CEO Comments:
New year, New Opportunities A year ago, I was confident when I wrote these comments that by 2022 Covid would have been vanquished, supply chain problems would be a thing of the past, inflation would be under control, and the agricultural economy would be strong. So much for my predictive abilities. One out of four is a bad track record, but at least I got the ag economy one mostly right! 2021 We have all seen the news reports about the latest Covid variant. Covid has truly proven to be a formidable foe and is at the root of many current challenges. Unfortunately, it will likely be with us in some way, shape, or form for years to come. Fortunately, the ag economy fared well despite the head winds it, and most of the general economy, faced through much of 2021. This past year’s net farm income is currently projected to increase by 23.2% over 2020 or 18.7% in inflation adjusted terms. That’s a long way from the 40% plus increase in 2020 over 2019, but not bad considering a nearly 39% drop in “direct government farm payments” in 2021 from 2020. As we talk with our members and begin reviewing
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Winter 2022 — Partners
their financial statements, the overall results support these national projections. Better yields across our territory for nearly all cash crops including sugar beets, plus stronger commodity prices for both crops and protein (including dairy) resulted in relatively strong earnings for much of our portfolio. As I’ve noted before, some of the specialty crops didn’t fare quite as well due to frost and freeze conditions yet, overall, 2021 was a strong year for most of our members. In fact, GreenStone’s credit quality, which is a measure of risk in the portfolio, was at nearly all-time highs (high is good!) and further supports the overall financial success of our members. Loan volume classified as “acceptable” (few to no credit weaknesses) improved from 91.5% at the end of 2020 to 94.8% as of November 30, 2021. Accrual Loan delinquencies remained at an exceptionally low level of 0.17% at the end of 2021. Finally, and probably most notable, was our ability to reverse approximately $13 million of loan loss provisions taken in prior periods because of improved credit conditions. This increased net earnings and bolstered our ability to pay another record setting level of patronage to our members.
