are humbled by these results now and next year’s harvest. High GREENSTONE IN 2000. and can assure you that we will not feed prices and availability will take them for granted. Performance likely erode profitability unless like this is only possible because of protein prices can recover to offthe efforts of our dedicated and professional staff members set the high cost of feed. Again, based on our analysis, most who go out of their way day in and day out to put you, the of the protein producers in our territory should be “O.K.” customer, first! I encourage you to read more about these Many of them grow their own feed and carry crop insurance world class results on Page 8 of this issue. on it. Some also had surplus feed inventories from last year that will help off-set reduced yields this year. And, most have Again, thank you for your confidence! We look forward to the equity necessary to borrow any funds they may need to exceeding your expectations again in 2013 and beyond. buy feed, albeit at higher prices, to see them through.

Board Elections Fruit growers, primarily tart cherries and to some degree The Teller’s Committee met on Thursday, June 14 and sweets, will likely have fewer options as crop insurance is not announced the Board of Directors election results for three available. They will need to rely on their individual balance of GreenStone’s voting regions. Christine Crumbaugh, from sheet strength and any possible government programs St. Louis, Michigan, and Andy Snider, from Hart, Michigan, (including the Disaster Loan Program noted above) to assist now represent Region V. Laura Braun, from Ovid, Michigan, them through this difficult time. and incumbent Cathy Webster, from Elsie, Michigan, were elected in Region VI. Region VII is now represented by As in 1986 and 2002, GreenStone will undoubtedly Dale Wagner, from Manitowoc, Wisconsin, and incumbent administer 85 percent or more of the State of Michigan’s Raymond Diederich, from De Pere, Wisconsin. A more 2012 Disaster Loan Program. We have been working personal perspective from the four new board members can diligently to meet with affected fruit customers since early this summer to determine their individual situations and be found on Page 19.

Fall 2012

PARTNERS 6

CEO COMMENTS

With the addition of the new board members, we thank the four outgoing directors. Frank Engler, of Mt. Pleasant, Michigan, represented Regional V for 18 years, serving most recently as the chairman of GreenStone’s Board of Directors.

Brent Wilson, also from Region V in Carson City, Michigan, served on the board for 20 years. Brian Haskin of Region VI from Sunfield, Michigan, was a board member for six years; and David Rakowski representing Region VII from Pound, Wisconsin, served on the board for 28 years, including through the merger with northeast Wisconsin.

These director election results represent a 25 percent turnover in the board’s representation, which has not happened in more than a decade. From my perspective, GreenStone is fortunate to have such a great reservoir of talented members who are willing to give of their time to serve the organization. I am very impressed with the focus, knowledge, and genuine concern each of these new board members bring to our organization.

Of course, this in no way is meant to detract from the excellent leadership provided by the incumbents. However, it does point out why it is important to always have high quality individuals on the ballot; no matter what, GreenStone wins! So, join me in welcoming our newest board members and thanking Frank Engler, Brent Wilson, Dave Rakowski and Brian Haskin for their 72 combined years of service to

GreenStone including two of its predecessor organizations as well.

For those of us who have been in agriculture for any length of time, we know this year will join the long list of challenging times we have documented over the years.

But, what always impresses me about times like this is the resilience of the American farmer. No matter what happens, whether it’s too little or too much rain, insect infestations, government regulation, or volatile market swings, most producers not only survive these ups and downs, but thrive!

It is likely too early to know exactly how 2012 will officially go down in the record books, but one thing is certain, GreenStone will be here to assist its members in good times and bad with a dependable, competitive, and responsible source of credit and financial services to meet your needs.

Feel free to contact me directly at 517-318-4105 or dave.armstrong@greenstonefcs.com if I can ever be of assistance. Best wishes for a safe and productive harvest!

Dave Armstrong

Fall Candid Comments...

GreenStone FCS,

GreenStone FCS,

On behalf of Michigan’s 4-H youth and volunteers, thank you for your gift to the Michigan 4-H Foundation to support 4-H’s area of greatest need.

We really appreciate your dedication to helping 4-H’ers!

Thanks to everyone on the GreenStone (Cadillac) team for the quick turn around on this. In all my years of working with financial institutions I have had a range of experiences, but you folks take customer service to a new level and will surely be on the top of my list for future referrals and for my own needs.

GreenStone FCS, Prompt. Professional. Kind. Those three words describe our experience with GreenStone.

—- Greg Christian Sturgeon Bay, Wisconsin

7

PARTNERS Fall 2012

—Jim Baker

Continues on page 12...

NEWS UPDATE

NEWS UPDATE FALL 2012 GreenStone Sets Customer Satisfaction Record GreenStone has earned a record 97 percent customer satisfaction rating for the first time in the cooperative’s more than 95-year history.

“Every GreenStone staff member makes customer service their number one priority, and I believe the results of this survey help validate that,” said GreenStone president and CEO, Dave Armstrong. “We put a tremendous amount of time and effort into getting to know each of our customers and providing them with lending and financial services options tailored to their individual needs. As a result, we have consistently experienced superior ratings since we began the customer satisfaction survey in 2000.”

Customers randomly chosen from throughout Michigan and northeast Wisconsin participated in the survey conducted by an outside agency. Members indicated they were most satisfied with clerical staff performance and the financial soundness of the cooperative, as well as the value GreenStone has for its customers, and the organization’s flexibility and understanding of agricultural businesses. The survey also showed that 93 percent of those surveyed would return to GreenStone for their future lending needs.

Contributing to the cooperative’s overall satisfaction rate were the high marks received by GreenStone’s 37 branch locations.

Individual branch satisfaction rates reached as high as 100 percent.

“Our branch offices are the face of GreenStone and the service that they offer to our members is critical to continuing to maintain high customer satisfaction ratings,” said Armstrong.

“We are fortunate to have a workforce comprised of individuals who are passionate about agriculture, country living, and providing quality service to our customers.”

The 97 percent satisfaction rating achieved by GreenStone surpassed the cooperatives previous best rating of 95 percent set in 2011. A random selection of members from GreenStone’s traditional, country living, and commercial customer segments participated in the survey.

Disaster Relief Program Update GreenStone is proud to be a major supplier of loans under the Agricultural Disaster Loan Origination Program Act of 2012 for the State of Michigan.

The program was developed to assist fruit producers and processors devastated by the harsh weather experienced throughout Michigan earlier this spring.

Being a member-owned cooperative makes it a simple decision to go the extra mile to assure our members have the lowest cost of capital possible.

Thanks to the work of many staff who have focused on this initiative over the last few months, we are ready to deliver funds to producers once the State of Michigan appropriates funds. Though this was expected to occur in September, the Legislature had yet to take action as of the printing of this publication.

For updates on funding appropriations, program eligibility and to learn how to apply, please contact your local GreenStone office or visit our website, www.greenstonefcs.com.

GreenStone is pleased to be able to assist our producers by providing this lowinterest loan program in cooperation with the State of Michigan. We look forward to working with you to not only determine your eligibility in this program, but also to assist in working through an individualized plan for your operation to recover from the 2012 crop disaster.

Fall 2012

PARTNERS 8

NEWS UPDATE

GreenStone Sponsors Miracle of Life Pavilion at the U.P. State Fair As part of a multi-year sponsorship agreement, GreenStone has been named a building sponsor for the newly constructed Miracle of Life Educational Pavilion at Michigan's U.P. State Fair.

"Sponsorship of the Miracle of Life Educational Pavilion is another example of GreenStone’s distinguished reputation for supporting agricultural education,” said Vickie Micheau, executive director, Delta County Chamber of Commerce, managing agent of the U.P. State Fair. “We look forward to collaborating with GreenStone in the future on ways to enhance and expand educational exhibits and events within the pavilion."

piglets, and see chick, duck and quail eggs hatch. The Growing UP Foresters exhibit will allow patrons to walk through a handson display about the many wonders of forest ecosystems, emphasizing the many ways trees and their products enhance our lives. At the edge of the forest is an interactive exhibit about the importance of farming and agriculture in the state of Michigan.

2012 marks the 25th consecutive year that GreenStone has partnered with the U.P. State Fair. Beyond financial support, beginning in 1987, GreenStone’s Escanaba branch staff have spent each fair week at the Michigan State University Extension office judging all of the market animals record books.

The Miracle of Life Educational Pavilion features more than 21,000 square feet, and will serve as the permanent home for the Miracle of Life and the Growing UP Foresters exhibits.

GreenStone has signage present on the interior and exterior of the building.

As part of the Miracle of Life exhibit, fairgoers will have the opportunity to witness the live births of calves, lambs and

Stec Named Senior Vice President of Sales and Customer Relations Randy Stec was recently named senior vice president of sales and customer relations for GreenStone.

In his new role, Stec oversees sales and support of all of GreenStone’s products and services at each of the organization’s 37 branch

9

PARTNERS Fall 2012

offices. He also works with staff to explore the marketplace for new business opportunities in both the traditional agricultural market and the country living segment served by the cooperative. Additionally, he will be charged with maintaining the high level of customer satisfaction currently experienced by GreenStone customers.

Stec, who began his career as a financial services officer, has held a variety of positions with GreenStone during his 30-plus year tenure. He most recently served as regional vice president of sales and customer relations overseeing GreenStone’s eastern Michigan branches.

A Michigan native, Stec attended Ferris State University earning a Bachelor

Above: Fair supporters, including GreenStone representatives, prepare to cut the ribbon at the grand opening of the pavilion just before the 2012 U.P. State Fair opened its gates.

of Science degree in accounting. He also attended the Graduate School of Banking at the University of Wisconsin– Madison.

Stec, an avid water fowl hunter and walleye fisherman, is active in his local community. He is a former member of the Tuscola County Economic Development board, past board chairman of Tuscola County Ducks Unlimited,

and currently serves on the Tuscola County Community Foundation board of trustees.

Stec resides in Tuscola County, Michigan with his wife, Rebecca.

On the Move…

GreenStone’s Howell branch recently moved! The new branch is located at 1040 West Highland in Howell, Michigan. Stop by and say hello to the branch staff and tour the new office!

BUCK POLE CONTEST

buck which sported a 20 inch inside spread! Congratulations to Phillip on the great deer!

Buck Pole Contests It’s fall, and that means deer hunting season is upon us.

Take advantage of one of these GreenStone sponsored buck poles to show off your success!

Q1 Buck Pole – Michigan Now in its 12th year, the Q1 Buck Pole is acclaimed as Michigan's biggest and best buck pole contest.

Win a Yamaha Grizzly 350 Camo ATV, a Manitoba Whitetail hunt, muzzleloaders, bows, hunting trips and more. Register your deer (bucks and does) in the Q1 Buck Pole for your chance to win these and many other fabulous prizes.

It is free to enter, just stop by any one of GreenStone’s Michigan branches to register your deer this hunting season. Like many poles, prizes are given to the top bucks, but all deer are eligible to win the ATV and many other prizes in random drawings at the Q1 Buck Pole prize parties. The regional party dates will be announced soon, but you can mark your calendar for March 2, 2013 when the final Q1 Buck Pole prize party will be held at the Soaring Eagle Casino in Mt. Pleasant, Michigan. Everyone is welcome to come see the bucks on display, win prizes and take advantage of the sponsor deals and interaction.

are registered as another chance to win the ATV, prizes and hunting trips.

Stop by any of GreenStone's Michigan branches to get registered.

Go online for more information, www.q1buckpole.com, where you can also view the entries and buck photos, and get entered for a chance to win a Manitoba Whitetail hunt!

Northeast Wisconsin and Michigan’s Upper Peninsula Big Buck Contest Last year was the inaugural year for GreenStone’s own Big Buck Contest in northeast Wisconsin. Focused on our members, we enjoyed sharing in the hunting success of our customers. One such story came from the 2011 winner, Phillip Konitzer, who harvested a 14 point

We had such positive feedback in 2011, we’re thrilled to expand the 2012 Big Buck Contest to include hunters from Michigan’s Upper Peninsula. We have also opened the contest to not only current customers, but to all hunters in the northeast Wisconsin and Michigan Upper Peninsula area.

Scoring rules include the combination of total number of points over one inch added to the width in inches of the inside spread of the main beams. The bucks with the highest scores will be eligible for cash prizes totaling more than $2,500!

GreenStone’s 2012 Big Buck Contest also includes a Junior Big Buck Contest for hunters 17 years old and younger. It could really pay to bring your son, daughter, or grandchild hunting with you!

Spread the word and share the contest information with your friends, family, and fellow hunters.

More information will be available on our website this fall, www.greenstonefcs.com, or call one of the following participating branches: Appleton, Clintonville, Coleman, De Pere, Escanaba, Manitowoc, and Sturgeon Bay. Good luck hunting!

Bucks are scored by the number of points on each beam, the mass at the base of each beam, the inside spread and the longest tine. Does

Fall 2012

PARTNERS 10

SCHOLARSHIPS

Scholarship Recipients

A

School is back in session and GreenStone has awarded several incoming freshmen at Michigan State University and the University of Wisconsin with a $2,000 scholarship for the fall semester. Each student was awarded the scholarship based on their academic performance, extracurricular activities and interest in a career in agriculture.

[C] BRANDON FRAHM

Son of Chad and Gina Blasher of Belding, Michigan

Son of Charlie and Sally Frahm of Frankenmuth, Michigan

[E] JAMES LUOMA

Attending: Michigan State University

Attending: Michigan State University

Dream Job: Owning a feed lot for cattle and to raise corn and soybeans.

Majoring in: Agriculture

Majoring in: Animal Science –Pre Vet Medicine

He is most excited about college because: “I get to meet new people.”

He is most excited about college because: “It is a new experience and a great way to meet new people.”

Attending: Michigan State University Majoring in: AgriBusiness

[B] SAMANTHA COLOMBO Daughter of Gina ColomboViaene and Joseph Viaene of Casco, Michigan Attending: Michigan State University Majoring in: Beef Cattle Management; Nutrition Dream Job: Finding a market beef job and working for Purina in the cattle department.

She is most excited about college because: “To start my future in the beef cattle industry and make a name for myself.”

11

B

[A] BENJAMEN BLASHER

PARTNERS Fall 2012

Dream Job: Professional Athlete

Son of Jim Luoma and Lori Laing

Dream Job: Owning a vet clinic.

Son of Denny and Dawn Hall of Belding, Michigan

He is most excited about college because: “I want to meet new people. I also want to take a step towards my goal of becoming a vet and education is important to doing that.”

Attending: Michigan State University

[F] MATTHIAS OLSON

Majoring in: Agriculture; AgriBusiness

Son of Rich and Shelly Olson of Sturgeon Bay, Wisconsin

Dream Job: Managerial position at a local agriculture company.

Attending: University of Wisconsin – Madison

He is most excited about college because: “For a new adventure and to continue learning about what I love to do – agriculture.”

Majoring in: Life Science Communications; Ag/ Applied Economics

[D] JACOB HALL

C

D

E

Dream Job: Review critic/ writer for paradise islands.

He is most excited about college because: “I have season tickets for Badger football games.”

F

NEWS UPDATE

GreenStone Employees Support Youth Fundraiser GreenStone employees recently participated in a fundraiser to benefit the Michigan Livestock Expo and Wisconsin FFA Foundation. In total, GreenStone employees contributed more than $4,800 to these two organizations.

The Wisconsin FFA Foundation has set a fundraiser goal of $400,000 for 201213 and GreenStone’s donation will go towards making this goal a reality. To learn more about the Wisconsin FFA Foundation or to make a donation, visit www.wisconsinffafoundation.org.

Donations made to the Michigan Livestock Expo enabled the employees to participate in the purchase of several animals during the Expo's annual Saleabration: Showcase Market Hog Ben Littlefield Burr Oak, Michigan

Below: GreenStone employees pose with Ben Littlefield and his showcase market hog.

Showcase Market Lamb Sarah Kennedy Saranac, Michigan Showcase Market Steer Mike Hewitt Petersburg, Michigan Showcase Market Steer Cassandra King Casco, Michigan As a company, GreenStone also patricipated in the purchase of Cassandra King's market steer, as well as these two lots: Grand Champion Market Goat Caitlyn Hines Quincy, Michigan Reserve Grand Champion Market Goat Kimberly Doneth Durand, Michigan

Ballman Promoted to Regional Vice President of Sales and Customer Relations Dave Ballman has been promoted to regional vice president of sales and customer relations for GreenStone, and will oversee four of the cooperative’s branches in eastern Michigan.

In his new position, Ballman will serve as the leader of the financial services officers, crop insurance agents and financial services staff in the Bad Axe, Bay City, Caro and Sandusky offices. He will be responsible for the guidance and development of this sales team.

Ballman began his GreenStone career in 2007 as a financial services officer based in the association’s Lapeer, Michigan branch. Prior to joining GreenStone, he worked as a district sales manager for FritoLay in the Detroit area.

Ballman earned his Master of Business Administration degree from Baker College in 2003. Prior to that, he attended Michigan State University and graduated with a Bachelor of Arts degree in business administration.

Ballman resides in Lapeer, Michigan with his wife Kari and their two children. He enjoys spending spare time with his family and participating in many outdoor recreational activities.

Candid comments continued...

GreenStone recently sponsored a trip for several FFA students to attend the Washington Leadership Conference. Below are snapshots from some of the thank you notes we received. …Thank you for your contribution that made it possible for me to visit Washington, D.C. Without your support of FFA or your commitment to the agricultural education of youth, I would not have been able to make the trip…

— Rebecca Flynn, BACC FFA Treasurer Thank you so much for sponsoring Washington Leadership Conference. … I learned so much about leadership and service and I will never forget all the friends I made…

— Amanda Higbee Thank you for sponsoring the 2012 Washington Leadership Conference. The skills that I learned in D.C. will help me during the rest of my life.

— Nate Frahm, Caledonia FFA

Fall 2012

PARTNERS 12

YBSF FEATURE

IT ALL STAR WITH A CHAINSAW

By Jennifer Vincent

It has happened more than once. Prospective business clients will ask Mike Sturgill if they should talk to his dad.

At age 35, they assume he is working with his father in partnership or is in the process of taking over the business.

O

n the contrary.

Sturgill, through wise financial management, hard work and good decision making, established his own business, Precision Forestry Inc., at the age of 29.

Today, the logging business is a multi-million dollar enterprise that serves the entire state and continues to grow. That’s an especially impressive feat for Sturgill when you consider he started with nothing but a chainsaw.

To say he had meager beginnings would be an understatement. Sturgill came from a challenged family, both financially and emotionally. His parents divorced when he was four.

As a teenager, Sturgill was living with his mother in an apartment in Onaway, a small town nestled in northeast Lower Michigan. When she relocated downstate, Sturgill had a decision to make. Despite being an all A student and obtaining a perfect score on the Michigan

13

PARTNERS Fall 2012

RTED

W Educational Assessment Program test, he quit school in the eighth grade at the age of 15. “I didn’t want to go downstate, and I decided to stay back,” he says. “I had to find a way to make a living.”

Sturgill turned to what was familiar.

Since he was old enough to safely handle a chainsaw, he was cutting firewood.

He landed a job with a log company and for two years he worked cutting down trees, removing limbs and sizing logs. That led to a job with a sawmill for a year. When he turned 18, he was old enough to drive a log truck and he found work with two different logging companies. “After about the fourth year of driving truck for Rust Wood Products in Hillman, Michigan. I started working in the woods with commercial equipment,” Sturgill says. “I got to know every aspect of the business. That’s when I started thinking about possibly going out on my own.”

To take a step forward, he would have to take a step back. The house he had worked so hard to pay off was remortgaged to buy a truck and trailer. Sturgill worked ten-hour work days for Rust and then hauled wood for several others at night. He also bought a couple of houses and flipped them. With the money he saved, another refinance on his house, and a loan from the local credit union, Sturgill bought a fully-automated harvester and a forwarder, which picks up harvested logs and transports them to a loading area. These were not new machines, but ones he had researched and sought out through various contacts and online.

Branching Out In 2005, with a truck and trailer, a harvester and a forwarder, Sturgill had what he calls a ‘crew’. With one employee he had the minimum to take on a complete job. “I did a lot of subcontracting at first,” he says. “I knew I would have to prove myself as

"I OWE A BIG PART OF MY SUCCESS TO GREENSTONE...

THE BANK WOULD NEVER HAVE LOANED ME THAT MUCH MONEY.” a viable contractor, businessman and logger.”

He secured his first outright contract —45 acres of red pine just north of Atlanta­—about five months after purchasing the equipment.

Shortly thereafter came his first big test. The State of Michigan was taking bids on 12,000 cords of timber near Pigeon River. “I put in a bid for $1,045,000,” Sturgill says. “Yes, I was really nervous, but I also knew this was my chance to really establish myself.”

Sturgill got the bid, edging out the second highest bidder by $17,000.

“That’s really pretty good when you’re talking those numbers,” he says.

Fall 2012

PARTNERS 14

YBSF FEATURE

The state allowed four years for the job to be done in blocks with $100,000 payments. Sturgill worked on the job four months out of the year for three years – completing it a year early, partly because he was able to acquire financing through GreenStone to buy more equipment.

“I’d add a new crew every year or so,” Sturgill says. “I owe a big part of my success to GreenStone. They came recommended by an equipment dealer and several others. They have low interest rates, want to work with rural customers, and I was able to borrow the money I needed to buy equipment. The bank would never have loaned me that much money.”

Sturgill’s girlfriend, Billie Morell, takes care of the books and uses Quick Books. “I then send the information off to Yvonne Fleis, who is our GreenStone CPA and she then enters everything into AgManager,” Morell explains. “The reports I have reviewed are very detailed and organized. I get a

> LOGGING FACT The United States is the world’s leading producer and consumer of forest products and accounts for about one-fourth of the world’s production and consumption.

Right: Mike Sturgill and this crew of Eric Domkey and Billy Boughner were busy clear cutting aspen and thinning red pine and hardwoods on a 40-acre parcel in Crossvillage, Michigan. On this job, Domkey, a six-year employee, was running the harvester while Boughner, three-year employee, was busy in the forwarder. The aspen are generally sold for particle board, while the red pine is mostly used for construction lumber.

Hardwoods are used for cabinetry, flooring and other furnishings. The harvester, which costs about a half million dollars new, uses hydraulics, chains and saw blades to get the job done in a matter of minutes.

15

PARTNERS Fall 2012

hard copy monthly from her. It really keeps good communication between us, which is especially important because they are our primary lending source.”

Sturgill reads a lot and does his research on what equipment works the best and is also the best financial investment. It wasn’t until 2009 Right: The harvester clinches the tree while it saws it off and then turns it horizontal to shear off the limbs and cut the logs into designated lengths.

when he bought his first new piece of equipment. “Sure, there’s better equipment than mine, but is it worth another $175,000,” he says. “You also have to look at how operator friendly it is and if you can maintain it. I would much rather pay my mechanic than pay someone from John Deere five times my hourly rate.”

YBSF FEATURE

One of his biggest challenges is EPA regulations on equipment and trucks with diesel engines. “They have become increasingly stringent. I have spent upwards of $20,000 to be in compliance. The change to ultra-low sulfur has increased the complexity of the machines, which means there’s more to fix and the cost of fuel is higher with less BTUs.”

"I STRONGLY BELIEVE IN DOING A GOOD JOB AT A FAIR PRICE AND HONORING COMMITMENTS, BOTH BEFORE AND AFTER THE JOB.”

Where are they now: Lutke Forest Products In the Winter 2006 issue of Partners, we featured Lutke Forest Products located in Manton, Michigan. At that time, the operation was averaging production of 50,000– 70,000 cords of wood and $9 - $11 million in gross annual sales. We recently had a chance to visit with proprietor Jason Lutke and learned how his operation has changed over the last six years.

With a diesel fuel bill of about $100,000 a month, Sturgill checks crude oil prices several times a day. A couple of cents can quickly turn into a $500 profit or loss.

Room to Grow At 35, Sturgill still has plenty of time to grow his business, but that does not mean he will abandon his focus on leanness and efficiency. “We cut about 60,000 cords a year, and I know I have to make good decisions on where to go—where there is the biggest profit margin.

We don’t want to work just to work,” he says. “I also keep a tight crew. There are no foremans—that’s me. And, my girlfriend, Billie Morell, takes care of the books.”

Sturgill is the foreman, but he is still very hands on, driving truck a couple times a week and running equipment. “But, not as much as I used to,” he adds.

As Sturgill formed relationships with consulting foresters and saw mills, Precision Forestry Inc. became a year-round enterprise. “It’s actually easier in the winter because everything is frozen,” he says. “The limbs just snap off, and we’re also able to cut in low ground without getting stuck.”

Now, with 25 employees that make up five processing crews, two chip crews and truck drivers, Sturgill bids on 15 to 20 jobs a month and wins about 15 percent.

How has your business changed since 2006?

Towards the end of 2007 or beginning of 2008, we opened Lutke Hydraulics to help other loggers in the area keep maintenance costs down. We started with one employee and hired a second worker in 2011. Also in 2011, we opened Lutke Equipment which allows us to sell equipment around the state of Michigan and the United States.

We now run 10 crews with 43 semi-trucks. We have grown from 27 employees to 65 employees including a shop superintendent and two mechanics on day shift and two on the night shift. We also have three other full-time employees in the equipment shop which has allowed us to perform all of the maintenance on our fleet of equipment providing a substantial cost savings.

Our sales have also grown since 2006. We now average 125,000 cords of wood each year and $14.5 - $16 million in gross annual sales.

What has allowed your operation to be successful in a changing market?

“I strongly believe in doing a good job at a fair price and honoring commitments, both before and after the job.

I will do what I promised and to the satisfaction of the landowner,” he says.

Staying diversified in this day and age is the key to success. Also, having employees that keep an open mind is important and allows you to move them from one job to another easily.

The only regret, Sturgill wishes he’d had more time with his two sons when they were younger. Tyler, 15, and Andrew, 12, currently share their dad’s passion for racing open-wheel, modified cars. Time will tell if they will also pursue his love of forestry.

What is next for your operation?

We are going to continue working hard and adapt to the ever-changing marketplace.

Fall 2012

PARTNERS 16

GOVERNMENT RELATIONS UPDATE

The Political Tools of the Trade GreenStone members face many challenges in their business and family operations, and within their rural communities. Every day we are reminded through one anecdote or another how important it is to build successful agricultural practices and products for all of our communities.

GreenStone is extremely proud of the members it serves, and is honored to play a role as their choice for financial services in this challenging environment.

Part of the challenges can be working through the legislative, regulatory and public policy issues from time to time. Well intentioned policies or legislation can often interfere with positive productive results for the overall good of the industry. The GreenStone Board of Directors and association management maintain an eye on legislative, regulatory and public policy issues cooperatively with other associations and friends of agriculture to assure the overall interests of agriculture and rural interests are not diminished.

Specific tools have been established to accomplish this which includes the Legislative/ Public Policy Committee of the Board of Directors, the Agriculture Leaders of Michigan, and the Farm Credit Council (FCC). In addition, GreenStone participates in two separate political action committees: 17

PARTNERS Fall 2012

Farm Credit Counsel PAC (federal issues and legislators with participation from GreenStone directors and employees), and MI GreenStone PAC (state issues and legislators with participation from GreenStone directors, employees and member/stockholders).

This multi-functional toolbox acts as the primary means for educating policy makers and legislators regarding important agricultural issues, and their impact on the Farm Credit System (FCS) and its members.

Recently, issues relating to tax, animal agricultural and rural infrastructure have led the way, along with maintaining awareness of the importance of the FCS as the primary source of dependable and competitive financial services for rural America. It is anticipated that these tools will remain a staple to protect your membership interests with GreenStone, including current important issues like the Farm Bill.

The FCC, the national trade association representing the FCS, has joined forces with a broad coalition of the nation’s foremost agricultural organizations in an

effort to raise public awareness of the need for Congress to pass a new, comprehensive, five-year farm bill before it expired in September. GreenStone actively participated in the effort to create a higher level of awareness.

Though the expiration date has past, if appropriate action has not yet been taken on the Farm Bill, you could still visit the FCC’s Legislative Action Center, www.capwiz.com/fcc, to direct a writing of your own to urge your members of Congress to put a comprehensive, five-year farm bill in place as soon as possible.

In addition, Farm Bill Now launched an interactive web portal at www.FarmBillNow.com, through which visitors to the site can connect to their members of Congress and show their support for a new five-year farm bill.

Using messages to Congress via social media, event locations and times, and an online petition, FarmBillNow.com gives both farmers and consumers the resources needed to make their voices heard prior to the deadline, and for whatever additional follow-up actions may be necessary.

HARVEST GATHERING

GreenStone Helps Kickoff 2012 Michigan Harvest Gathering GreenStone helped kickoff the 2012 Michigan Harvest Gathering on the steps of the state Capitol in Lansing, Michigan on Thursday, September 13 marking the 12th consecutive year GreenStone has been a sponsor of the event.

food drives to benefit the Michigan Harvest Gathering and Feeding America Eastern Wisconsin.

To learn more about these organizations or to make a donation, visit the Michigan Harvest Gathering at http://bit.ly/S7aq9M and Feed America Eastern Wisconsin at www.feedingamericawi.org.

Michigan and Wisconsin Hunger Facts: • In Michigan, 18 percent of households are struggling to put food on the table and nearly 1 in 6 children is at risk of hunger.

•3 29,400 people, including 105,400 children and 32,900 seniors, are at risk for hunger in eastern Wisconsin every year.

“GreenStone and our employees are committed to getting involved within the communities in which we serve,” said Dave Armstrong, GreenStone President and CEO. “Combating hunger is a priority. GreenStone’s customers are tirelessly working to provide our state and the world with an affordable, safe and nutritious food supply to help remedy this growing problem.”

In addition to serving as a corporate sponsor for the Michigan Harvest Gathering, GreenStone is also coordinating employee fundraisers and

•M ichigan Harvest Gathering is a oneof-a-kind emergency food program benefiting hungry Michigan families through the Food Bank Council of Michigan’s member food banks and more than 3,000 community agencies including food pantries, soup kitchens and shelters. The Food Bank Council of Michigan’s member food banks serve 83 counties in Michigan.

• T he mission of Feed America Eastern Wisconsin is to feed the hungry in Wisconsin by obtaining food and related products, distributing them to qualified nonprofit programs and

providing those programs with appropriate assistance. Feeding America Eastern Wisconsin serves 26 counties in eastern Wisconsin.

• S ince 1991, the Michigan Harvest Gathering has collected 8.4 million pounds of groceries and $7.7 million, providing more than 15 million emergency meals to Michigan families in need.

CALENDAR OF EVENTS OCTOBER [2-6]

World Dairy Expo Alliant Energy Center, Madison, Wisconsin

[5]

C entral Michigan University Career Fair

[11]

M ichigan State University Career Fair

[12]

S aginaw Valley State University Career Fair

[16]

G rand Valley State University Career Fair

[17]

U niversity of Wisconsin– River Falls Career Fair

NOVEMBER [17] 37th Annual AutumnFest MSU Pavilion, East Lansing, Michigan [22-23] GreenStone Offices Closed for Thanksgiving

DECEMBER [4-6] Great Lakes Fruit, Vegetable and Farm Market EXPO/ Michigan Greenhouse Growers Expo DeVos Place Convention Center, Grand Rapids, Michigan Above: Teresa Vicary, from GreenStone’s Human Resources department, speaks during the 2012 Michigan Harvest Gathering kickoff at the state Capitol in Lansing, Michigan.

[24-25] G reenStone Offices Closed for Holiday Fall 2012

PARTNERS 18

DIRECTORS' PERSPECTIVE

Elected Directors— Four Fresh Perspectives

S

trong leadership at the GreenStone Board of Director level is essential to maintaining the cooperative’s success. Directors are viewed as key representatives of the organization and provide the vision for the association; including developing a strategic plan and operational policies, and monitoring performance.

The four newly elected board members share why they became a board member candidate and what they hope to bring to the association as an elected member. They also offer a glimpse into their first few months on the board, and what has surprised them most.

Laura Braun Region VI – Ovid, Michigan Farms 700 acres of corn, soybeans and wheat, and manages 200 head of beef cattle Why did you decide to serve your cooperative as a board member?

GreenStone is a strong association that plays an important role in the agricultural industry and rural communities in Michigan and northeast Wisconsin.

Since agriculture is the second largest industry in Michigan and the industry that supplies both our own and our neighbors' livelihoods, I have a vital interest in its economic viability. I decided to serve as a board member in order to share my experiences and perspectives for the continued strength of the association with the ultimate goal of improving and sustaining the quality of life in rural Michigan.

Now that you have been to your first board meeting and have had some time to digest “GreenStone” from a board perspective, what has been your biggest surprise?

My biggest surprise thus far has been the amazing quantity of educational opportunities available to members of the board. By taking advantage of these opportunities and building on previous education and experience, I myself, and the board as a team, should have the ability to lead GreenStone into the future.

19

PARTNERS Fall 2012

DIRECTORS' PERSPECTIVE

Christine Crumbaugh Region V – St. Louis, Michigan Operates 3,000 acre cash crop farm raising sugar beets, corn, soybeans and wheat Why did you decide to serve your cooperative as a board member?

After careful consideration and discussions with current directors, I accepted the nomination from Region V because having a reliable source of credit is essential to growing agricultural enterprises. In our local economy, GreenStone is a significant provider of this credit and it is important that it remains a strong and healthy organization. My business and economic background, along with a keen attention to detail will provide a

Andy Snider Region V – Hart, Michigan

unique perspective in the board room. It is important that decisions made by the board carefully consider all areas that could potentially be impacted.

Now that you have been to your first board meeting and have had some time to digest “GreenStone” from a board perspective, what has been your biggest surprise?

Since being elected to the Board of Directors, I have been introduced to the internal operations and structure of the Farm Credit System and was involved in GreenStone’s strategic planning session in July. My biggest surprise has been to learn how involved the employees are in the agricultural community outside of their daily business operations. They are not only employed in the agricultural industry, they are invested in it.

Dale Wagner Region VII – Manitowoc, Wisconsin

Produces 85,000 tom turkeys, 15,500 weaner pigs, and more than 2,000 acres of corn, soybeans and rye

Operates a 300-cow dairy farm, farms more than 1,000 acres, and owns a custom cropping enterprise

Why did you decide to serve your cooperative as a board member?

Why did you decide to serve your cooperative as a board member?

I was interested in running for this position because of my past experience with cooperatives at the farm and board level, and the importance of these businesses to our farm and agriculture in general. I enjoy leadership and financial issues and felt I could contribute a great deal to the continued success and direction of GreenStone. Walking through the doors of your cooperative and sensing the ownership as a member is important to me. Having been a dairyman for 20 years, currently producing turkeys, hogs and crops, and having relatives in fruit and vegetables, I bring a broad understanding of agriculture across Michigan.

Now that you have been to your first board meeting and have had some time to digest “GreenStone” from a board perspective, what has been your biggest surprise?

It has been an enjoyable experience attending the first three meetings and getting to know the GreenStone executive staff. One thing that was pleasantly surprising is how they are all very down to earth people with families and hobbies, and are very professional and knowledgeable in their respective roles in leading our cooperative. We are in good hands!

I believe a cooperative is an extension of our business and I feel that it is important to have committed leadership on the board.

GreenStone has been an important partner in helping grow my farm operation and now that I have the time, as my son transitions into a larger role on our farm, I am proud to represent the stockholders on the board. I hope I can bring a level headed decision making process to the board room along with a "pulse" of what is going on in the countryside. I also hope members would feel free to contact me with any concerns or questions.

Now that you have been to your first board meeting and have had some time to digest “GreenStone” from a board perspective, what has been your biggest surprise?

I think the biggest surprise has been the amount of information that is presented. I would also add that I am very impressed with the senior leadership that is in place to steer the association into the future. I believe our strength as an organization is the quality of our employees from the bottom all the way up.

Fall 2012

PARTNERS 20

GUEST COLUMN

DROUGHT PLANNING:

Maintaining Agricultural Production with Less Water Michael Sklash, Ph.D There is no doubt that the summer of 2012 reminded us of the effects of widespread, serious drought on agriculture.

It also raised questions like: Is this part of a multi-year trend?

What will summers be like in the future? Will there be enough groundwater next year or in 20-30 years to meet your agricultural needs?

While we will leave short- and long-term weather predictions to the meteorologists, we can offer some advice as it relates to planning for a possible longterm drought. In fact, some of the solutions may come from the past or from distant places where water supplies have been chronically problematic. Some solutions may lie in the water molecules themselves.

Water Collection The Nabateans, an ancient Middle East civilization, collected rainwater from hillsides by "engineering" rocky hill slopes to funnel rainfall runoff to where it was needed. Much more recently, hydrogeologist, Peter Meyboom, described groundwater recharge that was focused through prairie potholes. Perhaps a combination of the Nabatean engineering and

21

PARTNERS Fall 2012

natural, or engineered, prairie pothole recharge could enhance groundwater recharge and produce more groundwater from less precipitation.

Several years ago, we were involved in a rainwater collection project in India. This remote community only received rainfall during the two-month monsoon. Since their hand-dug water supply wells yielded only negligible amounts of water, water was scarce for 10 months.

We "introduced" (old technology but not known there) some rainfall harvesting methods such as roof collection and cistern storage, which changed their water supply dramatically.

Instead of just subsistence farming, they produced enough crops for sale.

Rainwater collection might be a simple solution. Have you

GUEST COLUMN

considered how much roof area you have? Or do you have a few acres of clayey soil you can contour into a large rainfall collector like the one we planned for a dairy that had a limited groundwater supply?

Maximizing Groundwater Sometimes, wells are just not deep enough to maximize groundwater supply potential, or a different pump type could solve the problem. A larger well diameter will not significantly increase the amount of groundwater you can extract from the aquifer,

"LONGER WELL SCREENS ARE NEEDED TO SIGNIFICANTLY INCREASE A WELL'S CAPACITY TO PRODUCE GROUNDWATER. �

even though it provides more inwell storage. Longer well screens are needed to significantly increase a well's capacity to produce groundwater. You can also consider "Maui wells," which are shallow, horizontal wells with very long screens. Maui wells are used in coastal areas to produce a lot of water from thin freshwater aquifers.

water molecules. Their concentrations can be used to distinguish between recent and ancient groundwater recharge. Municipalities frequently use tritium age dating in their wellhead protection plans to determine how large an area around the extraction wells needs protection from surface contamination.

Assessing Water Sustainability If you want to get a better idea of how sustainable your groundwater supply is for the long term, specialized groundwater experts can measure the isotopic composition of your groundwater. They can determine if it has been "recently" recharged and sustainable or if it is "ancient" groundwater you are using. Isotopes are versions of atoms, somewhat like Chevrolet and Pontiac were versions of General Motor cars, which have the same chemical properties but different physical properties. Tritium, an isotope of hydrogen, and oxygen-18, an isotope of oxygen, occur in natural

There are options for optimizing your groundwater supply and planning for the future, even if drier times are ahead. In our opinion, understanding your water supply options now is a huge step forward for your planning.

ABOUT THE AUTHOR Michael Sklash, Ph.D., is the senior hydrogeologist at The Dragun Corporation, an environmental consulting firm.

The opinions stated herein are not necessarily those of GreenStone Farm Credit Services.

Fall 2012

PARTNERS 22

3515 West Road East Lansing, MI 48823

Take on each growing season with the tools you need...

CONFIDENCE CROP INSURANCE– Talk to us before the November 20 close date for crop fruit sales. We are your risk management partner.

800-444-FARM

www.greenstonefcs.com