farm credit servicesFALL 2017

MARGIN PROTECTION 2018 PAGE 6

CROP INSURANCE HELPFUL HINTS PAGE 10

Minot: 852-1265 | Bottineau: 228-3731 | Carrington: 652-2836 | Crosby: 965-2265 | Rugby: 776-5863 | Williston: 774-0055

Bowbells Crop Insurance: 377-3703 | Ward County Crop Insurance - 852-5432

ISSUEIN THIS

What A Difference A Year Makes

Farm Credit ServicesProducts & Services

FCS Offers A Wide ArrayOf Products & Services

Margin Protection 2018

2017 Tailgate Tour Schedule

Meet Mark Knorr Man On The Run

Crop Insurance Reminders

Crop Insurance Helpful Hints

Rural Community Grant Fund

Livestock Risk Protection

Pat-NOW Community FundAwards Local Area Grants

Drought Management

Employee News

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large portion of western North Dakota is lacking moisture. Crop insurance

specialists are busy taking loss claims for 2017.

A lot of cow/calf operators have trimmed their herds. Pastures are

short and the hay supply is even shorter. Many of you have received calls from the livestock industry begging for hay. Hay prices are very high. Producers are debating whether buying hay to keep the whole herd will be worth it. Very soon we will be announcing a special loan program for ranchers to help maintain your base cattle herd that you have worked so hard to build. Look for more program information coming soon. Contact your loan officer for more details.

Farmers coming in the front door are telling me they have somewhere between an average crop to

a poor crop. In the next month, we will know. Crop prices have improved, but that only helps if you have something to sell.

The increased prices should help your multi-peril crop insurance coverage if you have Revenue Protection, which most Farm Credit Services of ND customers have. Our insurance companies have been put on notice they will be busy this fall.

Most of you will weather this storm just fine. I urge you to come and visit with your Farm Credit Services representative early if you have any questions or concerns. We have many options to help you cope with the changes in farm income. Farm Credit Services of ND expects to be here during the good times and the challenging times. This year we seem to have both.

What a difference a year makesHERE FOR YOU DURING THE GOOD TIMES AND THE CHALLENGING TIMES.

• Claude Sem •

FALL 2017 3

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REAL ESTATE LOANS Long-term credit for land, land improvements, buildings and facilities.

OPERATING LOANS Short and intermediate credit for operating purchases, family living and feeder livestock.

TERM LOANS Intermediate term credit for capital purchases such as machinery, breeding livestock, irrigation systems and vehicles.

LEASING SERVICES A financing alternative for cash flow, tax advantages and other considerations: lease livestock, facilities, farm equipment, vehicles, computers, irrigation systems and specialty equipment.

YOUNG & BEGINNING FARMER LOANS Programs and resources to help finance young or beginning farmers or ranchers.

FAMILY FARM PROGRAM Designed especially to assist farmers in bringing the next generation into the business. A partnership between the seller, buyer and FCS, which provides a low cost plan to transfer the farm from one generation to another or from one farmer to another.

LIFE & DISABILITY INSURANCE Affordable life and disability insurance coverage to protect your family’s income, home and acreage in the event of illness, injury or death.

Products & ServicesCROP INSURANCE Multi-peril, revenue protection and hail insurance policies that can help protect your investment against crop loss or damage.

APPRAISAL SERVICE Certified real estate and chattel appraisers experienced to give quality rural appraisals.

ESTATE PLANNING Through an alliance, we can provide you with information and advice to help you make decisions on transferring farm assets and meeting retirement goals.

FUNDS HELD Park excess funds in this account and earn interest until you make a withdrawal.

FARM CASH MANAGEMENT A flexible product that links your revolving line of credit with an AgriBank money market investment or it can simply serve as a standalone money market investment account alternative.

ELECTRONIC BANKING Simple, convenient and secure access to your account information 24 hours a day, 7 days a week through telephone or internet service.

CREDIT LINE CHECK WRITING A convenient way to access your pre-approved line of credit simply by writing a check.

DISBURSEMENT CARD Disburses funds straight from your operating loan to pay farm expenses.

FarmCredit ServicesALL THE PRODUCTS& SERVICES TO MEET YOUR NEEDS

Farm Credit Services of North Dakota provides short, intermediate and long-term credit to farmers, ranchers and ag-related businesses.

FCS of ND also offers life and disability insurance, crop hail insurance, multi-peril crop insurance, real estate fee appraisals, and expertise in estate planning.

We offer the most comprehensive credit and insurance packages tailored for the agricultural industry. Here is a list of the products and services we offer. Be sure and visit with our staff to see how they can work for you!

64 INSIDE FARM CREDIT SERVICES

FALL 2017 5

s this article is written, producers have put seed in the ground with hopes of a

good harvest, are taking care of the crops and livestock, and are in the haying process for winter feeding. These steps are all part of the business

of growing food for the world. As physical and often repetitive as these steps may be, there is a large part of your business that involves taking care of things that are ever-changing and that we may not consider part of the daily needs. Following are examples of products and services provided by FCS of ND that will assist you in those ever-changing needs by working with the Loan Officers and Insurance Specialists in a Farm Credit Services office near you.

Along with providing the operating loans that most producers use on an annual basis, term loans can be used to assist with stretching out your cash flow to accommodate a capital purchase of machinery and equipment, livestock, vehicles or other items that depreciate faster. The typical duration of these loans is 2 to 5 years with some extended maturities depending on the item. Fixed rates are still attractive for loans in this category, and the variable rate is competitive with the local market.

When the planned or unforeseen long-term need for credit arises, a real estate loan can assist you with purchasing and improving the land, building facilities or to use existing RE equity to improve the cash flow needs when a shorter term option will not work. The minimum

term for a real estate loan is 5 years, with typical terms of 10 to 20 years or longer depending on the cash flow plan for your operation. Interest rate options range from the variable rate and both adjustable and fixed rate options up to 30 years.

When your tax representative feels a loan is not right for your needs, leasing options are available for farm equipment, vehicles, specialty equipment and facility expansion. A typical lease has a first payment due at time of possession, followed by a series of annual payments, with a buyout option when the term of the lease expires with typical terms 3 to 5 years.

Life and Disability Insurance are some of the products used to protect your wealth in the event of illness, injury or death. Estate planning can help you plan how to transfer your assets and meet your retirement goals. These products are offered through an alliance with Freedom Financial Group.

Crop Insurance in the form of multi-peril crop insurance, hail insurance or livestock risk protection are other risk management tools to help protect the annual investment you have in your production. We have many years of experience with our agents throughout FCS of ND to assist you in determining the best option for your business.

Money management tools available, and most often used at FCS of ND, are funds held, farm cash management and credit line check writing.

Funds held gives you the ability to park excess funds in a loan account (not to exceed that loan’s available commitment) to be used for upcoming payments or later withdrawal, while earning interest.

Farm cash management is a flexible product that is an investment in AgriBank bonds or AgriBank Money Market investments that earn a competitive interest rate. You will receive detailed monthly transaction statements and are allowed to access your FCM anytime with no limits or fees on transactions with a liquid asset. This product can be linked to your existing revolving line of credit or can be a stand-alone account. (This investment is not insured by or a direct obligation of the U.S. government.)

Credit line check writing is available to qualified accounts that will allow you to write checks for operating needs that will be deducted directly from your pre-approved line of credit.

As another year of production comes full cycle, remember to use the tools available to you from FCS of ND to ensure your risk management and financial needs are met for the next year and beyond.

A

FCS OFFERS A WIDE ARRAY OF PRODUCTS & SERVICES

• Todd Erickson •

6 INSIDE FARM CREDIT SERVICES

argin Protection insurance (MP) is a privately-developed product that first became

available in 2016. MP is an area-based insurance plan that provides coverage against an unexpected decrease in operating margin (revenue less input costs), caused by reduced county yields, reduced commodity prices, increased price of certain inputs, or any combination of these perils.

Because MP is area-based (average for a county), an individual farm may have a decrease in its margin, but not receive an indemnity. The margin protection plan can be purchased by itself, or in conjunction with a Yield Protection (YP) or Revenue Protection (RP) policy. If a producer buys a YP or RP policy, they will receive an MP premium credit because indemnity payments from one policy can offset payments from the other so this combination lowers the risk of loss under MP. Important: If a producer buys another policy, it must be from the same Approved Insurance Provider that issued the MP policy.

M

MARGINPROTECTION

2018DAVE PAUL,

VP UNDERWRITING AT QBE NAU

THE LAST DAY TO PURCHASE A

MARGIN PROTECTION POLICY

FOR CORN, SOYBEANS AND

SPRING WHEAT IS SEPT. 30, 2017.

MP IS ENTERING ITS 3RD YEAR WITH SOME EXCITING CHANGES IN STORE FOR THE 2018 CROP YEAR.

• The RMA expanded MP for corn and soybeans to Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

• The maximum coverage level available was increased to 95 percent. A producer may choose coverage from 70 percent to 95 percent of their expected margin.

• Protection factors are now offered from 0.80 to 1.20.

• The program was updated to add a harvest price option (HPO) for all MP crops. Like many popular revenue-based policies, if the harvest price is greater than the projected price, the expected margin and the trigger margin are recalculated based on the higher harvest price.

• The calculation of deductibles and trigger margins has been revised.

CORN EXPANSION AREA SOYBEAN EXPANSION AREA

In addition to the expansion into corn and soybeans, in North Dakota MP is available for spring wheat in all counties.

SO HOW DOES MP WORK? MP provides coverage that is based on an expected margin per acre for each applicable crop, type, and practice.

CALCULATING AN MP TRIGGER (WITHOUT THE HPO)

• The expected revenue per acre is the expected county yield multiplied by a projected commodity price; and

• The expected cost per acre is the dollar amount determined by multiplying the quantity of each allowed input by the input’s projected price.

HARVEST MARGIN = HARVEST REVENUE – HARVEST COSTS

FALL 2017 7

EXPECTED MARGIN

(Expected Yield x Projected Price) – Expected Cost

(180 bu/ac x $4.00) - $313.60/ac = $406.40/ac

CALCULATING AN MP INDEMNITY

• The harvest revenue per acre is the final county yield multiplied by the harvest price; and

• The harvest cost per acre is the dollar amount determined by multiplying the quantity of each allowed input by the input’s harvest price.

HARVEST MARGIN = HARVEST REVENUE – HARVEST COSTS

MARGIN DEDUCTIBLE

Expected Revenue x (1-Coverage Level)

(180 bu/ac x $4.00) x (1-95%) = $36/ac

TRIGGER MARGIN

Expected Margin – Margin Deductible

$406.40/ac - $36/ac = $370.40/ac

EXPECTED MARGIN

(Expected Yield x Projected Price) – Expected Cost

(180 bu/ac x $4.00) - $313.60/ac = $406.40/ac

MARGIN DEDUCTIBLE

Expected Revenue x (1-Coverage Level)

(180 bu/ac x $4.00) x (1-95%) = $36/ac

TRIGGER MARGIN

Expected Margin – Margin Deductible

$406.40/ac - $36/ac = $370.40/ac

For wheat, the final county revenues and final county yields are determined generally around April 1 following the crop year. If an indemnity is due, the Approved Insurance Provider issues any payment around May 1 of the following crop year. For corn and soybeans, the final county revenues and final county yields are determined before April 16 following the crop year. If an indemnity is due, the Approved Insurance Provider issues any payment before May 16 following the crop year.

MP LOSSES ARE PAID WHEN FINAL AREA YIELDS ARE AVAILABLE, IN THE SPRING OF THE FOLLOWING YEAR.

arm Credit Services and local high school football teams are “teaming up” for the fifteenth year hosting “Home Field Advantage” tailgate parties. WOW!

Fifteen years!

Farm Credit Services sets up the Pat-NOW grill and “tailgates” at local high school football games. Game-goers can purchase a hamburger or hotdog, chips and pop with all

F

August 24th: Glenburn* vs Minot High JV

August 25th: Velva* vs Harvey/Wells County

September 15th: Kenmare* vs Velva

September 15th: Westhope/Newburg/Glenburn* vs Langdon

September 29th: Berthold* vs Kenmare

* Designates the home team

2017 Tailgate Tour Scheduleproceeds being donated back to the home team. To date, through our 2016 grilling season, Farm Credit Services has donated over $66,000 to designated school organizations in local communities.

Let’s give them the “Home Field Advantage!” We look forward to grillin’ up a burger or hotdog for you!

8 INSIDE FARM CREDIT SERVICES

joke about the fact that I didn’t learn to walk until

I was 40 years old on the farm, because I ran,”

says Mark Knorr with a spring in his voice that

suggests, despite having learned the art of walking, you

won’t find him sauntering or strolling anytime soon. “When

the door opened, I ran out to take care of the livestock. I

ran across the yard to do everything I was doing. You’re

trying to do the work of two or three people all the time.”

With around 5,400 tillable acres of wheat, soybeans,

corn, canola, pinto beans and sunflowers on the family

farm south of Sawyer and stakes in irrigated operations in

Turtle Lake and Arizona, one thing Mark has never learned

is to sit still and collect dust.

Growing up, life on the farm was defined by work. Lots

of work. “We started out with chores, feeding livestock,

hauling lots of little square bales of hay before the round

balers were invented. When you start hand-milking a few

cows and hauling bales that are heavier than you, so heavy

you can’t even pick them up, you have to roll them, you

physically become a workaholic at an early, early age.”

Whether armed with a strong work ethic or afflicted

with workaholism, Mark graduated from North Dakota

State University in 1977 with a degree in animal science

and immediately returned to the family farm, partnering

with his two brothers in its operation.

His brothers’ interests would move away from the

livestock and grain operation as they pursued other

business ventures, but Mark’s interest would focus on

grain, and he would run with it.

“You just keep putting pieces together,” explains Mark,

“it’s an ongoing process that every farmer goes through.”

When larger purchases became available from family

members, he would purchase land that they owned or pick

up available ground they had been renting to expand his

own operation when they went on to different interests.

“Sometimes those costs don’t fit into a normal

budget, and they can put extra pressure on cash flow.

That’s one of the things I can look back and be thankful

for, having the opportunity to be involved with Farm

Credit Services and having capital available to expand the

operation. I think, over the years, that’s been the biggest

benefit, just having access to a good line of capital for

operating, purchasing equipment, and purchasing land, to

have access to lenders that understand agriculture and

can see the value of expansion.”

As the farm grew slowly over time, Mark’s life sprinted

ahead in other ways. Through a relative working in Minot,

he made the acquaintance of Carol, a recent NDSU

pharmacy graduate from Fessenden. They were married,

and before long their three children, Becky, Lisa, and

Brian, were out playing on the land Mark’s father had

broken out of sod, back before it ever produced a grain

crop. They learned the value of crop insurance from the

drought cycles in the 80s. When beef cattle hit the $1,000

mark, they sold out of livestock for good, lessening the

workload to focus on family and crop agriculture.

The little square bales Mark had muscled around at

the age of five had ballooned into immovable rounds. The

simple formula of good soil, seed, water, and sun became

quantified, multiplied by the benefits of in-season nitrogen

top-dressing, and charted out on a moisture-mapped

variable-rate application prescription.

“Agriculture seems now to be light-years away from

where we were 50 years ago,” says Mark. “When we

first started, we thought 30 bushels an acre was a great

crop for wheat. I remember when I first approached the

100-bushel mark on wheat and brought my dad back out

from his retirement to ride in the combine and see that we

could actually achieve a yield like that.”

Hay bales and bushel expectations weren’t the

only things to grow. When the opportunity to invest with

his nephew on an irrigated operation near Turtle Lake

MAN ONTHE RUN

MEET MARK KNORR

“I

• Reminders •

FALL 2017 9

presented itself, the opportunity for growth, and capital

demands, were sizeable. What started out as only six

sprinkler pivots expanded to 34 pivots and approximately

4,000 acres under irrigation over the course of five years, all

through Farm Credit financing.

“There are so many different angles to agriculture

today,” says Mark of financing the Turtle Lake venture.

“Farm Credit’s capability of financing more than just crop

inputs is an invaluable resource to me. I was drawn to Farm

Credit by their favorable interest rates and willingness to

finance farm operations. One of the things that has helped

Farm Credit attract agricultural interests is their Pat-NOW

philosophy, being able to help lower their interest rates

upfront for borrowers, competing with other outside sources

of financing.”

Today, Mark doesn’t need to run like he did while

helping bring up a young family and growing operation, but

that doesn’t mean he’s slowing down. Neither is anything

else, with the kids pursuing their own interests. Becky, the

oldest, pursued pharmacy like her mother and works at

Mayo Clinic in Rochester, MN. Lisa went into hospitality and

tourism management. She and her husband live in Surrey

with their two children, Mark and Carol’s only grandchildren.

The youngest, Brian, works as a civil engineer in Minot,

working his own acreage on the farm and helping his dad

when he can.

For a man who didn’t learn to walk until he was 40,

Mark, his family, and his operation have certainly found

their stride.

End of the insurance period The end of the insurance period is the earlier of the date of harvest, or the calendar date set by RMA guidelines. Listed below are the calendar dates for the commodities in our areas.

SEPT. 30TH: Silage corn, dry peas

OCT. 15TH: Forage, potatoes

OCT. 31ST: Wheat, canola, flax, barley, oats, rye, dry beans, mustard

NOV. 15TH: Sugar beets

NOV. 30TH: Sunflowers

DEC. 10TH: Grain corn, soybeans

These are the deadlines to report a loss on any of your crops that are not harvested by these dates.

Harvest remindersAPPRAISALS NEEDED: If you intend to put any crop to a different use, other than how it is insured, you must notify your agent immediately so a notice can be filed and an adjuster can come out to do an appraisal. Without taking these steps any crop that is destroyed without consent will receive a “0” production count in your APH and you don’t want that.

If at any time you feel your crop is not harvestable or there isn’t enough of a crop there to warrant combining you need to contact your FCS Insurance Specialist right away. A Notice of Loss will be filed and an insurance

adjuster can come out and do an appraisal. If you accept that appraisal the crop can be released and you may do whatever you choose with it, like bale it or graze it.

CLAIMS: Production and Revenue claims need to be reported by unit or section within the required timeline. Do not wait until you are completely done harvesting. A deadline of 15 days from the end of the insurance period applies in most cases. The end of the insurance period is the earlier of harvest of that crop or the date designated by your policy. Claims can be denied by your Insurance provider due to a delayed notice.

Keep good production records! Maintain a load log of production as it comes off the field. Mark scale tickets with the field name/section number if hauling to the elevator. Mark bins if commingling production from other units. Remember, keeping good production records will make any claims you may have go much smoother.

Grain from past years cannot be stored with current year grain until the past production has been measured by an adjuster. So give your agent a call if you intend to commingle grain between years.

If you suspect you may have quality issues with any of your crops you need to contact your FCS Insurance Specialist right away. There is no harm done in opening a claim just in case. Claims can be withdrawn at any time but if we miss reporting deadlines a claim can be denied.

10 INSIDE FARM CREDIT SERVICES

ho would have

guessed after the

winter we had, we

would be talking about drought

conditions. Soil conditions vary

greatly across the state. “You can drive 25 miles north

of Minot and 25 south and you would see very different

conditions,” says Nick Dreyer, FCS Insurance Specialist in

Minot. Farmers are reporting that their canola is spotty and

the fast advancing wheat is short. The Minot area is several

inches below its normal rainfall totals for the year and now

we’re in the hottest, driest part of the year. The damage to

the earlier season crop is irreversible and that brings us

to a reminder about Multi-Peril Crop Insurance Production

Losses. “We are expecting many more production claims

than we have seen in a long time,” says Brian McIntyre,

ARMtech Insurance Sales Representative. As we enter

harvest and you are questioning whether you have a loss

or not, the best advice is to call your agent. “We can tell you

what your guarantee is very quickly. When in doubt call,

because every year I see someone who has a production

loss, didn’t call and it’s too late,” says Dreyer. There are

deadlines for every crop to get your claim in, for example,

wheat is October 31st, soybeans is December 10th, so

don’t wait. There are some grace periods and special

exceptions for Revenue Protection losses, but it’s better

to have a claim filed and withdraw it, rather than waiting.

“Keeping good records is an important part of helping

us during the claims process. The use of load records

becomes beneficial to the producer,” says McIntyre. FCS

Crop Insurance Agents can also explain how Enterprise vs.

Optional Units effects your claim. If you have Enterprise

Units on canola, for example, all of your canola production

in that county will have one guarantee. You could have a big

loss on one field, but if your other canola fields are good,

you may not have a loss. On Optional Units, every section

with that crop has its own guarantee. Revenue Protection

vs. Yield Protection can also make a difference in your loss.

Below is an example of a wheat loss situation for both RP

and YP when the wheat price increases at harvest.

W

HELPFUL HINTSCROP INSURANCE

AS WE ENTER HARVEST

AND YOU ARE QUESTIONING

WHETHER YOU HAVE A LOSS

OR NOT, THE BEST ADVICE IS

TO CALL YOUR AGENT.

REVENUE PROTECTION:

Acres – 100Wheat APH – 50 bushelsCoverage level – 75%Base price - $5.65Harvest price - $6.50Harvested Production – 25 bushels/ac

50 APH x 75% x 100 acres x $6.50 = $24,375 revenue guarantee. 25 bu/ac x 100 acres x $6.50 = $16,250. $24,375 - $16,250 = $8,125 indemnity.

YIELD PROTECTION:

Acres – 100Wheat APH – 50 bushelsCoverage level – 75%Base Price - $5.65(No Harvest Price in YP Plan)Harvested Production – 25 bushels/ac

50 APH x 75% = 37.5 bu/acre guarantee x 100 acres = 3,750 bushel guarantee. 25 bu/ac x 100 acres = 2,500 bu. harvested production. 3,750 – 2,500 = 1,250 x $5.65 = $7,063 indemnity.

WHEN IN DOUBT- CALL

MINOT VOCATIONAL ADJUSTMENT WORKSHOP NEW VEHICLE FOR KALIX HUMAN CONNECTION PROGRAM

TIOGA SENIOR CITIZENS CLUB VEHICLE THEY WILL USE FOR MEALS ON WHEELS, PROVIDING TRANSPORTATION FOR AREA SENIORS

PORTAL INTERNATIONAL FIRE DEPARTMENT REPLACE WATER TANKER TRUCK

BAKKEN OIL RUSH MINISTRY PURCHASE AND RENOVATION OF TWO BUILDINGS

COLUMBUS RURAL FIRE DEPARTMENT REPLACE A WATER TANKER TRUCK

ECKERT YOUTH HOMES FITNESS PARK FOR AT-RISK YOUTH

$25,000

$10,000

$6,000

$5,000

$5,000

$5,000

arm Credit organizations in western North Dakota announced grant awards to worthy programs that will improve lives in local communities through the

Rural Community Grant Fund.

The fund was established as a partnership between Farm Credit Services of Mandan and Farm Credit Services of North Dakota – the two largest providers of agricultural loans in western North Dakota – and AgriBank Farm Credit Bank, their St. Paul, Minn.-based funding bank, to help communities impacted by mineral development.

Grants support critical community needs such as healthcare, safety, access to housing, education and economic development.

“The number of grant requests has grown substantially,” said Claude Sem, CEO of Farm Credit Services of North Dakota. “It is great to know so many communities in oil impacted areas who need financial assistance to support their programs and services are able to benefit from our resources. We are proud to give back to those communities.”

The Rural Community Grant Fund is accepting applications for programs that meet the needs of communities in western North Dakota. Interested parties should apply at www.farmcreditnd.com or www.farmcreditmandan.com before August 31, 2017.

Grant FundSUPPORTING WESTERN NORTH DAKOTA COMMUNITIES

LIGNITE FIRE PROTECTION DISTRICT FIRE AND RESCUE UTILITY TERRAIN VEHICLE $5,000

TIOGA MEDICAL CENTER ENZYME IMMUNOASSAY ANALYZER

MOHALL AMBULANCE SERVICE NEW DEFIBRILLATORS

WILLIAMS COUNTY 4-H EDUCATIONAL EQUIPMENT

$5,000

$3,500

$3,350

BOWBELLS PARENT TEACHER ORGANIZATION CHILDREN’S READING PROGRAM AND EQUIPMENT$2,000

LATEST GRANT FUNDS

RURALCOMMUNITY

FALL 2017 11

F

12 INSIDE FARM CREDIT SERVICES

he recent cattle market

fluctuations have hit the news

as drought forced sales and

competition increases from pork and

chicken. The projected opening up of

the market in China has the potential to

enhance our local livestock markets. The

U.S. and world economy continue to impact prices as well,

so how can both cow/calf operators and feeder livestock

operations ensure profitability. Using the futures markets

with hedges and options can be an effective strategy,

but for a rancher looking for a simple tool, Livestock Risk

Protection (LRP) may be the answer.

By now, most of you have probably heard of LRP. If you

already use this price protection tool, you know the comfort

it brings to have profits locked in for your operation. If you

don’t use LRP, stop in and see one of our loan officers or

insurance specialists. They can walk you through how the

program works and show you the benefits of this excellent

risk management tool.

LRP is protection for declining market cattle prices.

It is an insurance product administered by the Risk

Management Administration (RMA) and you can think of

it as MPCI insurance for your cattle prices. Each trading

day, LRP prices are listed on the RMA website at www.

RMA.usda.gov. These prices change daily depending on

how markets move. Endorsements, or the length of the

price protection, can be offered from 13 week to 52 week

increments. Weight classes are available for younger calves

up to 599 pounds, backgrounded calves from 600-900

pounds, and also finished cattle. Both steers and heifers

are available to be covered, but coverage for heifers is not

available if they are bred at the time of the LRP purchase.

When you purchase LRP, you are putting a floor on your

cattle prices. The great thing for all producers is that you

can insure anywhere from 1 to 2,000 head per year, so no

matter your size operation, you can take advantage of this

excellent risk management tool.

An example from this time last year will give you a good

idea of how this product will work. Let’s say last August 14,

2016 you decided to sell your weaned 599-pound steers

in November, 2016. You could have purchased a 13-week

endorsement for $220.19/cwt, which would have cost you

$3.37/cwt, leaving you with a net coverage of $1,299/head.

As you probably know if you are a cattle producer, prices

fell. This LRP endorsement would have paid you $24.77/

cwt or $148.37/head! Because cattle basis is relatively

insignificant to the ND market, you should have gotten close

to $195/cwt for your steers, ensuring the gross income of

$1,299/head. NDSU’s budget for a cow/calf operator is

$654/cow, so if you are close to that amount this would

have resulted in a profit of $645/head!!!

The question then is what is available now. As noted

above, the prices change daily, but as of August 8, 2017,

13-week coverage prices available for steers up to 599

pounds ranged from a $1.41 to $1.59. The heifer price had

a range of $1.28 to $1.44. If you were looking for heavier

steers in the 600-900 pound, those prices were $1.28 to

$1.44.

What is your breakeven for 2017 for your cattle

operation? When you know that, stop and see your loan

officer or insurance specialist. They can show you the

current price protections available and help you customize

your risk management options. The calves do have to be

on the ground and coverage is in effect only if you own

the calves at least 30 days prior to the LRP endorsement

expiration date.

TLIVESTOCK RISK PROTECTION

• Dan Beyer •

CallCandidates

for

FARM CREDIT SERVICES OF NORTH

DAKOTA WANTS YOU! If you are interested in

running for a position on the

Board of Directors, please contact

Kathy Berg, VP Human Resources,

at kathy.berg@farmcreditnd.com or by

calling 800-264-1265.

FALL 2017 13

arm Credit Services of ND is proud to announce the latest Pat-NOW Community Fund (PNCF) grants awarded to local area businesses and

organizations.

“Our local and rural communities in northwest North Dakota face challenges every day, and at Farm Credit Services we believe it’s important to give back to these communities,” says Claude Sem, CEO.

The year to date total funds awarded in 2017 is $50,181.00.

The Pat-NOW Community Fund of $100,000 is funded annually by Farm Credit Services of ND. Applications will be reviewed three times a year and grants will be considered for up to $10,000, or possibly higher based on special request. The next two grant sessions end in August and November 2017. For more information on the PNCF, and for the online application, visit our website atwww.farmcreditnd.com.

F

PAT-NOW COMMUNITY FUND AWARDS LOCAL AREA GRANTSDURING THE FIRST REVIEW SESSION ENDING APRIL 2017, THE FOLLOWING GRANTS WERE AWARDED:

BOTTINEAU RODEO CLUB:OUTDOOR RIDING ARENA

$5,000|

|

BURKE COUNTY STRAIGHT SHOOTER 4-H CLUB: ARCHERY PROGRAM

$4,181|

|

CITY OF FLAXTON: PLAYGROUND EQUIPMENT

$2,500|

|

FESSENDEN BOWDON FFA ALUMNI: GARDEN TRACTOR PURCHASE

$2,000|

|

MAX PUBLIC SCHOOL:MAX PUBLIC SCHOOL GREENHOUSE

$5,000|

|

NDSU FOUNDATION & ALUMNI ASSOCIATION: NEW SEED CONDITION FACILITY

$25,000|

|

ROLETTE COUNTY SHERIFF’S OFFICE: BULLETPROOF VESTS, TASERS, & OTHER EQUIPMENT

$2,500|

|

SERENE CIRCLE: CHAIRS FOR EDUCATIONAL/SUPPORT GROUP MEETINGS

$1,500|

|

WARD COUNTY SHOOTOUT:SPONSORSHIP IN MULTI-SPECIES LIVESTOCK SHOW IN JUNE 2017

$2,500|

|

14 INSIDE FARM CREDIT SERVICES

DROUGHTMANAGEMENT

rought management is one of

those terms that both producers

and lenders are hoping to avoid

long term. The Palmer Drought index as

of August 8 showed that every county in

our service area is in at least a moderate

drought and eight counties have at least

some area identified as extreme drought. By the time

this article comes to publication, hopefully moisture has

returned in time to help row crops and replenish hay and

pastureland. However, if that has not happened, the quote

by Benjamin Franklin “If you fail to plan, you plan to fail” is

appropriate here.

Proactive management is critical when trying to

manage the risk in your operation, and Farm Credit Services

of ND is here to help. There are certainly differences if you

produce crops versus cattle, but what is not different is the

importance of early and often communication with your

loan officer and insurance specialist.

For the crop producer, you have already made your

decision on your MPCI options by March 15 of this past

year. It is noted in other articles within this magazine, but

at any point if you suspect a crop loss, contacting your

insurance specialist is important to do timely – and it costs

nothing to turn in a claim. With potentially lower crop

production, if you have carryover crop or have new crop

production, taking advantage of price rallies to market

your commodities could prove to be a wise strategy.

For cattle producers, there are a number of government

based (mostly FSA) disaster assistance programs that

include the following:

• HayNet and Grazing Net – An Internet based

program to help producers connect with each

other to move hay or offer grazing land

• Emergency Conservation Program (ECP) – Can

provide funding assistance for water conservation

D• Dan Beyer •

• Livestock Forage Disaster Program – Provides

compensation for grazing losses due to drought

• Livestock Indemnity Program – For livestock

deaths due to adverse weather equal to 75% of

the market value.

Contacting FSA is the place to start for finding out if

these programs can work for you.

With potentially lower income, holding off on capital

purchases may be prudent. Dealers continue to be

aggressive in selling equipment, but adding unnecessary

debt with potential losses looming should be avoided. Here

is where your relationship with your loan officer is critical –

they can work with you to come up with a positive solution

that helps ensure your long term success.

Farm Credit Services of ND is in a strong capital

position to continue to be your lender in good times and

bad. We have experienced staff who know how to work

with producers and provide positive solutions. Agriculture

producers face many perils, but together we can help you

succeed and produce the food, fiber and fuel for the world.

FALL 2017 15

TODD ERICKSON accepted the position

of AVP-Marketing on January 1, 2017,

after having been Branch Supervisor for

one of the two Minot branches since 2013.

He began his career with FCS of ND in October 2003 as a

Loan Officer and was previously with Target for 15 years.

Todd graduated from Columbus High School and earned

degrees in Accounting and Business Administration-

Management from Minot State University. He and his

wife, Della, have been married for 30 years and have two

sons and one grandson. Todd enjoys hunting, golfing and

spending time with his family at the cabin or on the farm.

Employee News

COLE HANSON was hired as the 2017

summer intern. Cole grew up in Minot

and graduated from Minot High School

in 2014. He was active in FFA throughout

high school and participated in a variety of CDE’s such

as livestock judging, meats judging, farm and ranch

management, ag mechanics and food and sciences. Cole

was the chapter Secretary and Treasurer in his junior

and senior years respectively. He attended Minot State

University for one and a half years and transferred to North

Dakota State University in the spring of 2016 where he is

currently a senior majoring in Ag Economics and minoring

in Crop and Weed Sciences. Cole is a member of the Saddle

and Sirloin Club, Ag Business Club and Judging Club. In his

spare time, he enjoys hunting and fishing.

CHELSIE BERNDT was hired this spring

as a Customer Service Representative

(CSR) in the Minot Branch. Chelsie grew

up on her family ranch in Towner, the XC

Ranch which is celebrating its 76th year of operation, and

currently resides there with her son helping her parents

operate the ranch. Prior to working for Farm Credit

Services she was employed with Town and Country Credit

Union working in the Mortgage Department as well as

American Bank Center working in the Commercial and

Ag Department. Chelsie graduated from Towner High

School and attended college at Dickinson State University

earning a degree in Equine Management. In her spare

time, Chelsie enjoys working at the ranch with her family,

working with her horses and traveling to various barrel

racing jackpots, going to the lake, playing with her son

and their two dogs, and baking.

KEITH SENEY accepted the Insurance

Specialist position in the Minot Branch.

This position was previously held by James

Dufner who transferred to the Credit Service

Department in the Minot office. Keith is a Minot native, born

and raised. Before joining Farm Credit Services, he was the

General Manager for Allied Van Lines/Jobbers Moving and

Storage in Minot for over 10 years. He and his wife, Candy,

have two sons and three grandchildren and will celebrate

their 34th wedding anniversary in August. Keith’s hobbies

include motorcycle riding, traveling and spending time

with his family and grandkids spoiling them every chance

he gets.

MICHAEL LEHN recently joined Farm

Credit Services in the Minot Branch as a

Loan Officer right out of college. He grew

up on a small cattle farm in Andover, MN

where they raised Herefords and produced corn and alfalfa

for feed. Michael is currently the 7th generation on the

farm, but will reestablish his roots as the farm is running

out of room to grow because of housing development. He

grew up hunting, fishing and playing hockey for Anoka,

MN. Michael attended North Dakota State University and

University of Wisconsin River Falls where he acquired

a degree in agribusiness with an emphasis in finance.

Michael is excited to be part of FCS of ND and is looking

forward to meeting all the new faces.

Presorted StandardU.S. Postage PaidPresort Plus, LLC

3100 10th St. SW • Box 70Minot, ND 58702

MULTI-PERIL CROP INSURANCE

HAIL INSURANCE

LIFE INSURANCE

LOANS

LEASES

APPRAISALS

Minot852-1265

Bottineau228-3731

Carrington652-2836

Crosby965-2265

Rugby776-5863

Williston774-0055

Bowbells Crop Insurance

377-3703

Ward County Crop Insurance

852-5432 FCS OF ND IS AN EQUAL OPPORTUNITY PROVIDER AND EMPLOYER.

FINANCINGRURAL

COMMUNITIESFOR OVER100 YEARS.