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insidenews & Views 2 ceO letter 3 cover Story 4
loan tips 10 Photo contest 11OSHa Dairy inspections 12 Webinar Series 13
Sharing their time 14 cSa Profile 15 consulting Profile 16 tax Prep Profile 17
Washington Update 18 community Support 20
learning the ropes
Farming’s next generation prepares to lead
news
&views
what’s new at the Movies?
funding research to advance ne agriculture
Do you have a generational transfer plan in place? Are you confident that it will ensure that your farm’s senior generation will be comfortable in retirement and the younger generation will be prepared for ownership and management of the business?
In “Generational Transfers for Farm Businesses,” business consultant Jon Jaffe takes you through some important steps to understanding the transition process for family businesses. In this five-minute video, Jon explains the challenges that many farm families face in transitioning the business to the next generation. He points out how the generations often have different views on the future of the business and explains how working with an outside consultant can help both generations separate family relationships from their business relationships.
To view this video, go to FarmCreditEast.com/GenerationalTransfer.
This summer, Farm Credit East and CoBank joined New York dairy farmer Sheldon Brown to contribute $600,000 to Cornell University’s ag research and education programs.
The gift will support a faculty fellowship focused on agricultural sustainability, including production practices and opportunities for agricultural growth given increased interest in local foods. In addition, a portion will be used to fund student scholarships.
Farm Credit East and CoBank each committed $250,000 to Cornell, to be paid over the next five years. Brown, who graduated from Cornell in 1968 and previously served on the boards of both organizations, committed $100,000.
“We believe in the future of Northeast agriculture and the need for strong
education, extension and research programs that support success in the farm community,” said Farm Credit East’s Bill Lipinski. “We are pleased to support this unique position because it will help expand opportunities for agriculture in our region.”
Brown, who owns and operates a dairy farm in Salem, N.Y., said he made the contribution out of gratitude for the benefits he received from his Cornell ed-ucation. “Cornell helped me understand that agriculture is and always will be a knowledge industry,” he said. “It is vital that we continue to promote research and education in the field of agriculture in order to maintain the competitive advantage that our nation has built.”
For more, go to FarmCreditEast.com/CornellGift.
Farmcrediteast.com
Bill Lipinski, Farm Credit East CEO; Sheldon Brown, Cornell class of ’68; Kathryn Boor, Ron-ald P. Lynch Dean of the College of Agriculture and Life Sciences at Cornell University; and Scott Markham, CoBank Board member
2 F i n a n c i a l P a r t n e r
CeO’s Message
Bill Lipinski, CEO, Farm Credit East
3W i n t e r 2 0 1 3
I am excited to announce that the
stockholders of Farm Credit East and Farm
Credit of Maine have overwhelmingly
voted to merge our two leading agricul-
tural credit associations.
The merger, which takes effect January
1, 2014, is the culmination of strategic
planning initiatives in both associations
to sustain growth and customer value for
Farm Credit. With this merger comes new
opportunities that include a tremendous
team of Maine employees who will
“deepen our bench” in a variety of job
areas. We will work hard to ensure that
significant financial benefits accrue to our
expanded family of stockholders in the
next several years.
Because both ACAs have had excellent
years and are financially and operationally
strong, the timing for this merger could
not be better. This is a strategic
opportunity to position Farm Credit in
the Northeast for future change and to
maintain Northeast agriculture’s continued
access to global money markets.
In the words of Farm Credit East Board
Chairman Andy Gilbert: “If your business
is not moving forward, then you’re falling
behind.” That principle, in our view, is as
true for our financial cooperative as it is
for any individual business.
The Board challenges me to create
opportunities for our customers as well
as for our employees. The merger of Farm
Credit East and Farm Credit of Maine
achieves many of the Board’s goals. That
is, our merged association will create the
opportunity for enhanced earnings, port-
folio diversification and a stronger capital
base. It will also offer enhanced member
service through an expanded pool of
talent and experience. In 2014, we will
continue to build on those goals as well as
move forward on other positive initiatives
that provide high-value customer service
and expand our diversity of stakeholder
groups.
We know that agriculture goes
through cycles. We’ve demonstrated our
commitment for almost 100 years to fund
agriculture through every cycle. As our
customers tell us, “When you’re in agricul-
ture for keeps, it’s good to know that your
lender is, too.”
Our dedication to providing you with
a reliable source of credit and financial
services will never change. Both boards
look forward to bringing together best-in-
class credit and financial services teams to
deliver long-term value for our customer-
owners and for future generations of
Northeast agriculture. This next chapter
in the Farm Credit East story ensures that
your financial cooperative remains strong
within our marketplace and retains a re-
spected place at the table in national Farm
Credit System discussions.
With this vote, customers of both as-
sociations have expressed their confidence
and trust in the Board and management
of Farm Credit East. Over the next few
years, we will continue to repay that trust
and achieve our goal of “promises made,
promises kept” to our members.
… if your business is not moving forward,
then you’re falling behind.
the Maine pointMerger of two associations brings new opportunities
“
”
4 F i n a n c i a l P a r t n e r
“ … i learned that leadership is really about knowing your strengths and weaknesses and showing confidence in your employees.”BEn HuLLHull Forest ProductsPomfret Center, Conn.
c o v e r s t o r Y
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For young farmers ready to take the reins of the family business,
Dad and Mom are invaluable in learning the essentials of operating a
farm. But in the ever-changing world of agricultural business, there’s
no such thing as knowing too much about growing a successful farm
operation.
Farm Credit East’s GenerationNext program deepens young
farmers’ knowledge and helps them hone their management skills.
Held in three one-day sessions over three months, GenerationNext
prepares farmers from the ages of 20 to 35 to effectively manage
employees, finances, marketing and risk to their business in order to
become more effective owners.
Recently, four graduates of the GenerationNext program stopped
by the Farm Credit East coffee shop to chat about their experiences
in joining the family business and how the program has made them
more effective managers.
learning the ropesFarming’s next generation prepares to lead
6 F i n a n c i a l P a r t n e r
Michele DuttonBusiness: Sherman Farm, LLC
Location: East Conway, N.H.
Description: “We are an ag retail business that sells farm stand products, vegetables, milk and meat. We grow everything from brussels sprouts to tomatoes and operate six heated greenhouses and seven additional greenhouses for tomato pro-duction. We retail between 24,000 and 30,000 pounds of tomatoes annually. We grow our own beef and pork and sell milk that we glass bottle ourselves.”
Years in business: “All my life and for five years full time”
Position: “I am the head controller and chief financial officer. I also focus on marketing. We do a lot of community outreach in schools to give the public a greater understanding of agriculture.”
Although Ben Hull of Hull Forest Products in Pomfret
Center, Conn., felt comfortable with his knowledge of business
operations, he saw the GenerationNext program as a chance
to increase his comfort with bookkeeping. “I thought it would
be worthwhile as a refresher, but I also needed more depth of
knowledge with accounting concepts,” he acknowledged.
Developing solid accounting and budgetary practices was at
the top of the list for Kristopher Kane of 21 Brix Winery in Port-
land, N.Y. “My mother has always done our farm accounting,” he
said. “But I wanted to see how her system could be utilized to its
full extent.”
Brendan Moquin has been involved in the cranberry-growing
business for as long as he can recall. He now serves as the as-
sistant controller and financial analyst of Morse Brothers, Inc., in
North Easton, Mass. His focus in the GenerationNext program
was on developing solid communication skills to bring back to
the bog. “My biggest challenge is learning how to facilitate com-
munication between the generations in order to help keep the
company running smoothly.”
For Michele Dutton, of Sherman Farms in Conway, N.H.,
the seminars allowed her to think about good leadership on a
day-to-day level. “I was taking over the business end of our farm
from my grandmother and even though we all think that we are
great leaders, I realized that I didn’t understand all aspects of
leadership.” With an entire day’s program dedicated to leader-
ship and employee management, Michele walked away with
plenty of tips to put into practice.
let tHe nUmberS DO tHe talkingAs with most industries, good data has become the name of
the game in agriculture. Michele learned how to do so in practi-
cal terms through the GenerationNext program. “Now I can
use a profit and loss statement to say, ‘This is what we did this
month,’ and explain to others what’s behind those numbers,”
she said. And gaining the confidence to do so goes beyond
simply providing rationale — it has also improved communica-
tion within the family business. “It’s nice to be able to explain
“ generationNext provided me with the education and facts to show that i know what i’m talking about.”MiCHELE DuttOnSherman Farms, LLCEast Conway, n.H.
c o v e r s t o r Y
7W i n t e r 2 0 1 3
to my brother why we can’t get new tires or a new tractor based
on the financial picture. I can say when would be a better time.
It’s made us a more cohesive unit because we understand each
other’s part of the business.”
Knowing how to read the company’s data has also helped
Michele and her family bridge the generation gap. “Coming into
a business as a member of the third generation, the first and sec-
ond generation can still see you as their kid,” she said. “Genera-
tionNext provided me with the education and facts to show that
I know what I’m talking about.”
Playing tHe team tO tHeir beSt aDVantageA key aspect of good management lies in knowing when
to trust the team. Kris acknowledged that the GenerationNext
program taught him the value of empowering his employees
and delegating responsibility. “You tend to think that a leader
goes out and does the task. From this class, I learned that leader-
ship is really about knowing your strengths and weaknesses and
showing confidence in your employees,” he said. “Now when I
hire, I look for people with strengths I don’t have, and surround
myself with a team that I feel comfortable delegating to.”
Ben agreed, adding that his experience with GenerationNext
allowed him to diversify his leadership skills. “I learned that a
leader needs to adapt to the situation. Is this my employee’s first
job or am I directing a 35-year veteran? It requires very differ-
ent leadership styles,” he explained. “A veteran may know more
than I do, so I lead in a more consultative, collaborative way.”
Ben also discovered that good employee management begins
well before hiring. “The program helped me to improve my
development of job descriptions, which I call performance
profiles. If employees are asking you what to do, you probably
haven’t written an adequate description of what is expected of
them.”
talking it tHrOUgHKeeping the lines of communication open can be a challenge
in any business, never mind one that sprawls over 11 locations.
Brendan learned that it was a challenge that Morse Brothers,
Inc. couldn’t ignore. “My biggest lesson from GenerationNext
was the importance of employee buy-in. So we started Monday
morning bog meetings for the foremen. The first few were a
struggle, but before long the foremen would come to the meet-
ings with lists of upgrades or inefficiencies,” he said. “I could see
that they started to work together more effectively and improve
how they kept their properties up — which resulted in a better
crop and a better bottom line.”
Kris also learned the value of good communication. “Every
morning, I work with our production team to compare how we
are doing against our weekly goals, and I ask the team how we
can make those goals,” he said. Kris also emphasized the need
for follow-up, recognizing employees’ efforts with a thank-you
note, pizza party or even a group ski-trip. “It’s good for morale
and we all know it’s good for the business.”
Michele agreed. “Like Kris, we make our employees feel
that they are part of the family. We just started sharing our sales
Ben Hull Business name: Hull Forest Products
Description: “We are a hardwood saw mill and a forest land management service. We conserve for-ests through the sale of conservation easements to organizations like the Nature Conservancy. We have 8,500 acres under conservation easement and about 13,000 acres of company woodlands in Massachusetts, Connecticut and Maine. We also custom manufacture a variety of premium flooring products for wholesale distribution and retail markets.”
Location: Pomfret Center, Conn.
Years in business: “Since I could hold a shovel”
Position: “I focus on marketing and sales as well as developing new revenue streams for our wide-plank flooring products, energy wood and export log sales.”
MiCHELE DuttOnSherman Farms, LLCEast Conway, n.H.
8 F i n a n c i a l P a r t n e r
numbers for the month with employees. We say, “This is what
we did for August of last year; how can we do more?” Before
GenNext, we were hesitant to share our numbers with our staff.
Letting go of that is hard, but once you do, it all blossoms from
there.”
gOOD management, gOOD balanceEach member of our coffee-shop talk agreed that Generation-
Next helped him or her develop the management skills they
need to work smarter, not harder — and that translates to a
better work/life balance. “Time management is my biggest chal-
lenge. I have a 17-month-old and a newborn, run two businesses
and work on the farm with my father as he and my mother step
back a little,” Kris explained. “I worry how I will manage all of
these responsibilities, but the answer is found in education like
GenerationNext, where I can network with others in similar
situations.”
Brendan echoed Kris’s praise: “I would definitely take the
class again; knowledge is power.”
Ben added that learning good hiring skills has allowed him
to bring more people on his team which, in turn, frees him up
to spend more time with his wife and three children.
Kris also noted that what he learned from GenerationNext
has proven invaluable. “You won’t find a better program for its
value, or one that brings more confidence to your business,” he
said. On that note, our group took their last sip of joe and head-
ed back to the field, bog, forest and vineyard, respectively. ◆
Kristopher Kane Business: 21 Brix Winery, part of Olde Chautauqua Farms and Olde Chautauqua Vineyards
Description: “We are a 300-acre grape-growing operation with 18 acres of pick-your-own cherries and asparagus.”
Location: Portland, N.Y.
Years in business: “I have been in the business since I was about seven years old, trimming, tying and pick-ing grapes.”
Responsibilities: “I opened the winery in 2011 and eventually want to vertically integrate the two busi-nesses by utilizing most of the fruit from our farm in the wine and opening different channels to sell grapes. I manage and run the winery and am responsible for production management, product and equipment acquisition all the way to front-door sales.”
“ You won’t find a better program for its value, or one that brings more confidence to your business.”KRiS KanE21 Brix WineryPortland, n.Y.
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c o v e r s t o r Y
Mind the (generation) gapBuilding a program for today’s young farmers
With each young farmer that Bill Martin met as a former loan officer and branch manager and today as a Farm Credit East business consul-tant, the problems begin to sound the same: issues with work/life balance, discomfort with financial data and difficulty in maintaining good communication among staff and family members — to name a few.
Along with others at Farm Credit East, Bill and a team of business consultants and branch managers decided to use what they were hearing in the field to promote the GenerationNext program, designed to prepare young farmers for the early stages of leadership and management and help them lay the groundwork for future years of profitability. Not only does the program get participants ready for future opportunities in their business, it helps give previous generations confidence in the abilities and know-how of the up-and-comers.
The program goes beyond providing basic training and best practices in operating an ag business. It also furnishes invaluable networking opportunities and the chance for young farmers to hear that they’re not “the only one” when faced with a particular chal-lenge — and how to best tackle it.
Bill and other organizers spread the GenerationNext program over three months with a one-month break between each of the three sessions. According to Bill, “This allows participants to absorb and apply what they’ve learned about leadership, management and labor.”
If you or a young farmer you know would benefit from in-depth training in running an ag business, go to FarmCreditEast.com/GenerationNext to learn more. Or contact your local branch to find out about the program closest to you.
Brendan MoquinBusiness: Morse Brothers, Inc.
Description: “Morse Brothers owns about 380 acres of cranberries in 11 different Massachusetts towns and 380 acres in Quebec. The company packages fresh fruit for Ocean Spray and supplies stores nationwide.”
Location: North Easton, Mass.
Years with Morse Brothers: 3 years
active in the cranberry industry: “Since I was born.”
Responsibilities: “I am the assistant controller and financial analyst. I work in a variety of areas, from product development, financial planning and forecasting to field work with the guys during harvest season.”
“ My biggest lesson from generationNext was the importance of employee buy-in.”BREnDan MOquinMorse Brothers, inc.north Easton, Mass.
10 F i n a n c i a l P a r t n e r
Farm Credit East customers know how to work with loan of-
ficers on their credit needs. But the next generation coming along
may not have that knowledge. We encourage Farm Credit East
members to share this article with our future members — your
children and others who will be your farm’s next generation.
Applying for credit for the first time is a big step. First-time bor-
rowing is often a sign of a business in transition, such as one that’s
just getting started, one that’s outgrown its start-up capital or
perhaps one that’s on the verge of failing. Regardless of the need,
first-time borrowing can be challenging for both the loan applicant
and the lender although it doesn’t have to be if you keep these tips
in mind:
• Know your industry. Come prepared to show your lender
that you understand your business and have the knowledge
that you need to be successful.
• Understand your financial position. The lender’s analysis of
your financial statements should not surprise you. Be ready
to discuss your business profitability and how you acquired
your equity and also be ready to demonstrate that you un-
derstand what effect the borrowed funds will have on your
financials. Keep your income and expense records up to date
and prepare your projections in advance.
• Borrow with purpose and have a strategy. Tie your request
to a specific project or purpose. Demonstrate to the lender
how your request will benefit the business and anticipate
any needs you may have over the next 12 months. Coming
back to the lender multiple times doesn’t inspire trust or
confidence in your overall business strategy.
• Be prepared to offer collateral. This demonstrates that you
are committed to being successful and are willing to put
skin in the game.
• Have a back-up plan. Be prepared to offer a cosigner or to
provide additional collateral if your original request does not
meet underwriting standards. Keep in mind though that a
cosigner is only as good as his or her ability to repay the loan
on your behalf.
• Plan to communicate with your lender — even after your
loan is approved. Keep him or her informed of changes in
your strategy, challenges that you are facing and how your
business results compare to what you anticipated. No sur-
prise lending works well for both the borrower and lender.
• Start early. This doesn’t mean giving your lender extra time
to review your request, even though that is helpful. Be aware
that every action is an opportunity to build your argument
either for or against your creditworthiness. Examples range
from how you manage your credit card debt to how well
you honor your suppliers’ terms or even to whether you
return your neighbor’s equipment on time. Your actions and
how you manage your business relationships go a long way
toward building your reputation as a good risk.
Mike Haycook vice president and branch manager
“ Be aware that every action is an opportunity to build your argument either for or against your creditworthiness.”
tips for first-tiMe loan applicants
“ We encourage you to share this article with ... your farm’s next generation.”
cOngratUlatiOnS
11W i n t e r 2 0 1 3
Each year, Farm Credit East holds our
annual contest for talented photographers
to showcase the diversity of agricultural
operations across the Northeast and life in
the country during all seasons of the year.
More than 700 photos were submitted
during 2013, and our team had quite a
task picking 50 photos for our 2014
Agricultural Views Calendar.
What made each shot a winner?
Technical quality, clarity and composition,
of course, but we also looked for photos
that captured a unique view of Northeast
farming, horticulture, forestry and
commercial fishing or that celebrated
country life across New England, New
York or New Jersey.
We send our sincere thanks to all the
talented photographers who participated
in the calendar contest. Because of your
work, we will very proudly have our calen-
dar displayed in homes and on office walls
across the Northeast in 2014.
We have calendars available in our
branches, so stop by and take one home or
simply enjoy the winning photos on our
website at FarmCreditEast.com/Calendar.
tO all yOU SHUtterbUgSWe hope that you keep getting out
there with your cameras, capturing photos
during every season around the farm,
forest, greenhouse or dock. Go ahead and
dust off your digital cameras during every
month — even the cold winter ones — and
upload your best work to our website.
tO OUr PHOtO calenDar cOnteSt WinnerS
And thank you to all who
participated
12 F i n a n c i a l P a r t n e r
The Federal Occupational Safety and Health Administration (OSHA) plans to target
New York dairy farms for inspection starting sometime in 2014. Could your farm be
targeted? And, if so, are you ready for an OSHA inspection?
The initiative will focus on random, unannounced compliance inspections of dairy
farms. Although safety is important for all farm operations at all times, dairy farms
that could be targeted need to get ready to avoid being caught off guard.
WHat yOU can DO nOWOSHA inspections can be painful, but they don’t have to be. Here are a few tips to
help you prepare:
• Know if you fall under OSHA jurisdiction. If an OSHA inspector shows up at
your farm, first determine if the farm is eligible for inspection. If not, inspectors
will depart immediately.
• Go through your farm with a safety mindset and correct any hazards. Use the
“Dairy Dozen” as a handy checklist to help you prepare. Be aware that record-
keeping of employee training is as important as the training itself.
• Designate a company representative (and possibly a backup person) who can in-
teract with inspectors in case the owner is not available. Since most inspections
are unannounced, a designated company representative can keep the inspection
“on track” and avoid an aimless walk around your facility.
• Conduct safety training and keep records of your training. Notify employees
that they have the right to speak or not speak with OSHA inspectors.
• Go to FarmCreditEast.com/Webinars to view playbacks and other presentation
materials from webinars that we cohosted on this subject with Northeast Dairy
Producers Association (NEDPA), New York Farm Bureau (NYFB), New York
Center for Agricultural Medicine and Health (NYCAMH) and Cornell’s
PRO-DAIRY program. They will answer many of your questions and help
you sort out what you can expect:
• Understanding OSHA Requirements for Dairy Farm Businesses
• OSHA Compliance: What Farm Businesses Need to Know
cOUlD yOUr Farm be targeteD?Dairy farms subject to random inspections are those that:
• Have had more than 10 employees, not including immediate family members, at
any time during the past 12 months preceding the day an inspector shows up.
Note that a part-time employee counts as one employee for this purpose.
• Or have provided housing to temporary labor (even one person), at any time
during the past 12 months.
Farms that do not fall into the guideline categories are not subject to inspection.
By the way, OSHA inspectors do not enforce immigration law and will not ask you or
your employees about immigration status.
THe DairY DOzeN:
dairY farMers: are You prepared for an osha inspection?
12 areas of Concern for OsHa
1. Manure storage facilities and collection structures
2. Dairy bull and cow behavior/worker positioning
3. Electrical systems
4. Skid-steer loader operation
5. Tractor operation
6. Guarding of power takeoffs (PTOs)
7. Guarding of other power transmission and functional components
8. Hazard energy control while performing servicing and maintenance of equipment
9. Hazard communication
10. Confined spaces
11. Horizontal bunker silos
12. Noise
“ NYCAMH, NEDPA, PRO-DAIRY and NYFB have formed an OSHA Workgroup to help prepare farms for OSHA’s proposed Local Emphasis Program for dairy farms. The goal is to help the dairy industry by communicat-ing with OSHA and developing and distributing information to address OSHA’s Dairy Dozen target areas of inspection on New York’s dairy farms. The workgroup is coordinating on-farm and off-farm meetings to assist farm owners and management staff better prepare for and understand rights and obligations under the OSHA inspec-tion process. Farm Credit East is also an important partner in this process.”
Karl Czymmek
Senior Extension associate
Cornell university
PRO-DaiRY Program
13W i n t e r 2 0 1 3
areas of Concern for OsHa
HealtHcare reFOrm anD yOUr bUSineSStuesday, December 17, 201310:00 a.m. to 11:30 a.m.
The Affordable Care Act, or Obamacare, is the most
comprehensive overhaul of our healthcare system in a
generation. New provisions of the law will take effect in
2014 and 2015. This webinar, featuring labor law attorney
Robert Noonan, will cover what farm businesses need
to know to comply with the law. Although the employer
mandate has been put off until 2015, there are still things
you need to know for this year.
2014 Dairy OUtlOOkFriday, January 17, 201410:00 a.m. to 12 noon
The 2014 Dairy Outlook webinar will look ahead to
2014 and what’s coming in dairy economics and regula-
tion. This webinar will feature: Mark Stephenson, dairy
economist with the University of Wisconsin; reaction
from Farm Credit East dairy consultants; and an environ-
mental update from Karl Czymmek, Cornell University.
2014 agricUltUral ecOnOmic OUtlOOk anD ag labOr UPDatethursday, February 13, 201410:00 a.m. to 12 noon
This webinar will look at agricultural markets in
2014 and what the road ahead looks like. Following will
be an agricultural labor update, including a look at the
status of the H-2A program. Presenters will be Terry Barr,
economist with CoBank, and Monte Lake, attorney and
agricultural labor expert.
naVigating tHe grant PrOceSSthursday, February 27, 201410:00 a.m. to 12 noon
This webinar will provide answers to questions about
the grant process. For example: What kinds of grants are
available to Northeast producers? Who funds them? What
application processes are like? What can farmers apply
for on their own and when should they engage a grant
writer? What services does Farm Credit East provide?
This webinar features Farm Credit East consultant Nathan
Rudgers.
Fce Financial reSUltS anD neW initiatiVeStuesday, March 18, 201410:30 a.m.
Farm Credit East CEO Bill Lipinski will present an
overview of the association’s financial results for 2013.
tHe nOrtHeaSt Dairy Farm SUmmary releaSe tBD, april 2014
Chris Laughton, Farm Credit East director of Knowl-
edge Exchange, will present the results of the Northeast
Dairy Farm Summary, otherwise known as the “Blue
Book.”
the Farm Credit East Winter Webinar Series presents information about critical topics for today’s progressive agricultural, forest products and commercial fishing businesses. all webinars are
live, free and sponsored by Farm Credit East’s Knowledge Exchange. if you miss a webinar, you can later view it, at your convenience, on the members-only section of our website.
To register for each of the following webinars, go to FarmCreditEast.com/Webinars.
Winter weBinar series
14 F i n a n c i a l P a r t n e r
Sharingtheir time In the spirit of agricultural cooperatives, Farm Credit East employees have been giving back to their local communities for almost 100 years. Here is a small sampling of how some employees contribute.
Jan BitterVice president and branch manager, Cortland, n.Y. Steering committee, Northeast Dairy Challenge
“Every fall, more than 100 dairy
science students from 14 colleges and uni-
versities across the Northeast gather for
the Northeast Dairy Challenge. Students
work in mixed-university teams to solve
real-world dairy farm situations that they
later present to the farm family.
“The gathering of the best and bright-
est among future northeastern dairy leaders is run entirely by
volunteers, including agribusiness people, academics, farmers
and students. My 10 years on the committee have been enjoyable,
especially when I hear alumni say how the program opened their
eyes to careers in the dairy industry. That’s what keeps volun-
teers like me coming back year after year.”
Craig PollockVice president and branch manager, Sangerfield, n.Y.President, The Northeast Cooperative Council (NECC)
“During my tenure on the Board and
now as its president, I am proud to say
that NECC has delivered high-quality
conferences to managers and directors
of major cooperatives. In addition, we
have helped prepare young members for
leadership positions in their respective
cooperatives.
“Most recently, we reestablished a course at Cornell on coop-
erative structure. I have always had a soft spot for educational
pursuits. I enjoy working with my fellow board members, who
are thoughtful, accomplished people. In short, I have benefited as
much from being a part of this organization as I hope that I have
given to it.”
Holly WaltersCustomer service, Burrville, n.Y.Leader, 4-H Dairy ClubSecretary, Lewis County 4-H Advisory Committee
“My 4-H leader impacted my life in so
many important ways that I’ve wanted to
help youth enjoy the same opportunities
ever since. As a 4-H leader, I’ve helped
organize our Lewis County Dairy Bowl
team and watched members go to the
state competition.
“As secretary of the dairy advisory
committee, I help organize the annual Dairy Camp, where youth
learn how to wash, bed, clip and show their animals. This year,
we will run our Enhancement Calf Scholarship, which awards a
registered calf to the scholarship winner. I once won this scholar-
ship, which may be why I still show cattle today.”
Brian MoncktonRegional manager, Batavia, n.Y.Director, LEAD NY
“Close to 400 people have gradu-
ated from Lead NY since it first offered
leadership training in 1985. I am humbled
to be one of those graduates and equally
humbled to serve alongside a group of
committed individuals on the LEAD
Board. We strive to build on a program
that develops leaders for the food, agricul-
ture and natural resource industries.
“I chair the finance committee and serve as liaison to the NYS
Ag Society. LEAD recently graduated its fourteenth class. This
class’s field travel experience was in Turkey, which is a country
out of the normal ‘comfort zone’ of prior class trips.”
fce employees invest in their local communities
15W i n t e r 2 0 1 3
The CSA method of farming debuted in the United States in the
mid-1980s when the first two CSAs were created, one in Massachu-
setts and the other in New Hampshire. Since then, this movement
has been ever growing across our 50 states.
When Chris and Katie Cashen first got started farming together
back in 2000, the Farm at Miller’s Crossing was primarily whole-
sale, with a small CSA on the side. But as their business continued
to expand, they started to experience some of the turbulence that
comes with wholesale marketing — price fluctuation and often too
much of a crop they couldn’t sell.
As their CSA continued to develop, Chris and Katie saw an
opportunity to expand this portion of their business. “We realized
the CSA was safer because we had a guaranteed market,” said
Chris. “With a CSA, we essentially enter into a contract with the
consumer so we know the majority of our products are sold before
they’re even planted.”
Over the past 13 years, Chris and Katie say they’ve learned a
lot. Their plantings and harvestings require a great deal of plan-
ning to ensure they have variety available for their members each
week. “Our goal is to give people what they want even though
they aren’t selecting it themselves,” said Katie. “We want our mem-
bers to have variety to prepare meals without excess produce just
sitting in their fridge.”
A typical weekly share consists of 7-to-10 items, including at
least one head lettuce or salad green, one cooking green, one root
crop, one herb and one fruit item, among other items depending
on the season. In addition, the Cashens also offer a grass-fed beef
share, a winter share and a canning share.
Although Chris and Katie have found CSA farming to be less of
a gamble, as with any type of farming, risk can never be eliminat-
ed. You never know when a heat wave might hit or flooding rains
or damaging winds will sweep through the area, destroying the
crop. And, in the Cashen’s case, a crop that has been destroyed by
weather conditions means that it can’t be delivered even though it
has already been purchased.
“That’s where the ‘community support’ idea comes into com-
munity supported agriculture,” explained Chris. “The community
shares our risk. They’re going through the same heat or rain that
the farm experiences, so they understand if we can’t provide a
particular product as we planned.”
cHriS & katie caSHenFarm at Miller’s CrossingHudson, n.Y.Organic CSa, wholesale & retail operationHave worked with Farm Credit East on lending, taxes, consulting and appraisals
Sharing the Risk through coMMunitY supported agriculture
Consultant Services Lead
to Greater Profit for Murcrest
Farms
16 F i n a n c i a l P a r t n e r
Lynn Murray will be the first to tell
you: When it comes to managing your
farm, what you don’t know can hurt you.
In 2004, the time felt right for Lynn
and his family to expand their dairy
farm. “We had too much equipment and
labor with not enough cows,” recalled
Lynn. “It wasn’t an efficient size for us.”
But before moving forward with an
expansion, the Murrays brought Farm
Credit East consultant John Lehr into
the fold — and they were glad they did.
“John immediately pointed out that a less
profitable year was the best time for us
to expand, which was a surprise,” said
Lynn. John suggested that the Murrays
would be at less risk in a down year,
given that they were already sacrificing
income. Additionally, they would be bet-
ter positioned to take advantage of the
higher prices in an up cycle once they
completed their expansion.
Looking to the Murray’s numbers,
John also saw several ways to mitigate
the risk of an expansion. The Farm
Credit East dairy benchmark program
focused the Murrays’ attention on their
feed costs, which were higher than other
farms of their size. “We were spending
too much on purchased feed concentrate
mixes. Focusing on that made a big dif-
ference in our bottom line,” said Lynn.
John encouraged the Murrays to
focus separately on variable and fixed
costs to better evaluate their overhead,
and used budget projections in a gross
margin format. “As we did that, we could
model future changes,” John said, “add-
ing cows, getting the parlor up to capac-
ity. The gross margin format was a great
tool to use to visualize changes.”
According to Lynn, Farm Credit East
helped his family to see threats and
opportunities that they may otherwise
have missed during a 10-year period of
growth. “It’s hard to see every detail
when you live the business every day,”
he said. “I am certain John’s work moved
us faster and more profitably through
expansion.”
lOOk beFOre yOU leaP
lynn mUrray anD FamilyMurcrest Farms, LLCCopenhagen, n.Y.Dairy farm
17W i n t e r 2 0 1 3
The Entwistle family will not be using the 1040-EZ tax form
this year … or ever, for that matter. With a farm that includes three
LLCs, a rapidly growing herd and three generations of operators,
tax time can feel like untangling a very large ball of twine.
“We have a complicated business that includes my parents,
Robert and Alma, and my three brothers, Robert, Jr., Steven and
Joseph,” acknowledged Jim Entwistle. “My brothers and I are wind-
ing down our father’s business and growing ours. Our parents also
gifted the rest of the real estate to us last year. It’s taken a lot of
thought.”
To ensure that their tax returns are accurate, Jim turns to
Farm Credit East tax specialist Paul VanDenburgh. “Paul prepares
returns for our multiple entities as well as many of our personal
returns. He’s knowledgeable and keeps us up to speed on tax
laws,” he said.
For the Entwistles, filing annually is only one part of an ongo-
ing process. “We meet with Paul and our loan officer two or three
times throughout the year,” said Jim. “That lets us work together
on what short- and long-term decisions to make and how much
money to spend.”
Jim sites the changing cap on write-offs as an example of how
Farm Credit East helps bring a strategic perspective to the tax pro-
cess. “When the government was trying to stimulate the economy,
you could spend up to $500,000, which you can rapidly depreciate
in one year rather than over 7 or 10. With that in mind, Paul kept
us informed so that we could plan our capital purchases,” Jim said.
Paul stresses the importance of taking the long view with re-
gard to tax liability. “Some clients can be unrealistic about getting
refunds every year. It’s better to pay a little tax all the time than
pay a huge amount one year and none the next,” he explained. “I
like to take the peaks out as well as the valleys.”
For businesses like Entwistle Brothers Farm, LLC, accomplish-
ing that objective can include strategies such as prepayment, capi-
tal purchase decisions or transferring assets from one generation
to another. Regardless of the strategy Paul ultimately recommends,
he focuses on a team approach in creating a plan. “I work closely
with the family’s attorney to minimize eventual estate issues,” he
said. “There’s also close coordination with their credit, records
and tax staff at Farm Credit East. That collaboration makes for
smooth delivery.”
Jim and his family recognize the importance of having an
informed and engaged tax specialist on their team. Farm Credit
East fills that crucial role. “Taxes make up a huge part of our plan-
ning throughout the year,” said Jim. “There’s a lot of trust involved
when you have someone manage your records and taxes. But
honestly, without Paul’s advice, we’d have spent a lot more money
over the years.”
Jim entWiStle anD FamilyEntwistle Brothers Farm, LLCLitchfield, n.Y.Dairy farm
naVigating – the Twists and Turns of – tax law
FCE tax specialists take the mystery out of filing
18 F i n a n c i a l P a r t n e r
washingtonUpdate
With 80 percent of farm bill spending
going to nutrition programs, an increas-
ing number of people are asking, “Does
it make sense to combine farm programs
with nutrition programs in one farm bill?”
This option almost became reality this
year as the House moved separate bills on
farm and nutrition programs before the
conference committee was established.
The historical view was that farm pro-
grams and food stamps made a good mar-
riage, because bringing the two programs
together gained support from both rural
and urban members of Congress. With less
than 50 of the 435 House members from
rural/agriculture districts, it made sense to
seek urban/suburban support by tying the
two together.
The fact that the Senate and House
agriculture committees have jurisdiction
for both the SNAP and farm programs is
the underlying reason why the marriage
worked. From a pragmatic viewpoint, agri-
culture committee members who support
farm programs included food stamps in
order to gain backing from urban mem-
bers. The combining of the two interests
has ensured the necessary support to pass
the farm bill.
But the process broke down this year.
As SNAP went from a $25 billion annual
expenditure 10 years ago to its $76 bil-
lion price tag today, it became a red flag.
Many members from rural districts are far
more concerned with increasing federal
expenditures than with farm programs.
Conversely urban members found little
reason to support a farm bill that made
cuts to SNAP.
The reality is that it may be hard to
maintain farm programs unless they are
packaged with something else. Lisa Kelly,
of the National Council of Farmer Coopera-
tives, shared this perspective:
“The farm bill must preserve the long-
standing, rural-urban alliance that reinforc-
es the fact that food security, investment
in rural America and a safety net for those
in need are priorities benefitting the entire
nation. Adding to the importance of this
effort is the fact that rural America’s popu-
lation is, by its very nature, smaller than
that of urban and suburban America. As
such, it is ill-advised to seek a separation
of nutrition programs from the farm bill,
especially at a time when the agriculture
industry is seeking to better connect with
its consumers.
“Should this farm bill put farm policy
and food policy on separate paths, it could
impact farm bill reauthorizations in the
years ahead and farm policy stands to lose
the most in that scenario.”
Note: At the writing of this article,
the farm bill is in a House-Senate
conference committee. While it appears
that nutrition and farm programs will
stay together in this bill if the conference
committee is successful, this issue will
remain a key area of discussion in
the future.
Robert a. SmithSenior Vice President for Public Affairs
Should the Farm Bill include
Nutrition Programs?“ The reality is that it may be hard to maintain farm programs unless they are packaged with something else.”
Farm Credit East is pleased to have a number of members of the House agriculture Committee who have advocated northeast agricultural interest in the farm bill debate. Here are five perspectives on the nutrition/farm program issue. Representatives Gibson, Collins, Kuster and McGovern serve on the House agriculture Committee and Representative Owens previously served on the agriculture committee and now is on the appropriations committee. We thank them for their input on this issue.
“As a member of the House Agriculture Committee, I worked to draft a bipartisan
Farm Bill that was ultimately voted out of committee by an overwhelming majority
vote. Unfortunately, that bill failed to pass the House in June. It became clear to House
leaders that it was necessary to separate the farm programs and nutrition title in order
to get all these important issues to Conference Committee with the overall goal of hav-
ing a comprehensive, five-year Farm Bill in place for the benefit for our farmers, ranch-
ers and producers. I am pleased the Committee is currently working toward making
that a reality.”
- Congressman Chris Collins, R-new York (first elected in 2012)
“Traditionally, the farm bill has been put together with a broad bipartisan coali-
tion. We have an institutional framework in place that addresses nutritional needs
of our vulnerable citizens, while providing a safety net for our farmers and ranchers
who produce our high-quality food. I am hopeful that the completion of the farm bill
will regroup this historic coalition and produce a bipartisan product that remarries
the nutrition title with agriculture programs. Continuing to link these two portions of
the bill will give us the best chance at passing a final bill and thereby reforming and
improving these programs.”
- Congressman Chris Gibson, R-new York (first elected in 2010)
“I strongly believe that farm and nutrition programs belong together in one Farm
Bill. The Farm Bill is intended to ensure that our nation has a robust food system that
supports jobs and provides our families and children with fresh, nutritious food. The
farm support programs within the Farm Bill are important to the rural economy, and
the nutrition programs are equally important because that money goes right back to
the farmers who are providing that nutritious food. If we don’t have both parts of that
equation, then the Farm Bill isn’t going to comprehensively meet the needs of both
farmers and consumers.”
- Congresswoman annie Kuster, D-new Hampshire (first elected in 2012)
“Splitting nutrition programs from the rest of the farm bill would be a very bad
idea —particularly in the current political climate. These valuable programs are under
attack. We have already seen a stand-alone nutrition bill pass the House that would
have slashed $40 billion from SNAP.”
- Congressman Jim McGovern, D-Massachusetts (first elected in 1996)
“A comprehensive Farm Bill unites America’s diverse interests by ensuring votes
from both rural and urban districts. Dividing the bill sets a dangerous precedent for
farmers who count on Congress to deliver the certainty of a five-year bill. This legisla-
tion is too important for farmers, New York’s economy, consumers, and the millions
of vulnerable seniors, children, and veterans who rely on the SNAP program. They
deserve a comprehensive solution, which is long overdue.”
- Congressman Bill Owens, D-new York (first elected in 2009)
The Two Sides of the ArgumentSPlit Farm PrOgramS anD nUtritiOn PrOgramS aPart• Agriculture is only 20 percent of
farm bill funding. We shouldn’t give the public the impression that big expenditures are being spent on agriculture.
• Nutrition programs have social purposes. Farm programs should be viewed as programs that advance food security and economic development.
• Farm programs deserve their own focus.
• Nutrition programs are too controversial and a detriment to agriculture.
keeP tHem tOgetHer• A rural and urban coalition is
essential for building support.
• Farm programs cannot generate necessary support on their own, because there are not enough members of Congress with strong ag interest.
• Agriculture should think in terms of food security at all levels, from production to consumer.
• This gives more authority to agriculture committees and undermining this authority would be detrimental to agriculture in the long run.
Congressional PersPeCtives
19W i n t e r 2 0 1 3
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HOW TO REACH US: Whether you want to praise us, complain, ask our advice or just let us know what’s on your mind, we’d like to hear from you. Write: karen murphy, editor, Farm credit east, 240 South road, enfield, ct 06082-4451. call: 860.741.4380. e-mail: [email protected].
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Financial Partner is printed on recycled paper.
Farm Credit Northeast AgEnhancement Program
recently awarded a $5,000 grant to the North American
Intercollegiate Dairy Challenge (Northeast Region) to
support a three-day event for agriculture colleges where
dairy students in mixed school teams analyze all aspects
of a dairy farm and make recommendations to a panel of
judges. This gives students the opportunity to develop
skills and provide insights as well as to compete, share
and make contacts within the dairy industry.
According to Farm Credit East’s John Lehr, an active
program leader, “Putting students with different skills
from different schools on a team to find solutions is an
important learning experience. Today’s businesses
require employees to succeed with all types of personal-
ities. The Dairy Challenge teaches technical knowledge
and helps students develop people skills.”
John added, “In addition, the program brings all
aspects of the dairy industry together. It is a tremendous
opportunity for participating dairy farms to receive
consulting advice and for agribusiness sponsors and
students to meet and discuss prospective working
relationships.”
coMMunitYSupport
dairy challenge receives agenhancement grant
Farm Credit East240 South RoadEnfield, CT 06082-4451
Address Service Requested
PRSRT STDU.S. Postage
P a i DPermit No. 690Springfield, MA
For details•BobSmith:800.327.6588
•Emailproposalsto:[email protected]
•Proposaldeadlines:April1,August1andDecember1
•FarmCreditEast.com/Industry-Support.aspx
agEnhancement Grants since 1996 •Totalgrantdollars:$1.473million
•Totalprojectssupported:553
Students ask questions to Lance Rovers, far right, of Rovers Farm in Chazy, N.Y. Fourteen colleges and universities sent 119 students to this year’s Dairy Challenge.