Leader
An AgChoice Farm Credit Member Publication
FALL 2021
Attention young and beginning farmers: Interested in honing your business and fnancial skills?
Navigate the Future with
AgBiz Masters A Learning Series for Young & Beginning Farmers
NEXT CLASS
NEXT CLASS
YEAR 1
NOVEMBER 2021 MARCH 2022 On-demend, Self-paced Online or Text Modules
Megatrends of Agriculture Strategic Business Planning Preparing for Your Lender Constructing a Balance Sheet Constructing an Income Statement & Cash Flow Projection
YEAR 2
Understanding Lending Decisions Farm Business Management Factors & Benchmarks Growth & Transition Management Personal Financial Management Communications, Ethics & Leadership
TO LEARN MORE AND REGISTER ONLINE, VISIT AGBIZMASTERS.COM Registration is easy! Deadline is October 31, 2021.
is published quarterly for stockholders, customer- owners, directors and friends of AgChoice Farm Credit. PRESIDENT Darrell L. Curtis BOARD OF DIRECTORS Richard A. Allen, Chairman Christine Waddell, Vice Chairman Kevin D. Grim Steven H. Gross, Jr. William K. Jackson Paul Schmidt Richard D. Shuman Dennis B. Spangler Charles F. Ulmer Shawn D. Wolfnger Samuel BowerCraft, Appointed - Outside Director Larry A. Seibert, Appointed - Outside Director Kristi Yacono, Appointed - Outside Director EDITOR Carrie Bomgardner PUBLISHER AgFirst Farm Credit Bank PUBLISHING DIRECTOR Juan Silvera DESIGNERS Joey Ayer Jessica Deas Phereby Derrick PRINTER Sun Solutions Address changes, questions or comments related to the Leader may be directed to: Carrie Bomgardner | AgChoice Leader Editor AgChoice Farm Credit 300 Winding Creek Blvd. Mechanicsburg, PA 17050 phone: 800 -349 -3568 ext. 6019 email: cbomgardner@agchoice.com Requests for copies of our fnancial reports and inquiries related to internal control, auditing and accounting should be directed to: Ann Metzler | Audit Committee Recording Secretary AgChoice Farm Credit 1434 Seven Valleys Rd. | York, PA 17404 phone: 800 -822-1218 ext. 4206 email: ametzler@agchoice.com
Do You Suspect Fraud?
Reports of suspected or actual wrongdoing involving the Association, its employees, directors or agents can be made anonymously and confdentially through the Association’s whistleblower hotline (Convercent) at 1-844 -850 - 6491 or online at www.convercent.com/report.
AT AGCHOICE, THE “CHOICE” IS YOURS Exercise your right to vote for the AgChoice Farm Credit Board of Directors and Nominating Committee candidates of your choice! The voting process is simple: • Consult the balloting information that you will receive in a separate mailing from AgChoice Farm Credit; • Read the profles of the candidates; • Vote for one candidate in each region and fip the ballot over; • Vote for the Nominating Committee members and • Return your ballot in the provided envelope. Ballots will be mailed November 5, and your ballot must be postmarked by November 26!
In this issue... Message from the President Association News ................
Feature Story
Incentives Reach Young Farmers .................
4
Feature Story
es (Certifcates), issued prior to October 6, 1988, are ally protected against loss by provisions of the Act. These visions generally require that in retiring such pre-October 6
Accounting Services and Tax Planning “Make Life Easier” .................
6
, the Association shall retire the Stock and Participation es at their par or face value. However, these provisions e not applicable to Stock or Participation Certifcates issued tober 5, 1988. Stock and Participation Certifcates er October 5, 1988, as a condition of obtaining a loan, including stock issued in connection with loan assumptions and efnancings, are an investment in the Association that is at risk and not a compensating balance. tock and Participation Certifcates Under the 1987 Act, borrowers from the Association are ed by law to make a minimum purchase of Voting Stock ticipation Certifcates in the Association in the amount of $1,000 or 2 percent of the loan, whichever is less. Purchases above the minimum required by law may be established by the Board ors of the Association. Currently, the Association requires the minimum purchase as outlined above. oting stock issued by the Association is called Class C Voting oting Stock) and is generally issued only to farmers, , and producers or harvesters of aquatic products. Other persons who are eligible to borrow from or do business with the tion, but who are not eligible to own Stock, must purchase tion Certifcates, which are issued on essentially the same
Holders of Participation Certifcates generally have no v rights. However, in order for the Association to issue pr stock, holders of Participation Certifcates are entitled t on its authorization. The votes on preferred stock issues ar weighted according to the number of shares or certifca and approval must be by a majority of each equity class v In all other respects, Stock and Participation Certifca substantially the same rights and restrictions. The current bylaws of the Association provide that dividends ma be paid on Stock or Participation Certifcates with the appr of the Association’s Board of Directors. Under the 1987 A dividends may not be declared if, after or due to such ac permanent capital of the Association would thereafter fail t the minimum capital adequacy standards established by the FC The Association has a frst lien on the Voting Stock or Participa Certifcates held by a member-borrower as additional secur for the member’s loan. If the member defaults, the value of the member’s investment (book value not to exceed par v face amount) may be applied, subject to the discretion of the Board of Directors and applicable regulations of the Far Administration, against the balance due on the loan. member’s Stock or Certifcates are transferred, they are still subjec to the Association’s lien. In any event, Stock and Certifca transferable only to persons eligible to purchase such directly from the Association.
5
New Member Disclosure Statement
...............
Fall 2021 | AgChoice Farm Credit > 3
8
Message from the President
DARRELL CURTIS
111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111
W
elcome to the fall issue of our Leader magazine. You may notice this issue has more pages than normal. This is because our notice to stockholders concerning your investment is included to ensure all cooperative customer-owners have an opportunity to read and review the disclosure.
As the Association continues to show consistent growth and solid earnings, we can reinvest in agriculture and our rural communities with programs and incentives. In this issue, you will read about the Zimmerman family, young, beginning
and small (YBS) farmers, who benefted from both our new YBS programs and Growing Together incentives launched earlier this year.
on the AgChoice Board of Directors when you receive your ballot. Enjoy the harvest season!
Fall signals the start of tax planning season. The Workman family shares their experiences with our accounting services team and their tax planning expertise. Finally, I encourage you to review our Annual Meeting Information Statement cover. As a member of the cooperative, exercise your right to vote for customer-owners to represent you
Darrell L. Curtis President and CEO
Association News Congratulations to our top three Calendar Winners! Watch for the calendars this November.
Wayne Mummert, York County
4 << Fall 2021 | AgChoice Farm Credit
Maureen Toal, Cumberland County
Justine Starrick, Luzerne County
Feature Story
Incentives Reach Young Farmers
I
n their second year of Twin Hollow farm ownership, James and Eunice Zimmerman of Union County, continue to learn and improve best practices for vegetable, fower and chicken production. They also learned about incentives ofered by AgChoice to help young farmers when they recently refnanced their loan.
“I think the appraisal fee and interest rate reductions are a great way for AgChoice to reach out and help young farmers,” shared James. “I was pleased with the ofers.” James and Eunice also qualifed for a special incentive of $500 savings on any loan greater than $100,000 through December 31.* James and Eunice purchased the 23-acre farm in November 2019 from James’ parents and took over the existing greenhouse and chicken businesses. “I grain farm and grow tomatoes and peppers in our two produce high tunnel greenhouses,” James said. “We also grow feld pumpkins and cantaloupes.” Twin Hollow Farm vegetables sell at the Buffalo Valley Produce Auction. In the 7,100 square feet of greenhouses, the couple grows annual fowers including potted
fowers and hanging baskets, wholesaling to local retailers. “We start our greenhouse work the frst week of February,” explained Eunice. “We begin some plants from seed and also purchase plugs.” Eunice continued, “While I worked at a greenhouse, prior to getting married, it’s entirely diferent when you have your own business. Experience is teaching me it’s critical to not water the plants too much or too little. It’s a lot of work to make it all happen.”
JAMES & EUNICE ZIMMERMAN
TWIN HOLLOW
James noted that he’s learning how to better control pests and diseases in the flower greenhouses and vegetable high tunnels each growing season. In addition to the vegetable and flower businesses, the farm also includes a 50’ x 400’ broiler barn. “We will raise about fve and a half focks each year for Chick 2 Chicken,” James said. In the future, James and Eunice look forward to passing their values and diversifed experiences growing crops, vegetables, fowers and poultry to their three young children. Continued Next Page
Fall 2021 | AgChoice Farm Credit > 5
Incentives Reach Young Farmers Continued AgChoice Incentive Programs for Young, Beginning and Small Farmers Loan & Service Savings
Educational Opportunities
AgChoice loans: Up to 0.25% rate discount, up to $250 off loan origination fees, relaxed credit standards and coverage of first year fees for FSA or other government loan guarantee.
Offerings: Two-year AgBiz Masters blended learning program available to hone your business and financial management skills, plus AgBiz Basics online, a two-hour virtual program to assist with your farm business plan.
AgChoice services: Up to $500 off AgChoice appraisal, record keeping, tax and business consulting services.
Discounts: Up to $250 off AgBiz program or other industry-provided educational opportunity.
*Save up to $500 on new money transactions $100,000 or greater. Limited time ofer covers loan origination and/or application fees on loans. Third party fees (appraisal, title, etc.), Real estate taxes, transfer tax and stock investment are not eligible. Application deadline is December 31, 2021. Credit is subject to approval.
Feature Story
Photos courtesy of the Workman family.
Accounting Services and Tax Planning “Make Life Easier”
F
or Ed and Missi Workman, York County, a hay making side hustle eventually blossomed into Z & Z Acres Cattle & Hay LLC. “After we frst married, we lived on a 26-acre farmette given to us by Ed’s parents,” said Missi. “When we had our frst child, I wanted to fnd a way to stay at home.”
6 < Fall 2021 | AgChoice Farm Credit
Ed, a medical professional, decided to hay the property to help cover annual taxes and allow Missi to leave her career. “We made 500 hay bales that frst year,” Missi remembered. “We thought that was enormous!” Eventually, that farmette grew to include 10 beef cows, and the family began renting additional
acres for the hay business. For seven years, Ed and Missi also owned a 130-acre turkey farm with employees. Surrounded by agriculture, the couple’s children, Zach and Zoey, graduated from high school and each enrolled at Penn State.
Ironically, after a year of Penn State studies, and in Zoey’s case a Montana Angus ranch internship, they both independently discovered their real passion was farming. Zach gravitated to equipment and the hay business, while Zoey loved the cattle. “We decided to invest their college education money into their career choices,” said Missi. “We bought a 120-acre farm with two houses.” Business Growth Requires New Accounting Solutions “I always took care of the books,” Missi explained. “But I didn’t have an accounting degree. I pooled my resources and learned QuickBooks software on my own. As the farming business expanded though, the accounting was over my head. It wasn’t working for our family.” Missi reached out to her lender who recommended a large, local accounting frm. “It was expensive, the taxes were taking forever and no one understood the farming business,” noted Missi. “I was frustrated to tears.” In early 2020, Missy visited the AgChoice website to learn more about the cooperative’s accounting services. “I knew I needed farmeroriented accounting,” continued Missi. “I submitted a web form and an accounting ofcer immediately reached out to me.” “Our AgChoice accounting ofcer has been a lifesaver,” she said. “I’m pleased with how quick he gets back to me and how invested he is in our farm. He comes to the house, we look at the books and he shows me things in QuickBooks and explains the ‘why’ to me.”
Tax Planning When they bought the farm, Ed, Missi, Zach and Zoey initially each owned 25% of the farm as an LLC. To qualify for a USDA young farmer loan and help Ed and Missi tax plan, Zach and Zoey needed to own the farm outright. “Ultimately, our end goal always was to pass the farm onto the kids while we could watch and enjoy,” explained Missi. “We are forward thinkers as is our accounting ofcer. He helped us fnd a way.”
“I’m the family chef, grass mower, photographer, housekeeper of three homes and bookkeeper,” laughed Missi. “I don’t have time to be looking at numbers all day. I dreaded book work. Now, I know what I have to do and I do it. AgChoice accounting made my life a lot easier!”
“We came off the LLC and signed the farm over to Zach and Zoey,” she continued. “Today, they are 50/50 owners.” Zach and Zoey farm 750 hay acres and raise 100 primarily Angus cow-calf pairs. “While we still financially help the farm, our accounting ofcer helps us navigate and plan for tax implications,” explained Missi. “As an example, Ed and I rent a house from our kids.” Tax planning also was key with the passing of Missi’s parents. “Our accounting ofcer was very knowledgeable about navigating estate issues and the associated tax events,” said Missi.
Fall 2021 | AgChoice Farm Credit > 7
GROW YOUR FUTURE Receive
$500 off your new loan of more than $100,000!*
If you’re ready to make your dream of living in the country a reality, now’s the time to fnance with AgChoice.
*Save up to $500 on new money transactions $100,000 or greater. Limited time offer covers loan origination and/or application fees on loans. Third party fees (appraisal, title, etc.), real estate taxes, transfer tax and stock investment are not eligible. Application deadline is December 31, 2021. Credit is subject to approval.
6 AgChoice ~., Farm Credit
HOME & LAND LOANS
CONSTRUCTION LOANS
♦
♦
♦
EQUIPMENT LOANS
♦
♦
♦
♦
♦
♦
NEW & SMALL FARM LOANS
800.998.5557 | Visit us at agchoice.com
N M L S #645693