Partners - Summer 2012

Summer 2012

GreenStone FCS

Promoting the business success of our customers and the rural community

MAEAP VERIFICATION DISASTER RELIEF

SUMMER MARKET OUTLOOK ADVOCATING FOR AGRICULTURE

ALL IN THE FAMILY UPCOMING EVENTS

STEPS TOWARD RETIREMENT

Editor’s

NOTE Summer 2012 Published by:

GreenStone Farm Credit Services

2 Comments from CEO Dave Armstrong CEO Dave Armstrong brings members up to speed on the state of the business and the progress of the industry.

The aromas of the growing season are upon us…among them, fresh haylage remains my alltime favorite. It instantly takes me back to many fond days spent in the tractor on my family dairy farm. As you reel in your favorite scents of the seasons, relax and take a minute to read through this issue of Partners. As always, you will find the latest in the markets, a legislative update, and a supply of the most recent news from your association. We hope you enjoy reading about a young farmer with big aspirations in the blueberry market, as well as thoughts from your Directors on their approach to environmental protection. As you go back to work in the fields, remember to let your senses acknowledge the small delights from Mother Nature, and always be sure to let us know when you have an idea or area of interest for future articles.

Best wishes for a safe and rewarding summer!

17 Steps Toward Retirement

11

3 Market Outlook Agricultural economist, Bob Utterback, cautions producers on the up side and down side of strong prices.

10 Advocating for Agriculture Policy changes are in the air, and GreenStone is lobbying for agriculture at the federal level.

11 YBSF Feature Family is the glue that holds this operation together, but it took some searching for Matt Hamlin to realize his future.

15 Directors' Perspective Three directors remind us all that farmers are the original environmentalists.

At some point we all stop working. Consider how you will make the shift and leave your legacy for others.

Summer Notes 5 Upcoming Events 7 News Update 8 Interns 9 MAEAP Certification 14 Disaster Relief 14 Candid Comments

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

10

July -Wednesday the 4th September -Monday the 3rd

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

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

3

COMMENTS

From CEO Dave Armstrong

Greetings from East Lansing!

As I write this, the sun is out and we continue to experience warm temperatures. The end of May felt like the middle of July and my wife, Deb, and I commented to each other that it seemed like the kids should have been out of school and summer vacations in full gear!

I

suppose it’s because we had July-like weather in March, March weather in April and a fantastic May. If this is global warming, I think I might like it.

Unfortunately, Mother Nature played a very cruel joke on our fruit producers this spring. Heavy, wet snows in the northwestern portion of the state decimated many acres of fruit trees by breaking off branches and actually splitting some trees in half.

If that wasn’t bad enough, the warm up in March resulted in trees blooming early, only to be frozen off in April. At this point, it appears that 90 percent of Michigan’s tart cherry and apple crops, 95 percent of peaches, and at least 85 percent of juice grapes will be lost this year. This is a significant disaster for our members who are in the fruit business.

As you'll read on page 14, we are working with state and federal officials in a very tight budget environment to seek some assistance for those growers affected by the freezing conditions. In addition, our chief credit officer, Paul Anderson, is developing plans for responding to our affected

member's needs in this difficult time. Financial service officers (FSOs) are contacting members impacted to discuss their individual situations and assist in putting financial plans in place to get them through the remainder of 2012 and beyond. Of course, you are always welcome to contact your FSO directly whenever you or your operation requires further discussion or attention!

The good news however, is that early planted corn looks very good, as do sugar beets. At this point in the season, we could use some rain, particularly in the southern part of Michigan. Hopefully, we will get some widespread moisture in order to give a great looking crop some nice momentum here in July.

Dairy prices have slipped below break-even for many, but are better than they were in 2009-10. Most of our dairy farmers were able to rebuild working capital and equity last year and should have enough “altitude” to see them through this current period of low prices. Cattle margins are currently improving with hogs above breakeven, but not at the levels of last year.

Land prices continue to be strong in not only good agricultural areas, but they are also starting to pick up around urban areas as farmers are circling back to what may not be as good of ground or hard to farm due to population pressures; still, this land is relatively less expensive. While Continues on page 6...

Summer 2012

PARTNERS 2

MARKET OUTLOOK

Market Outlook By: Bob Utterback The exceptionally early spring is giving way to the dog days of summer and before we know it, producers will be sweeping out the bins and oiling up the combines in preparations for this year’s harvest.

While we all know the seasonal pattern is to go from the uncertainty of spring and summer to the certainty of harvest, which causes bearish or down trending markets, this year is proving to be stressful as ever to producers with regard to pricing their production.

MIDWEST CORN AND SOYBEAN PRODUCERS EXPERIENCED AN EXCEPTIONALLY WARM SPRING, WHICH LEAD TO RECORD BREAKING PLANTING PROGRESS

BY LATE MAY.

Let’s first review what has happened the first half of the year. We know South America had some difficulty with their soybean crop, which helped to propel soybeans well above $14 on solid Chinese buying. We also heard that Russia has some serious concerns with their wheat crop. This helped lift wheat to $6, but it had difficulty getting above $7. Finally, while corn stocks [what is in the producers’ bins] were tight, producers held firmly to unpriced inventory. This resulted in extremely tight basis bids [cash was premium to Chicago futures], while new crop basis bids have started to reflect the expectation of a big crop.

As I write this outlook, new crop cash bids are below Chicago deferred prices.

The expectation of domestic feed wheat also helped keep the old corn prices in check. Finally, Midwest corn and soybean producers experienced an exceptionally warm spring, which lead to record breaking planting progress by late May. Corn 3

PARTNERS Summer 2012

and soybean acres are off to a good start.

As we entered late May/early June some dry conditions started to develop in the central Corn Belt, but other areas saw good rains so the overall crop conditions were exceptionally strong. Soybeans have experienced some germination concerns, but overall the crop has been off to as strong a start as we have seen in some time.

The first major report that producers had to be wary of was the acreage report released at the end of June. This was the first hard estimate of how many acres of corn and soybeans were actually planted. While there has been some conflicting information, I believe the exceptionally good spring plantings and strong corn price premiums will eventually result in close to 96 million acres being planted, while soybeans could be below 75 million. With this strong corn acreage, I believe the U.S. corn yield will drop to somewhere between 160 and 162.

MARKET OUTLOOK

This leaves us with the possibility of a huge crop [around 14.3], with all eyes on demand. Feed usage is stable at best even while the United States Department of Agriculture (USDA) is using it to balance the books. Crude Oil prices are dropping as world recessionary pressure mounts. The implication is ethanol prices will be on the decline and subsequently the price they can pay for corn will decline as well. Remember, they are only going to produce when at least the variable costs can be paid. It is rumored that the maximum many can pay is $6.75 before closing down, so it appears the bulls' only hope is corn exports.

This is where the corn bulls are putting their chips on the table. As we moved into summer, the Chinese started a financial stimulation program to jump start their struggling economy as the European and U.S. economy continued to sputter along. I suggest the trade expects China will want to keep food inflation in check in order to keep its people happy.

Remember, China is about control and a well fed population is a tranquil population. This is where the greatest jump in usage could develop, in my opinion. The USDA number is at 1.9 billion and it could go up closer to 2.5 billion if the Chinese crop experienced any type of weather stress from late May to early June. Just remember that a 5 percent drop in production could wipe out a large percentage of our 1.8 to 2 billion expected production; if our yields and the Chinese crops are close to trend line, it could get rather nasty this fall.

So what does all the concern about the macro environment and consumer demand mean to agriculture? Hogs and cattle will be the most immediately impacted if consumer confidence implodes. These producers have done very well the past year with the bottom line because they have not expanded their herd size. I sense everyone wants to pay down debt and is very reluctant to expand in this economic environment, so the ability of prices bouncing back will be closely related to consumer demand.

I, however, would be quick to point out that hog producers have the biggest risk because we know that a herd can be increased very fast in the hog sector, while it can take years in the cattle sector. A recovery back to the winter highs for the summer of 2013 inventory should be viewed as a scale-up selling opportunity.

The impact on corn, soybeans and wheat will be more commodity specific. If we assume close to trend line yields, I expect the corn market will be bearish from July to September.

Corn should start to put on significant carry incentive along with a wide basis as we move into September in order to entice producers to store rather than sell discounted inventory at harvest. How fast corn bounces off the fall lows will heavily depend upon the level of demand and how comfortable end users are in allowing producers to store production and maintain a hand-to-mouth buying attitude.

Keep in mind that this outlook was written prior to the release of the end of June USDA reports. The overall trend in soybeans could be significantly better if the expected increase in acres was not confirmed due to the strong planting progress of corn.

If planted acres are indeed below 75 and we see just average yields, don’t be surprised to see the corn/soybean ratio increase close to record levels. I expect Chinese buyers will be more aggressive in buying soybeans than corn. This will enable the basis patterns to be firmer and limited carry incentive to develop, enticing producers to store on farm. While soybean producers may see a faster recovery than corn producers, the long term impact could be significant. I suspect some producers that have been pushing their fields [corn on corn] would like to switch to soybeans because of profit potential.

If we see the corn/soybean ratio go above 3:1 that economic incentive will become a fact, in my opinion. This suggests producers need to closely watch the pricing of their anticipated 2013 soybean inventory if they can make much above $13.50 and strong price ratios exist in the front end contracts.

Domestic wheat crop yields are not expected to be anything exceptional and should be down a little. This, plus the problems Russian producers are having with their crop, has helped place a very strong base of support between $5.50 and $6. That’s the good news. The bad news is wheat is still very sensitive to corn prices. If lead month corn values start to drop below $5, it will pull wheat values lower. If anyone has hedges in place, sit tight. Focus on rolling hedges forward to capture, carry and store the inventory and wait for basis recovery.

However, be careful if we have big corn supplies; there will be limited wheat feeding which means a very slow recovery out of the bottom. I suggested selling lead month wheat as we moved into July anytime it was above $6.85 to $7.05. If not already done, should the market close above this price range, roll all futures positions into deepENJOY THE GOOD in-the-money puts as a defensive measure TIMES, BANK

ONCE INFLATION DOES TAKE HOLD, POLICYMAKERS WILL BECOME CONCERNED AND EVENTUALLY INTEREST RATES WILL RISE.

SOME MONEY, GET BETTER AT CONTROLLING INPUT COSTS...

Summer 2012

PARTNERS 4

MARKET OUTLOOK

because it would indicate something fundamentally has changed that this outlook was not expecting.

I sense businesses and consumers alike are sitting on the sidelines right now trying to keep their heads above water and pay down debt. The problem is, with high fuel bills and cost of living, the ability to get ahead is becoming an increasing concern for many consumers.

future is going to be better than the past.

In the end I expect politicians will find it easier to go to war than cut spending.

Since both of these alternatives are out of favor, there are only two practical alternatives that I see. One is to increase taxes; we are already seeing this at the local and state levels and the federal government is not far behind. This, unfortunately, will possibly drag the economy back into a very stagnate to recessionary growth pattern. The other alternative is to inflate. This will mean good times for owners of things and bad times for owners on paper. Since agriculture is rooted in production, [which includes ownership of land, machinery and livestock as an industry], agricultural producers should do better than most other parts of society as long as there is no burdensome level of debt.

Looking forward, my biggest concern is whether or not the politicians panic if the global economic situation continues to slide lower. The risk is politicians become very defensive about protecting local jobs at the risk of alienating foreign governments. The potential of an undeclared trade war that reduces money flow is exactly the opposite event we need at this time of global economic contraction. The challenge I sense is businesses and consumers alike have to start developing confidence that the

enjoy the good times, bank some money, get better at controlling input costs,

While understanding individual commodity supply/demand conditions, it will also be important to monitor the overall global economic environment (this year more than ever). Major issues that will be affected this fall will include how the U.S. goes—left or right in its decision about tax policy, big versus small government, and how much we will spend and who pays the bill.

MSU AG EXPO July 17-19, 2012 East Lansing, MI www.agexpo.msu.edu

SEP

JUL

FARM TECHNOLOGY DAYS July 17-19, 2012 Outagamie County, WI www.outagamiefarmtech.com

OCT MICHIGAN ASSOCIATION

5

PARTNERS Summer 2012

6

3

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

Join us at these upcoming events

JUL

17

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 Remember, while we may enjoy the by subscribing to Utterback Marketing Services, Inc.’s email/internet services benefits of inflation for a period of at www.utterbackmarketing.com or by time, the political winds will start to calling 800-832-1488 (ask for Laura). blow sharply against ag producers over The information provided is believed to time. Once inflation does take hold, be reliable. There is risk of loss associated policymakers will become concerned with trading futures and options. Consult and eventually interest rates will rise. your Risk Disclosure Statements before Does anyone remember 1980 to 1985? It trading. Commodity trading may not be is not an issue that it is going to happen; suitable for recipients of this outlook. it’s only a matter of when and how long To comment on Outlook, email the contraction period will last. So yes, utterback@utterbackmarketing.com.

CALENDAR OF EVENTS 17

and focus on protecting profits rather than trying to out guess the market.

In my years of being involved with the markets, all I can say is it is harder than ever to try to out guess the markets. All a producer can hope to do is use it to lock up profit and concentrate on being the best producer he/she can be!

LOGGING CONGRESS September 6-8, 2012 Oshkosh, WI timberpa.com/congress/schedule-events OF REALTORS EXPO October 3-5, 2012 Dearbor n, MI www.mirealtors.com

DEC GREAT LAKES EXPO–

4

FRUIT, VEGETABLE, GREENHOUSE & FARM MARKET December 4-6, 2012 Grand Rapids, MI www.glexpo.com

CEO COMMENTS

...CEO Comments continued I certainly do not want to deny anyone a profit, a record corn and soybean crop would go a long way in taking some of the “air” out of this land “balloon” slowly rather than all at once.

Through it all, GreenStone continues to be a dependable, competitive, and responsible source of credit and other financial services. First quarter earnings were 35 percent higher than the first quarter of 2011 primarily due to a reduction in loan loss provisions and an increase in net interest income.

While one would think that loan growth would be at a record pace, it is not. The profitability of the industry across almost all commodity segments was significant in 2011 leaving record levels of cash in many of our customers’ pockets. So, even though land prices are higher and new machinery is being purchased, more of it is being paid for without borrowed money, which is a good thing in the long run.

Our growth year to date is 3.7 percent with an annual rate projected for 2012 of 5.5 percent or about the same as it was in 2011. The more equity our members can build in good times, the better off they will be when the downturns, that are a normal part of our business, return.

Permanent capital continues to build with a 14.8 percent ratio as of March 31, 2012. The regulatory minimum is 7 percent. Association “equity” is expected to continue to grow throughout the year as growth moderates and margins remain near business plan targets. In addition, the allowance for loan losses remains adequate at .9 percent of total loans or $47.46 million. The allowance account and capital act as GreenStone’s cushion against difficult economic times. The board and management’s strategy of building these reserves will continue in a balanced fashion so that our interest rates remain competitive and long term commitment to be a reliable lender, in good times and bad, can be fulfilled.

Online Services Some of you may have noticed a new look and feel to GreenStone’s Online Banking platform. We have been working with other Farm Credit associations, our wholesale bank (AgriBank), and a web consulting firm called FundTech for more than three years to provide our customers with a robust and convenient way to do business with us. While our online system has been functional, we admit that it has not been perfect. Yet, based on the member feedback received to date on the new release, we believe usage will increase and satisfaction should improve. As you will read later in this publication, the new screens are more intuitive to navigate and information easier to find.

In addition to these enhancements, we are also working on a new portal that will allow users a single online sign on to complete even more transactions, including an online loan application for small loans, by year end.

As you read in the Spring 2012 Partners, we have also launched a new electronic communications initiative that has already received numerous subscriptions in just its first few months in operation. The Communication Preferences system will enable you to select how you would like to receive marketing communications from us. If you would prefer to start receiving future marketing communications, including things like this magazine, by email, or would like to receive customized notifications, be sure to sign-up today.

Visit: www.greenstonefcs.com/communicationpreferences.

Rewards and Recognition I am also pleased to report that GreenStone was recently recognized as one of West Michigan’s 101 Best and Brightest Companies to Work For by the Michigan Business and Professional Association. More on this award is shared later in the publication, but I always believe having an engaged workforce that feels valued by its employer is critical to GreenStone’s success and the leading driver behind our 95 percent customer satisfaction ratings as well! Therefore, I once again commend the team here at GreenStone for their work!

On this same note, GreenStone’s marketing and public relations department was also recently honored by the National Agri-Marketing Association (NAMA) during the 2012 Agri-Marketing Conference in Kansas City, Missouri.

GreenStone received the first-place award in the “less-thanpage print advertisement, series” category at the national Best of NAMA competition. Once again, please join me in congratulating our very talented team for receiving such a prestigious national award!

Thanks for taking a minute to enjoy this issue of Partners.

As you read through the articles, I hope you get a sense of how involved your association is in not only providing you with a dependable, competitive, and responsible source of credit and financial services, but contributing to the daily fabric of our industry and the rural communities we all call home. From our efforts in serving the special needs of young, beginning, and small farmers, to legislatively advocating on your behalf at a state and national level, to contributing money and time at local community events, it’s all about relationships and being a reliable partner in good times and bad. Have a safe and enjoyable summer, and, as always, feel free to contact me at 517-318-4105 or dave.armstrong@ greenstonefcs.com if I can ever be of assistance!

Dave Armstrong

Summer 2012

PARTNERS 6

NEWS UPDATE

NEWS UPDATE SUMMER 2012 Online Banking Upgrade GreenStone customers who have recently logged on to their Online Banking accounts may have noticed a few changes.

The system received an upgrade in late May that made Online Banking more user friendly.

Among the most noticeable changes are the system’s new look and ease of use, which have both received positive feedback from GreenStone customers according to Jamie Miller, Online Banking upgrade project manager.

“Shortly after completing the system upgrade, branches reported that customers had called or emailed saying they found the new design and features to be very helpful,” said Miller. “Our goal with this project was to enhance our system and make it more user friendly, and the initial reports have shown that we have certainly accomplished that.”

In addition to the new look and added functionality of the Online Banking system, other new features include: • Customizable screen layout to help organize multiple accounts • Ability to create favorite links to custom reports and other items • New “I would like to…” menu that allows one-click access to make payments, disbursements, internal transfers and adding external bank accounts.

To access the Online Banking system customers should visit www.greenstonefcs.com and choose “Online Banking Login” from the top "Account Access" drop down menu. Once there, current users can log into their accounts using their existing username and password, while new users can click on “Enroll Here” to establish a GreenStone Online Banking account. When enrolling, customers must know their current loan balance for verification, which can be obtained on the latest statement or by calling their local branch.

GreenStone Honored at National Best of NAMA Awards Ceremony GreenStone's marketing and public relations department was recently honored by the National Agri-Marketing Association (NAMA) during the 2012 Agri-Marketing Conference in Kansas City, Missouri.

GreenStone received the first-place award in the “less-than-page print advertisement, series” category at the national Best of NAMA competition.

cooperative’s marketing and public relations department.

The entry beat out submissions from Pioneer Hi-Bred, and others whose entries were designed through partnering advertising agencies.

GreenStone’s submission was conceptualized and designed in-house by the

One of West Michigan’s 101 Best and Brightest Companies to Work For GreenStone Farm Credit Services was recently recognized as one of west Michigan’s 101 Best and Brightest Companies to Work For by the Michigan Business and Professional Association (MBPA).

This honor comes after GreenStone was recognized nationally and as one of Metro Detroit’s 101 Best and Brightest Companies to Work For by the MBPA in 2011.

The 101 Best and Brightest Companies to Work For is an awards competition providing the business community with the opportunity to gain recognition, showcase best practices and demonstrate why they are an ideal place for employees to work. The program is also a premier awards symposium that celebrates those companies that are making the lives of their employees better as well as the community as a whole.

Staff from GreenStone’s Allegan, Berrien Springs, Charlotte, Grand Rapids, Hart, Hastings, Ionia, Mason and Schoolcraft branches as well as the corporate office in East Lansing contributed to the organization’s entry by providing secure feedback in several categories.

GreenStone is among an elite group of winners that collectively practice innovative strategies and represent human resources best practices. More on GreenStone’s employee culture can be found at www.greenstonefcs.com/careers.

NEWS UPDATE

GreenStone Welcomes Summer Crop of Interns GreenStone is hosting six student interns this summer, providing each with an opportunity to sharpen their skills in their respective career field. Five of the incoming interns will be based in the organization’s East Lansing, Michigan headquarters, while one intern will be based in GreenStone’s De Pere, Wisconsin branch.

This summer’s intern class includes four juniors and two seniors with a variety of backgrounds and interests in the agriculture industry. Each intern will work approximately 14 weeks in their position before returning to school for the fall semester. In addition to real-world experience in the agriculture industry, GreenStone internship positions are also paid positions with the company. The summer 2012 class of interns includes: Emily Fletcher Title: Operations Intern Hometown: Walkerville, Michigan College: Michigan State University Major: Agribusiness Management Branch: East Lansing, Michigan What I hope to gain from my internship: Business experience and a different perspective of the agriculture industry.

Anthony Hart Title: Credit Intern Hometown: Durand, Michigan College: Michigan State University Major: Agribusiness Management, Accounting Branch: East Lansing, Michigan What I hope to gain from my internship: Knowledge and work experience.

Christopher Hiebl Title: Crop Insurance Intern Hometown: Edgar, Wisconsin College: U niversity of Wisconsin River Falls Major: Agricultural Business Branch: De Pere, Wisconsin What I hope to gain from my internship: Knowledge of the inner workings of crop insurance and agricultural finance in general.

Joel Korson Title: Capital Markets Intern Hometown: Haslett, Michigan College: Michigan State University

Major: Accounting Branch: East Lansing, Michigan What I hope to gain from my internship: Strong knowledge of the credit industry.

Scott Simon Title: Credit Intern, Commercial Lending Hometown: Westphalia, Michigan College: Michigan State University Major: Agribusiness Management Branch: East Lansing, Michigan What I hope to gain from my internship: More understanding of the loan process, as well as the Farm Credit System as a whole. I also hope to see the interactions between GreenStone employees and farmers.

Nick Trierweiler Title: Information Systems Intern Hometown: Westphalia, Michigan College: Michigan Technological University Major: Computer Science What I hope to gain from my internship: Knowledge and experience pertaining to my computer science major.

Bloggers Needed The Michigan Ag Council is seeking farmers interested in teaching consumers about agriculture by blogging about their farms on the MLive.com Farm Fresh Food blog. No previous blog experience or technical skills are needed. Contact Becky Cunningham, Michigan Ag Council Program Coordinator at becky@miagcouncil.org for more information about writing your blog posts.

To read other contributing blogger posts, take a look at blog.mlive.com/freshfood.

Front row (left to right): Joel Korson, Christopher Hiebl and Emily Fletcher. Back row (left to right): Scott Simon, Nick Trierweiler and Anthony Hart.

Summer 2012

PARTNERS 8

MICHIGAN AGRICULTURAL ENVIRONMENTAL ASSURANCE PROGRAM

Protecting the Environment, One Verification at a Time The Michigan Agriculture Environmental Assurance Program (MAEAP) is a way for farmers to protect our environment, with the added benefit of regulatory incentives. MAEAP is a holistic approach to environmental protection. It helps farmers evaluate their entire operation and truly make sustainable management decisions balancing society’s needs, the environment, and economics.

MAEAP is a partnership effort that aims to protect natural resources and build positive communities by counseling Michigan farmers that operate farms of all sizes and all commodities on environmentally responsible agricultural production practices. More than 100 local coordinators and technical service providers assist farmers as they move through the MAEAP process toward verification.

Three Steps Farmers must complete a three step process to achieve MAEAP verification. The three phases include attending an educational session, completing a farm-specific risk assessment and implementing identified pollution prevention risk reductions, and undergoing an on-farm verification that ensures the farmer has implemented environmentally sound practices.

Your Privacy is Important to Us GreenStone continues to hold your financial and other personal information in strict confidence. We do not sell or trade our customers’ financial or personal information to marketing companies or information brokers.

Since 1972, Farm Credit Administration regulations have forbidden the directors and employees of Farm Credit institutions from disclosing personal borrower information to others without borrower consent, and we hold to it.

For more information on privacy and security, visit www.greenstonefcs.com.

9

PARTNERS Summer 2012

The program’s three systems, Farmstead, Cropping, and Livestock, each examine different aspects of the farm. After becoming verified in any one, two or all three systems, a farm can display a MAEAP sign signifying that MAEAP partners recognize their farm as environmentally assured.

Every three years the farm must be re-evaluated and re-verified to ensure that it remains in compliance with standards.

Get Started The first step towards MAEAP verification is to visit your local Michigan Conservation District office. Conservation Districts are “gateways” in their local communities, providing links between land managers and conservation service providers including state, federal and local governments. District technicians are professionals in their field, staying up to date on innovative conservation practices, Farm Bill conservation programs, and laws and regulations.

>STAY IN TOUCH If you have any questions regarding MAEAP, contact your local Conservation District or visit the program website at www.maeap.org. Make sure to like MAEAP on Facebook for up-to-date postings on farm verifications, upcoming events, and MAEAP in the news.

See us at Ag Expo and Wisconsin Farm Technology Days Stop and see us at Ag Expo at Michigan State University (new location at Avenue B and First Street) or Wisconsin Farm Technology Days in Outagamie County in Wisconsin (Ag Business Tent D, Booth numbers 156-158) on July 17-19, 2012.

GreenStone staff will be on hand to answer questions and share information on our “Pass It On” customer referral program.

Have you noticed? GreenStone’s rate notices now have a new look! We hope you find the new design easy to read and understand.

If you have any questions, please contact your local branch.

GOVERNMENT RELATIONS UPDATE

Community Facility Guarantees – Community Facility Guarantees support essential facilities in rural areas and towns of up to 20,000 in population. Loans and guarantees are available to public entities such as municipalities, counties, and special purpose districts, as well as to non-profit corporations and tribal government. This money may be used to construct, enlarge, or improve community facilities for healthcare, public safety, and public services.

Community Facility Guarantees provide critically important credit enhancement for lenders. This program encourages partnering between Farm Credit System institutions and commercial banks to work together with United States Department of Agriculture for the betterment of our nation’s rural communities.

Advocating for Our Industry The GreenStone board of Directors’ legislative/ Public Policy Committee has been meeting regularly following its formation in November 2008.

The general purpose of the Committee has been to assist GreenStone, through its board of directors, to set strategic direction in the developing legislative and public policy to support sound policies in overall best interests of agriculture and rural communities within our Michigan and Wisconsin territories that are in line with GreenStone’s priorities.

Key in this effort has been to cooperatively work with the AgriBank District and Farm Credit Council.

Recently, there has been significant effort to communicate with federal legislators concerning the importance of crop insurance, community facility guarantees, and a new farm bill in order to continue meeting the needs of today’s farmer.

Crop Insurance – GreenStone, along with the entire Farm Credit System, supports a strong, effective, fully funded crop insurance program. As Congress embarks upon the reauthorization of farm programs, we support the continued robust delivery of a federal crop insurance program as a vital part of the farm safety net.

We believe maintaining present premium subsidies will help ensure crop insurance remains affordable for farmers. This will help maintain strong participation in the program, which will reduce loss ratios, further keeping farmer premiums affordable thereby reducing costs to the federal government. In addition, maintaining a viable, affordable program helps producers secure financing, especially young and beginning farmers who traditionally have less collateral and equity.

Young, Beginning, and Small Farmers and Ranchers in the AgriBank District– GreenStone is the leading provider of credit to young, beginning and small farmers and ranchers within its territory. The Farm Credit Act requires that Farm Credit lenders have programs specially focused on meeting the needs of young, beginning and small farmers and ranchers and GreenStone annually reports their lending activity in these areas to the Farm Credit Administration. Keeping a strong Farm Bill in place will allow GreenStone to maintain its steady service to this important market segment.

As members of the Farm Credit System through your GreenStone Farm Credit association, your communication to your federal and state legislators about the importance of these programs would be helpful and appreciated.

Summer 2012

PARTNERS 10

YBSF FEATURE

All in the Family Matt Hamlin looks back fondly on the “together time” he recalls delivering seed with his father, Harold. He also has great appreciation for the work ethic instilled in him while helping out on the family farm in South Haven.

By Jennifer Vincent

H

owever, when he was in high school, he took a job waiting tables because, “I didn’t know if I wanted to farm and, it made more money than working with my dad,” he says.

At Michigan State University he obtained a bachelor’s degree in agricultural business management with a specialization in Spanish and food marketing.

“I knew I could do business and sales,” he says.

> BLUEBERRY FACT T he blueberry is a true blue food. It derives its bold coloring from the high content of anthocyanin.

Anthocyanin is a water-soluble pigment that imparts colors ranging from blue to shades of red.

He took an internship with Kellogg in category management. “I walked in at 7:30 a.m. and left at 5 p.m. I had just spent an entire day inside. That’s when I realized I wasted a beautiful day, and I really hated it.

That’s when I knew I really wanted to go back to the farm.”

Above left: Matt Hamlin and his wife, Creela, both 31, have returned to their roots and are farming with Matt’s father, Harold. In addition, they have ventured out on their own with a blueberry farm that includes a greenhouse for raising blueberry stock for other growers.

11

PARTNERS Summer 2012

YBSF FEATURE

While his dad was supportive of Matt returning to the farm, he never influenced his decisions. “He wanted me to make my own decisions and never pushed farming onto me,” Matt says. “Farming is something that if you don’t enjoy it, it can make you a very unhappy person—it’s hard work with a lot of stress and risk.”

It’s a concept Matt and his wife, Creela, will follow as they raise their two young sons, Clark, 2, and Oliver, 6 months. “That’s not to say that they won’t have responsibilities and chores on the farm,” Creela adds. “We know how important it is to have a good work ethic.”

Matt and Creela, both 31, share farm backgrounds, as Creela grew up on a tree fruit farm in Bangor, just about 20 miles south of Hamlin Farms.

However, it wasn’t farming or the proximity of their roots that brought them together.

While Matt was in his senior year at MSU, Creela was in her senior year at Grand Valley State University and mutual friends introduced them to each other. Two years later, in April 2005, they wed.

Joining the Operation The lure of fresh air and desire to work for himself producing tangible outcomes brought Matt to the farm to form a partnership with his dad, mom (Martha) and sister, (Amy Grosvenor). They raise a few thousand acres of corn, soybeans, rye, and slicing cucumbers for the fresh market in large markets across the U.S., as well as 50 acres of cauliflower raised for pickling and processed by Freestone Pickle Company in Bangor.

He is also a Pioneer seed dealer.

Harold, who also owned a trucking business for about 10 years, grew up raising an assortment of crops on the family farm, including peaches, apples, strawberries, cauliflower, asparagus, and peppers.

“My dad was intrigued by cucumbers and owned his own field when he was 12,” Matt says. “The farm transitioned from pickling cucumbers to fresh cucumbers and that became my dad’s specialty. He told me to pick something I was good at and really concentrate on it.”

Cauliflower was Matt’s grandfather's, Jerdon “Jiggs” Hamlin’s, passion. Both cauliflower and fresh cucumbers are still prominent crops on the farm that require a good deal of manual labor.

Matt credits Amy with developing and keeping a reliable and skilled work force for Hamlin Farms. “She puts in a lot of effort to ensure we have reliable help,” Matt says. “We have about 20 employees to manage equipment and people and about 200 employees in the height of the season to pick and pack. We have many that have been with us upwards of a decade.”

Amy had tried to work within the H2A government employee program for migrant workers, but Matt says it just got prohibitive with paperwork and overly burdensome regulations.

“We have gone back to walk-in workers,” he says. “Amy is on the phone a lot and is fluent in Spanish, as are both my dad and I. It helps to keep a straight line of communication.”

Raising fresh cucumbers requires a great deal of timing to get into the market early by using tunnels and drip irrigation. Attending to the farm’s fertility and chemistry needs is a critical element, as disease and pests can cripple profits quickly. Creela uses her expertise to fill that need and also serves about 100 growers as a fulltime agronomist for Hamilton Farm Bureau.

Branching Out Even with those busy schedules, Matt and Creela yearned for their own farm enterprise. They decided to raise blueberries and bought their first farm

of 40-acres on a land contract the same year they were married.

In the next four years, the couple acquired another 90 acres including a house, with 80 acres of that being financed in two different transactions through GreenStone Farm Credit Services, which also provides operating loans for the farm. “It was really easy to use GreenStone,” Creela says.

Matt adds, “Our current loan officer, Cindy Birchmeier, has helped us with changes accounting-wise and helped structure our loans to fit our needs.

"AT FIRST WE SAID OUR GOAL WAS TO GET TO 100 ACRES OF BLUEBERRIES. NOW IT’S UP TO 200 ACRES… IT’S LIKE AN ADDICTION.”

Before that, Larry Urban helped us finance our first open field that we bought and cleared for blueberries.

What’s great about GreenStone is they didn’t make us feel young.”

The Hamlins also credit Michigan Farm Bureau for helping them branch out on their own and providing leadership skills and opportunities for young farmers, as well as representation and advice on issues important to their farm.

“Craig Anderson at Michigan Farm Bureau (MFB) really knows the issues surrounding labor on the farm and has done a good job lobbying for us,” Matt says. “We also appreciate what MFB has done to squash some of the misconceptions about farming from non-farmers. Just because a family Summer 2012

PARTNERS 12

YBSF FEATURE

farm is large doesn’t mean we’re not doing a good job.”

Defining the Future The Hamlins decided to raise blueberries because it fit well into the rotation with other crops on the farm and is more flexible than some other crops.

A portion of the crop is fresh blueberries, which is contracted for picking and packing through Tru Blue Farms. The rest of the crop the Hamlins machine harvest themselves and is processed by Stokes Blueberry Farms and Petersen Farms. There is also a blueberry greenhouse where 40,000-50,000 plants are started and grown out annually for other blueberry farmers in the area.

“It’s really been a good thing for us,” Matt says. “But, we couldn’t do it without the financing support we’ve received, my dad’s equipment, and the phenomenal, skilled help that we have.”

The plan is to continue to grow the blueberry business. Creela says, “At first we said our goal was to get to 100 acres of blueberries. Now it’s up to 200 acres… it’s like an addiction.”

Above: The Hamlins like raising their children, Clark and Oliver, on a farm and, in the process, will instill good work ethics as they grow older.

> BLUEBERRY FACT ichigan leads the nation in blueberry M production, producing 32 percent of the blueberries eaten in the U.S. In 2010, the state produced 109 million pounds of the small, round berry.

STRAIGHT TALK Q: When you were eight, what did you want to be when you grew up?

Matt: “ I couldn’t really make up my mind. It sort of

depended on the day you asked and who was around. I told my mom that I wanted to be a pastor.”

Q: When did you first realize that you wanted to farm for a living?

Matt: “ When I started working for Kellogg’s. I

didn’t want to be in an office and because I knew the job would require me to move around. I didn’t want to be far from home.”

13

PARTNERS Summer 2012

Q: Who is your mentor; who do you look up to?

Matt: “ My dad, Harold."

Q: What is the biggest challenge for young, beginning, or small farmers today?

Matt: “ Land availability.”

Q: What advice would you give to young,

beginning, or small farmers getting started today?

Matt: “ Try it. Go with your gut. If you love it,

stick it out. Not everything has to be an immediate success. There will be some failures along the way.”

DISASTER RELIEF/CANDID COMMENTS

Candid Comments...

Disaster Relief Legislation

GreenStone FCS, GreenStone is preparing to provide low-cost disaster relief loans to Michigan fruit producers and processors affected by the unprecedented devastation experienced during the spring growing season.

Our efforts come in the wake of Michigan Gov. Rick Snyder and the state legislature creating the Agricultural Disaster Loan Origination Program Act of 2012 for fruit growers and processors whose operations were impacted by harsh weather earlier this year. The governor and state legislature worked closely with GreenStone and other state financial institutions to develop the program, which will provide loans with a fixed interest rate as low as one percent to producers and processors for up to five years.

“The damage that fruit producers and processors have witnessed in 2012 is unprecedented and it is critical that we join together as a community to provide them with the tools they need to persevere during this disastrous time,” said GreenStone president and CEO, Dave Armstrong. “I commend Gov. Snyder, the Michigan Legislature, the Michigan Department of Agriculture and Rural Development and the

Michigan Farm Bureau for acting quickly to address this disaster.”

Gov. Snyder’s signing of the bill is the first step in getting Michigan fruit producers and processors the assistance they need. Once the Michigan Legislature appropriates funds for the program, affected producers and processors will be able to take advantage of these low-interest loans. Producers and processors interested in taking advantage of this program should contact their local branch office or financial services officer after the appropriation has been made, which is expect to take place later this summer.

Thank you for your telephone call earlier this week inquiring as to the service we received from the GreenStone Saginaw branch on our recent land purchase/mortgage transaction.

We have been dealing with GreenStone for over 30 years now, and can truly say Steve Schaper, Kathy Esckilsen, and Marsha Wilhelm all went above and beyond to help us purchase this new farm. They were all professional, got documents approved/ filed as they said, and helped us deal with a seller who was dealing with a lawyer that was unavailable most of the time and incorrectly filed section numbers of parcels on trust papers.

Steve was in contact with us weekly (this took over three months to complete), made sure we understood what documents needed to be filed, made sure he received copies of all deeds, documents of trust, etc., to ensure they were correct to protect us, and helped answer any questions we had. If Steve Schaper was running for president, he'd have our endorsement and vote! The ladies in the office are excellent.

GreenStone should be proud of the staff they have in the Saginaw branch.

We've dealt with other financial institutions over the years, but the folks in your Saginaw Branch made a very long, drawn-out purchase go smooth from our end. Thanks again for your inquiry and for having a great group of folks working for you.

— Sincerely, Ken and Shelley McGeathy

Summer 2012

PARTNERS 14

DIRECTORS' PERSPECTIVE

Darl Evers All farmers care about the environment, whether they have a formal verification or not. I have started the MAEAP verification process with plans to finish it this year. But the quality of life in my neighborhood has always been important to me. With having livestock and poultry on my farms located inside the village limits, good environment practices and preservation makes everyone happy: you, your neighbors, and those enforcing the law.

With the ever increasing scrutiny around air and water pollution and the environment, it is more urgent and necessary that we all become more mindful of conserving our natural resources and protecting them. I believe I have become even more diligent in doing that in recent years. It is also very important for me to set an example of how to care for the land for the next generation!

Love The Land and It Will Love You Back

Environment preservation is not only important to the general public, it is on the top of the list for the farming community as well. Our producers care about the land, water and air for the coming generations just like Mom’s and Dad’s strive to ensure their children have a better future.

In Michigan, Gov. Rick Snyder has taken a keen interest in the Michigan Agricultural Environmental Assurance Program (MAEAP), with the initiative to have 5,000 MAEAP farm verifications by 2015. Regardless if farms take part in this verification process or not, we asked these directors to share why environmental preservation is imperative to their farm and what steps they are taking to protect it for the future.

15

PARTNERS Summer 2012

DIRECTORS' PERSPECTIVE

Scott Roggenbuck I feel it is very important for farmers to showcase that we are excellent stewards of our soil and water resources. The more we can communicate this to our non-farming neighbors, the better chance we have of avoiding unnecessary regulation.

Therefore, as a Michigan resident, I am very pleased to see Governor Snyder take such an interest in the MAEAP program. My family farm is verified in both cropping and livestock systems.

out what a great job they are already doing, and that they only have to make a few minor adjustments to their operations!

I may be more conscious of the environment than previous generations, but I can’t dismiss the role of technology, either. Today we have Roundup Ready crops that allow us to better utilize cover crops, and GPS variable rate fertilizer capabilities. These technological advancements make us better equipped to utilize less persistent chemistries and grow more food with less fertilizer than ever before.

After having gone through the verification processes, I’m encouraged to tell other farmers that it shouldn’t be a feared process. Many farmers may be surprised when they find

William Stutzman Environmental preservation is not just important to all farmers, it is vitally important to all people everywhere! If we don’t practice good stewardship of the land, air, and water that we have today, we endanger ourselves and all those who follow us.

Our farm became MAEAP verified in 2007. Some of the required practices we were already doing and those that were weren’t, we adopted because they made sense. We realized that all of the practices were long term friendly to protecting and preserving the environment.

Today on our farm we plant our soybeans and wheat strictly no-till to reduce erosion. We grid-soil test, and use variable rate fertilization technology.

Our liquid fertilizer storage tanks are in containment; and our herbicides, insecticides and fungicides, as well as our seeds, are all stored in approved ways.

When we load fertilizer, fuel, and chemicals, we do it on cement pads to avoid contamination of the soil and ground water in the event of a spill.

My grandkids and yours deserve our best efforts to protect and preserve their environment, so I advocate for doing the right thing sooner rather than later!

Summer 2012

PARTNERS 16

GUEST COLUMN

Retirement Does Not Have to be a Dirty Word By: Barbara Dartt When I pose the question, “So, have you thought about retirement?” to agriculture business leaders, it generates raised eyebrows, chuckles, and sometimes, a scornful comeback.

I am coachable. I don’t use that word anymore—retirement —the “R” word. Instead, I say things like, “So, when would you like to be out of day-to-day management?” Or, “Have you thought about what it would be like to back away from decision making?” Those are better questions. More reflective of how key leaders and managers of progressive, growing agricultural businesses think about the evolution of their career. But for many of my clients and industry leaders. They remain just as hard to answer.

This is completely normal. Most senior generation leaders within family-owned businesses have dedicated their career and the majority of their time to building and sustaining the operation.

The farm business takes on a life of its own. It requires intensity, commitment and patience. It produces setbacks, pride and satisfaction... much like raising another child. It can get awfully hard to separate yourself from the business.

Still, many of the same senior generation business leaders who have poured their passion

MOST SENIOR GENERATION LEADERS WITHIN FAMILY-OWNED BUSINESSES HAVE DEDICATED THEIR CAREER AND THE MAJORITY OF THEIR TIME TO BUILDING AND SUSTAINING THE OPERATION

17

PARTNERS Summer 2012

GUEST COLUMN

{3}

SHIFT THE DYNAMIC

into the business and find the “R” word distasteful, have also told their successors (and me, in one-on-one interviews) that their vision is to pass on the business. To see it outlast them; to find a way to disconnect their own identity from that of the business.

How do you solve this paradox of “I’m not sure I see myself backing away” and “I want the business to go on without me”? Here are three steps to get you started.

{1}

DISCOVER AND COMMUNICATE what you really want:

To die with your boots on, or to see your successors carry on the business?

There is nothing wrong with choosing to hang on. Just do it responsibly by being clear with potential successors that you do not plan to relinquish control. They deserve to make decisions about their lives and careers with full knowledge of the potential for management and ownership opportunities.

If you plan to work towards a business transition, consider the next two steps as well.

{2}

ACKNOWLEDGE

how much expertise you have to share.

Most senior generation business leaders make incredibly complex decisions quickly and intuitively because they have seen so much, so many times. That ability can be taken for granted when you compare your decision making process to that of your successors. Find a close friend or advisor (maybe your spouse) and spend a couple hours (or a weekend away) talking through the life of your business. Pull out old pictures. Build a timeline. Take time to appreciate just how far you and the business have come.

of your role from how many phone calls you take in a day to how many you make in a day.

Instead of being the problem solver and crisis manager that others reach out to, move to the role of coach— where you check in with others on their status and progress. And coach successors on how to take advantage of all that expertise you have earned.

I read a great (unattributed) quote last week. “Retire means a new set of tires.

May they take you where you want to go.” Succession is not for the faint of heart—it is the hardest work you will do on your business. However, it could be one of the most rewarding things you will ever do—for your family and for your business.

ABOUT THE AUTHOR Barb Dartt is a Senior Business Consultant with Lookout Ridge Consulting (formerly Salisbury Management Services), a division of AgStar Financial Services, ACA. Barb works with farm families and management teams to help them keep their business healthy and the people happy. Barb can be reached at barb.dartt@lookoutridgeconsulting.com or at 800-663-5608.

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

Summer 2012

PARTNERS 18

3515 West Road East Lansing, MI 48823

Loans to help your farm...

GROW REAL ESTATE LOANS– Ready to expand your operation?

Finance land, farm improvements, agricultural buildings and structures with our flexible lending options.

800-444-FARM

www.greenstonefcs.com