2 F I N A N C I A L P A R T N E R

NEWS

&VIEWS

Harvesting a Profit

Are you leaving profits on the table?

Accounting and financial management can

be daunting for the uninitiated. Harvesting a

Profit introduces you to the practices of how

to make a profit, benchmark your business,

study fixed costs and measure production

efficiency in a friendly, unintimidating way that

makes learning easy. With easy-to-understand

explanations and examples, Harvesting a

Profit is a helpful guide that explains the

tough stuff in a way that makes learning

easy. You can flip through this guide at

FarmCreditEast.com/HarvestingProfit.

Or contact your local branch office for a

hard copy of this handy workbook.

Benchmarking can help improve your profitability by comparing your business to its industry peers, based on both your business strengths and areas where you fall behind. For example, if comparable businesses in your industry have a 7 percent return on assets and you’ve

been realizing only a 4 percent return, that difference sets a benchmark to help you figure out why your business doesn’t meet industry standards. Or if you’re planning an expansion or new enterprise, benchmarks can help you set realistic revenue and income expectations.

For more measures to compare your business to industry benchmarks, you can read our Benchmark Solutions Report at Farm-CreditEast.com/Reports. You’ll also find data from sample industries, including greenhouse, nursery, cash field, vegetables, fruit and dairy.

FarmCreditEast.com

Suffolk County farmland valuesFarm Credit East released a market study highlighting farmland values in Long Island’s Suffolk County. Due to intense development pressure, this eastern-most New York county has some of the most expensive farmland in the country. You can read the full study at FarmCreditEast.com/Reports where you will also find a table of Suffolk County farmland sales from 2003 to 2013 by various locations. For example:

Minimum Maximum Median2003-2008

Median2009-2013

Median

Suffolk County $25,000 $2,032,085 $86,466 $74,823 $125,000

Sample of data from report

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CEO’s MESSAGE

Bill Lipinski, CEO, Farm Credit East

Farming. Fishing. Forestry. These are

industries driven by passion. It would be

hard to find a successful ag business with-

out owners who live and breathe the work

of their enterprise day in, day out. We

know, because we share your commitment

to agricultural knowledge, capabilities,

diversity and hard work that make North-

east agriculture so important to our lives

and the economy.

The very mission of Farm Credit East

is to enable the growth of ag businesses

like yours by providing a consistent source

of credit and financial services. But our

commitment does not end there. We also

actively promote the importance and value

of Northeast agriculture to our way of

life. We do this by our economic impact

research, industry reports and ongoing

financial support for a variety of organiza-

tions that reach out to the nonfarm public.

We work with public officials at the state

and federal level to explain the benefits of

strong Northeast agriculture, commercial

fishing and forest products businesses.

And we also do this through Farm Credit

East sponsorships, grants and employees

who volunteer their time and energy to

effective programs that truly impact our

industry.

In this issue, we’re excited to present

some of these programs, which play a

valuable role in attracting new recruits and

energy into Northeast agriculture.

The first is the Farmer Veteran

Coalition (FVC), which is actively help-

ing to match veterans to opportunities

in farming and other ag businesses. The

transition from military service to farming

is a natural fit. Ag business owners feel a

strong affinity for the drive, discipline and

maturity that returning veterans bring

home to this endeavor. Farm Credit East is

proud to support this worthwhile effort.

We work with the Northeast chapters,

which have 242 farmer-veteran members

and are seeking to grow.

We also proudly support the Maine

TREE Foundation and its Teachers’ Tours

of Maine’s Forests and Mills. The tours are

an innovative, professional development

program that are changing educators’

perceptions of the career opportunities

in the forest products industry. After four

days in the woods and a Project Learning

Tree workshop, educators come away with

a better understanding of the industry’s

growing sophistication and needs not just

for laborers, but for workers with a higher

level of skill.

Programs like the FVC and the teach-

ers’ tours are doing a great job of marrying

the industry’s need for new recruits to the

recent upsurge in interest on the part of

young — and not so young — new farm-

ers. We’re excited to be part of making

that marriage work.

I would be remiss if I didn’t also ac-

knowledge the passion of our own employ-

ees, who give generously of their time and

energy to local organizations that in many

cases reflect their own involvement in

agriculture. In this issue, we’ve also shared

a small sampling of their contributions.

They make us proud!

NEW RECRUITS AND NEW ENERGY For Northeast Customers

“We also actively promote the

importance and value of Northeast agriculture to our

way of life.”


A NEW KIND OFSERVICEVeterans Returning Home to a Life in Agriculture

“ Before Iraq, I was a perfectionist . . . Now, my family is most important. I value peace and quiet and the satisfaction of watching plants grow.”

JAMIE CRITELLIFormer Army Reserve captain and owner of Floral Beauty Greenhouses in Elmira, N.Y.

5W I N T E R 2 0 1 4

C O V E R S T O R Y

S

tanding large in front of the United Nations building in

New York City, a sculpture bears the inscription, “They

will beat their swords into plowshares and spears into

pruning shears.” For thousands of returning veterans, these

words apply.

In 2013, 21.4 million men and women, or 9 percent of American

adults, were veterans.1 The Department of Veteran Affairs anticipates

that number will continue to rise.2

As these veterans return home and enter civilian life, where are they

headed? Many are returning to rural America, and some are entering

agriculture.

“Our veterans are a purpose-driven group of people,” said Michael

O’Gorman, executive director for the Farmer Veteran Coalition. “They

don’t enter the military because it’s easy. They are looking for a challenge

and to do something greater than just support themselves. They want to

support their families, their communities and the future of our country.”

“Veterans have a desire to feed their families and their communities,”

added Dr. Michele Pfannenstiel, Maine chapter president and coordinator

of New England activities for Farmer Veteran Coalition. “They saw

the hardships of food insecurity overseas and when they return home

want to ensure a comfortable, healthy lifestyle for their family and

community.”

While in the Panama Canal Zone in 2011, retired Army Colonel John Lemondes and other War College senior leaders learned about the strategic implications of the canal zone and its history. Today John farms in New York.

1 Employment Situation of Veterans Summary, U.S. Department of Labor’s Bureau of Labor Statistics, March 2014.

2 Veteran Population Projections: FY2010 to FY2040, United States Department of Veteran Affair’s National Center for Veterans Analysis and Statistics, 2014.


WHY AGRICULTURE?Many veterans were raised in rural areas, so agriculture is a

familiar lifestyle. Others studied an ag-based curriculum in college

which piqued their interest. Yet others are drawn to the outdoors,

working with their hands and making something grow.

John Lemondes, a retired Army colonel, explained, “I grew up

near farms and in high school, I worked on a farm. Then in college

I majored in ag science. I was commissioned as an Army officer

straight out of Penn State, but owning a farm was always my goal.

“While in the Army, we lived in suburban areas,” continued

John. “Somewhere between moving from one cul-de-sac to

another, my wife and I decided we wanted a rural lifestyle for

our three children. That’s when we set our goals on owning our

own farm. This decision was a huge risk, but as my retirement

from the service approached, we were fortunate to purchase a

400-acre piece of land in Jamesville, N.Y.”

One of John’s military assignments helped him decide what to

do with his 400 acres of open space. “For three years, my team and

I were responsible for development of all textile-based individual

equipment, clothing and parachutes for the Army. In that position

is where I first I learned about sheep, wool and textiles.” Now John

and his wife own a flock of 23 sheep, with plans to grow.

Jamie Critelli, former Army Reserve captain and owner of

Floral Beauty Greenhouses in Elmira, N.Y., says he got started in

agriculture because he wanted to control his own destiny. “Before

Iraq, I was a perfectionist,” Jamie said. “What matters to me

now is not what mattered to me before. Now, my family is most

important. I value peace and quiet and the satisfaction of watching

plants grow. I find there’s something therapeutic about putting

my fingers in the dirt. And I enjoy the freedom of my day-to-day.

Corporate life was not for me.”

SKILLS MADE FOR AGRICULTUREMany skills developed in the military lend themselves to

careers in agriculture. Jamie explained, “The military is not as

regimented as you’d think. Often decision making is delegated to

lower levels, allowing for flexibility and quick decision making.

After years of training, veterans don’t want to be told what to do.

Rather, we want to be told what needs to be done and then figure

out the best way to do it.

“We learned how to adapt and work under pressure, often with

no back up,” continued Jamie. “We’re trained to persevere against

obstacles and see a task through, which I found to be beneficial

when I started my greenhouse business.”

ADVICE FROM FARMER VETERANS“Some veterans are just getting started in agriculture, while

others are returning to existing operations, with many a gener-

ation removed from the farming operation. Many veterans would

like to own and farm their own land, but realize they need to build

their dream, so they look for jobs on existing operations that pay a

living wage and provide the opportunity to work with a mentor,”

said Dr. Pfannenstiel.

Michael O’Gorman agreed. “Take it step-by-step. Getting

started is not easy, so don’t jump right in. Farming on your own

immediately isn’t the only route. You’ll find lots of employment

opportunities in agriculture and ways to be involved part time to

learn the trade.”

“ I feel good about directing veterans into agriculture . . . it’s a good time to become a farmer.”M I C H A E L O ’ G O R M A N , E X E C U T I V E D I R E C T O R F O R T H E F A R M E R V E T E R A N C O A L I T I O N

SUPPORTING VETERANSPete Frizzell began his Farm

Credit East career in 2009 and

today works with Crop Growers,

LLP as a Northeast marketing

agent, serving customers through-

out New England and Long Island.

Prior to Farm Credit, Pete served

in the United States Army as a

paratrooper and infantryman,

concluding his service as a staff

sergeant.

Pete served four years on active duty, stationed in

Vicenza, Italy with 173rd Airborne Brigade and then in Ft.

Lewis, Washington, with the 2nd Infantry Division. Fol-

lowing active duty, he enlisted in the Connecticut National

Guard and served as a squad leader with the 29th Infantry

Division, during which his unit deployed to Afghanistan in

support of Operation Enduring Freedom VII.

With this experience, Pete also serves as Farm Credit

East’s veteran liaison, working with veterans interested

in entering agriculture. “I think veterans can have an

important role in agriculture — both as farm owners and

employees. Most veterans have strong self-motivation and

the dedication necessary to be successful,” he explained.

That is why Farm Credit East is committed to helping

veterans with the resources they need to get started in

agriculture. In the first quarter of 2015, Farm Credit East

will partner with Farmer Veteran Coalition to host farmer

veteran workshops to cover business planning for ag

startup businesses and to provide networking opportunities

for these new farmers.

Visit FarmCreditEast.com/FarmerVeteran for more

information on these workshops.

7W I N T E R 2 0 1 4

C O V E R S T O R Y

Michael encourages veterans to do their homework. He advises

to first figure out where you’d like to live. If you want to purchase

land, study the soil and weather for that area. Look at educational

and training programs in farming and entrepreneurial skills.

Use your GI benefits to find training programs and to help with

expenses. Take advantage of training or employment on a farm.

Then, put together a small, but efficient team of advisers. The most

crucial player on this team should be someone who has actually

farmed.

John can attest to this advice. “It’s not as easy as just buying a

farm. Actually, finding a real estate agent competent in purchasing

farmland is a challenge,” he says. “And you need to think through

the capital expenses. Things that may seem simple take longer

than you’d expect. And you need to be prepared for them.”

Jamie agrees that planning is a key piece of the new venture.

“Be sure to have a Plan B, C and D, in case something goes wrong,

because it will. Agriculture is different from most trades. You’re

not going to learn how to farm from a textbook — you need to

actually do it. And it’s tough, because you have no set hours and

you care for something that’s alive. Farming takes a personal

investment of time and resources.

“Looking back, I would have done some things differently,”

continued Jamie. “I probably would have started smaller and

maintained an off-the-farm job while the business grew. In the

early stages, making ends meet was always a worry. But we were

persistent and able to diversify to include vegetables in the mix,

which helped the business grow.”

Jamie says he’s learned a lot already, “You don’t need to do

everything right. You’ll learn from your mistakes. Along the way,

I learned to seek strong mentors and hire employees smarter than

me. Have a great banker and lawyer — and keep them involved.

Network as much as you can and keep that network alive.

“And make sure you have fun. While it’s hard work, the

rewards outweigh the risks,” Jamie encourages, “When you find

the niche that you enjoy, go after it.”

PROGRAMS TO HELP Challenges veterans face in getting started in agriculture

include access to land and credit and developing the business

planning, financial management and entrepreneurship skills

needed to own a business.

“Many veterans are interested in getting started, they just don’t

know how,” said Michael O’Gorman. “As an industry, we need to

create a network for them. They need support from both veteran

and industry groups.”

To help fill the industry gap, Michael founded the Farmer

Retired Army Colonel John Lemondes with his wife, Martha, and two youngest children at their

farm in Jamesville, N.Y.


Veteran Coalition (FVC) in 2007. “I saw more and more statistics

showing the high number of veterans returning to rural America.

It seemed the more rural the area, the greater the number of

veterans and some of the highest unemployment rates.”

The two missions of the FVC are to first help veterans return to

rural America and second to help those veterans enter agriculture.

FVC developed a network to connect veterans with agricultural

employment opportunities. When veterans contact the FVC, their

skills and capabilities are assessed, and then they are matched

with a farm that fits their skills.

FVC also has veterans on staff to help, including a food safety

specialist, a lawyer for legal assistance on setting up a farm and a

financial planner for business and financial planning. Of the FVC’s

3,000 members, 242 reside in the Northeast.

“I feel good about directing people into agriculture,” comment-

ed Michael. “Our veterans are relatively young and have a whole

career ahead of them. With the demand for food going up, it’s a

good time to become a farmer.”

To raise awareness of this growing segment in agriculture, the

FVC launched the national Homegrown By Heroes program last

spring as a means for veterans to market their products as veteran

grown. The Homegrown By Heroes label was developed by the

Kentucky Department of Agriculture to afford farmer veterans

the recognition, pride and consumer support of their agricultural

businesses and products.

With the national expansion of this program, any veteran or

active duty member can place a Homegrown By Heroes label on

their agribusiness signage and/or agricultural products. Since

inception earlier this year, 100 veteran farmers have signed up

across the country.

Jamie started labeling his products with the Homegrown

By Heroes label in May, and says, “It’s not just marketing. It’s

a positive differentiator. It’s a way for consumers to support

veterans with more than just words, but with actual product

purchases. And it’s a daily reminder of veterans’ service for our

country. I’ve had positive response from the public. It starts a

conversation about my service and my product.”

As the number of veterans choosing agricultural life continues

to grow, so do the benefits for all involved — including the

industry, which has much energy to gain from this proud and

purposeful new breed of recruits.

31,166 — 100,000

100,001 — 200,000

200,001 — 350,000

350,001 — 650,000

650,001 — 950,000

VETERAN POPULATION BY STATE: FISCAL YEAR 2014Just over 10% of veterans reside

in the Northeast.

Source: United States Department of Veteran Affairs

The Homegrown By Heroes label displays on veteran-grown products. This label signifies the labor of hardworking veterans who chose to become farmers and help feed their country.

9W I N T E R 2 0 1 4

SUPPORT FOR VETERANS ENTERING AGRICULTURE

FARMER VETERAN COALITION (FVC)MOBILIZING VETERANS TO FEED AMERICAPrograms:

• Farming fellowships assist veterans advance their careers in food and farming. Participants have access to resources and support services to help them become successful in the food and farming industry.

• Career development assists veterans find jobs, internships or career advancement within agriculture and agribusiness through collaborative partnerships with employers across the United States.

Learn more: FarmVetCo.org

HOMEGROWN BY HEROESHomegrown By Heroes engages consumers in a completely new way by communicating that these agricultural products represent the labors of hardworking veterans who became farmers to feed the nation. The Homegrown By Heroes label should represent au-thenticity, allowing consumers to proudly support veteran-farmers.

Learn more: HGBH.org

THE MISSION CONTINUES IT’S NOT A CHARITY. IT’S A CHALLENGE. The Mission Continues empowers veterans to serve their country in new ways by engaging them in innovative and action-oriented programs within their own communities. The programs help veterans refocus a sense of camaraderie and purpose they may have lost after leaving the military.

Programs:

• The Fellowship Program provides opportunities for veterans to serve nonprofit organizations through six-month fellowships by harnessing the strengths, skills and compassion of veterans with a passion for continued service.

• The Service Platoon Program brings teams of veterans and local partners together to tackle pressing issues and strength-en communities in the process.

Learn more: MissionContinues.org

FARM CREDIT EAST PROGRAMS Young, Beginning, Small and Veteran Farmers and Ranchers Incentive program (YBSV) offers discounts on services, such as farm accounting software, tax preparation, consulting and appraisal for up to five years. These customers also receive pay-ment on FSA guaranteed loan fees and may receive interest rate assistance.

FarmStart assists farmers in the early stages of their business when the demands for capital and financial management skills often make it difficult to establish their businesses. The program invests working capital of up to $50,000 to help beginning farm-ers’ businesses become operational. Each FarmStart participant is required to complete a business plan and monthly cash flow that serve as roadmaps for their startup business. A FarmStart advisor works with each participant to help the new business stay on track toward achieving their business objectives. (Jamie Critelli opened Floral Beauty Greenhouses in 2010 with the help of a FarmStart investment.)

GenerationNext is a seminar series focused on progressing the overall business knowledge and management ability of partici-pants. GenerationNext is optimal for young people, ages 20 to 35, who are involved in the agriculture industry and are the middle managers or the managers of a farm or agricultural business.

Learn more: FarmCreditEast.com/startup

FARM CREDIT SYSTEM SUPPORT FUNDS

FARMER VETERAN COALITION $435,000

HOMEGROWN BY HEROES $375,000

FARM CREDIT EAST SUPPORT

FARMER VETERAN COALITION IN THE NORTHEAST $6,500

THE MISSION CONTINUES $7,662

$824,162


Whatever you think you know about

the forest products industry, think again.

While many logging and processing prac-

tices have evolved and changed through

automation, perceptions of the industry as

being dangerous for workers and environ-

mentally unsound still linger.

Updating that perception is where

the Maine TREE Foundation — a.k.a.

The Maine Timber Research & Educa-

tion Foundation — comes in. A nonprofit

organization, the Maine TREE Foundation

was established to educate and advocate

for the sustainable use of forestland, with

a mission that emphasizes “the ecological,

economic and social health of Maine’s

forest community.”

Among its most effective strategies

is the Teachers’ Tour of Maine’s Forests

and Mills, a program that gives teachers

a hands-on, “into-the-woods” experience

that allows them to bring new knowledge

back to their classrooms.

SEEING THE FOREST FOR THE TREES Project Learning Tree sessions begin

four-day professional development work-

shops that give educators a first-hand

“muddy-boots” experience. Teachers meet

with foresters, loggers and other industry

professionals and visit modern timber

harvests and sawmills to understand the

full industry process start to finish.

A recent workshop group traveled from

Moosehead Lake to a harvest site where

a feller buncher, skidder and delimber

demonstrated the efficiency of today’s

more automated operations. From there,

they travelled to Moose River Lumber,

where Eastern spruce, pine and fir are

kiln-dried to produce dimension lumber.

The educators saw firsthand the automated

processes that incorporate lasers, scanners

and computers for processing lumber that

competes in international markets.

“We want people to know that there’s

a whole lot more to forestry then cutting

down trees,” said Sherry Huber, executive

director of the Maine TREE Foundation.

“Through their teachers’ experience in

Project Learning Tree, students gain an

understanding of the true nature of mod-

ern forestry.”

“We want teachers to understand

the interconnection between our forests

and the timber they produce,” explained

John Willard, forester and owner of The

Birches, a nature preserve on Moosehead

Lake. “Our focus is to get a good value

from the timber over time and have the

esthetics to maintain hiking, cross-country

skiing and snowmobiling. Some think that

we chop trees for no ultimate purpose.

The economy of much of Maine depends

on our ability to mix the land with

recreation.”

That is why the teachers are exposed

to all sides of the industry, including the

delicate balance between biology, econom-

ics and personal relationships — includ-

INTO THE TREESTeachers harvest new lessons to take back to the classroom

11W I N T E R 2 0 1 4

ing the interests of the landowner when

approaching any harvest.

John added, “We want people to know

that trees are a renewable resource that

grows like a garden — they have to be

carefully tended.”

LESSONS LEARNED AND PLANNED The beauty of the teachers’ tours and

Project Learning Tree is its applications

across all disciplines. Workshops are led by

an educator and forester, and incorporate

materials that cover math, science, social

studies and English. And the learning

doesn’t stop after the workshops are over.

Participating teachers are given cur-

riculum guidelines and multi-media materi-

als to take back to the classroom. They are

also provided with a list of resource profes-

sionals who will answer questions after

the program or may actually visit schools

to meet with students in the classrooms.

BRANCHES TO THE FUTURE OF FORESTRY

In addition to gaining valuable knowl-

edge that helps them develop a better

understanding, teachers who experience

the program become a strong bridge to the

future workforce for the forestry industry.

Says Sherry, “Students today are not

encouraged to become loggers and go into

forestry because it’s perceived as danger-

ous.” But, much of the harvesting and pro-

cessing is automated now so today’s jobs

in forestry are safer and require a higher

level of skill, which means higher pay.

Jeannot Carrier, an owner of E.J. Car-

rier — a cooperating supporter of the

program — talks about the need for work-

ers with a wide range of skills, “We are

looking for the next generation of forestry

professionals who have skills that range

from operating new computer systems,

to quickly building roads and bridges,

to making on-the-spot decisions about

the best and safest use of trees on a site.

We want to send a message through the

teachers to the students that the forestry

industry is a rewarding career.”

INTO THE TREES

Roots in our communityFarm Credit East knows how impor-tant programs like the Maine TREE Foundation and Project Learning Tree are. That’s why the Farm Credit AgEn-hancement program has awarded more than $1 million dollars in grants to organizations across the Northeast since 1996, including annual support to the Maine TREE Foundation since our program’s inception. Industry advocacy and education programs like the Maine TREE Foundation go a long way to supporting and enhancing the growth and wellbeing of our communi-ties, while helping generate a more current understanding of the forest products industry.

“The forests are a vital part of the fabric of Maine and a contributor to its overall economy,” said Fred Morton, a Farm Credit East regional manager and a member of the Maine TREE Board of Directors. “This program helps people understand how vital the industry is to our well-being and our quality of life.”

A grant from the Farm Credit Northeast AgEnhancement Program plus support from our Auburn office helps support a four-day workshop “in the woods” for 11 teachers — whose knowledge is then passed along to hundreds of students.


SharingTheir Time In the spirit of agricultural cooperatives, Farm Credit East employees have a long and rich tradition of caring by participating in a variety of charitable, agricultural and civic campaigns. Each year, our employees generously give their time, money and energy to help friends and neighbors in need, because giving back is part of our cooperative culture. Here is a sample of how employees share their time.

FCE employees invest in their local communities

Enfield Raises a Whopping $4,300!Enfield, Conn.

Employees and local farmers join forces to host an annual Farm-to-Office Fall Harvest Luncheon

at our Enfield, Conn., office. Generous Massachusetts and Connecticut farmers donate products for

luncheon recipes, including beef, milk, cheese, eggs, vegetables, potatoes, pies, bread and ice cream.

Other growers donate fall plants and decor. Employees work nights and weekends to gather fresh

ingredients, cook an abundance of food, decorate, create gift baskets for a raffle, solicit auction dona-

tions and develop an educational PowerPoint about each donating farm.

Thanks to directors, management and staff, this team raised $4,300 and Farm Credit East matched

the funds. This brought the total to a whopping $8,600 in donations to four charities, including

Massachusetts Ag in Classroom, Connecticut Agricultural Education Foundation, Enfield Food Shelf

and the Springfield Rescue Mission.

Cheryl Hart, Kerri Sears, Myra Marcellin, Nancy Cullinan,

Rachel Reel, Cindy Houle, Thea Dickson and

Lisa Morse

13W I N T E R 2 0 1 4

Batavia Donates to FFA Chapter.Batavia, N.Y.

Our Batavia branch donated $5,000 to the Medina FFA Chapter to

help support an annual New York State FFA Convention. The three-day

event draws more than 1,000 FFA members, advisors and officials from

around New York for workshops, networking and competing in career

development contests. Batavia employees Corey Kayhart and Anna Smith,

who also volunteer with local FFA chapters, helped judge the contests.

Nelda Toussaint of Toussaint Farms, LLC presents the Farm Credit East

donation to Medina FFA Chapter Treasurer Cassidy Albone. On the far

right are Farm Credit East employees and contest judges Corey Kayhart

and Anna Smith.

Middletown Walks for a Cure.Middletown, N.Y.

For the fourth year, Middletown, N.Y., employees participated in a

Relay for Life to support the American Cancer Society. They joined hun-

dreds of others in support of those battling this disease and in memory

of loved ones lost. Friends, family and customers generously contributed

more than $5,000 toward cancer research and awareness, which helped

raise the total amount to well over $200,000 that day. And thanks to

Stewart’s Shops donations, our team also held ice cream sundae events

to add more dollars to the funds raised.

‘Tis the Season.Greenwich, N.Y.

Every holiday season, Farm Credit East employees do what they can

to help local families enjoy a holiday meal and have gifts under their

trees. For example, dedicated New York employees work with the

Greenwich Central School Operation Rudolph Program to “adopt” three

children. Through this program and its generous sponsors and volun-

teers, families have a holiday dinner and lots of gifts, which bring smiles

to the faces of children in the Greenwich area.

“As a local company, we have a deep commitment to our towns and

surrounding communities,” said Chris Truso, manager of the Greenwich

branch. “The Farm Credit East philosophy is to provide quality service to

customers and reinvest in the people, places and causes that make our

community a special place to live and work.”

Our Middletown, N.Y., walkers

Ashley Kubiak, Tricia Lockwood, Jean Gallagher, Cristi Flanigan. Not pictured: Rella Getty, Jessica Getty and Erin Perkins


Is everyone out there carrying a smart phone around the farm? It would seem

so. Among the many things we learned at this year’s customer appreciation

meetings is that mobile technology is alive and well on Northeast farms!

How do we know? Because this year, customers were given handheld “clickers” so

they could cast their votes right at the meetings to tell us the things that were most

important to them. And apparently, one of those things is their mobile device. Close

to three-quarters of customers who participated told us they own a smart phone, iPad,

tablet or similar device — and almost half told us that they use their mobile device to

check email.

Message heard. As were many others — all of which provided important feedback

for us. Two major cornerstones of Farm Credit East are our customer service and

continual self-improvement. So this new twist in capturing your input was not only

fun, it was important and informative.

HERE’S WHAT REALLY CLICKED at this year’s Customer Appreciation Meetings

Farm Credit East President Scott Herring; John Caltabiano, eastern regional manager; Barry Vater, chief financial officer at Pleasant View Gardens, Loudon, N.H.; Board Chair Andy Gilbert and Board Vice Chair Matt Beaton attended the customer meeting in Bedford, N.H.

Handheld clicker

15W I N T E R 2 0 1 4

Our goals were to engage customers in an interactive dialogue,

and interactive is what we got. Asked to choose from many things

that might keep them up at night, a few customers yelled out

jokingly, “All of the above!”

The fun part of polling was that customers got to see results

displayed on a screen instantly after clicking in their answers. The

serious part was that this process gave us lots of information to

think about as we work on our business plan for 2015 and beyond.

We loved this process, and may use it again at future meetings to

hear your thoughts on how we’re doing and what we can improve.

Thanks for the great information!

At Farm Credit East, we look forward to the appreciation meet-

ings every year as an opportunity to thank customers for their

business. We meet bright, young new farmers and catch up with

farmers we’ve been proud to work with for years. We update

customers on our financial results and kick off the director nomi-

nation and election process.

Working together, these aspects of our customer appreciation

meetings epitomize this year’s theme “Helping Us Serve You Better

… We are You.”

How customers like to conduct business with Farm Credit East

• 64 percent prefer meeting face-to-face

• 23 percent would rather talk on the phone

• 10 percent favor email

• 3 percent prefer texting (TTYL!)

Online banking functions that are most valued

• 46 percent prefer online banking for easier access to your funds

• 40 percent value online use for checking account information

• Just 13 percent prefer online for checking fixed interest rates

The most efficient and valuable aspects of our loan application process

• 38 percent said the relationship with their lender is the most important

aspect

• 29 percent placed highest value in minimum turnaround time

• 18 percent are most concerned with price

• 15 percent said their loan officer’s ability to handle complex application-

related issues was especially valuable

The types of mobile devices customers use

• 73 percent own a smart phone, iPad, tablet or similar device!

The apps our customers use on their mobile devices

• 49 percent check and send email

• 23 percent check the weather

• 11 percent use their device for social media

• 6 percent use their device for other purposes

… the remaining responses ranged from 3 percent who use their device to check market information to 1 percent who use it for business purchases

How our customers choose an accounting professional

• 39 percent look for a professional who can handle complex issues

• 27 percent want an accounting professional to understand ag-related

issues. An equal 27 percent said the relationship with their provider is the critical factor

• 7 percent said price is most important

The things that keep customers up at night Answers were all over the board on this question, although 24 percent said that margin pressure topped the list.

• 19 percent cited the challenge of transferring the farm to the next

generation

• 14 percent worry most about main- taining a stable supply of labor

• 12 percent stay awake over production costs and another 12 percent said

federal and state regulation compli-ance were top of mind

• 6 percent worry about human resource issues, such as health care

• 13 percent lose sleep over a whole host of other concerns How we can improve the Farm Credit East experience

• 50 percent want more knowledge exchange, such as agricultural markets

and emerging issues information

• 32 percent say that Farm Credit East staff retention and training is especially

important

• 19 percent want financial applications for mobile devices

Most important about our customers’ Farm Credit East relationship

• 28 percent put competitive interest rates and patronage at the top of the

list

• 27 percent cited Farm Credit’s commitment in good times and bad

• 25 percent placed the most value in our local office and staff

• 14 percent said that expert understanding of their industries was most

important

• 6 percent put ownership in the cooperative at the top of the list

INTERACTIVE “CLICKERS” GIVE VOTING A NEW TWISTHere’s a sampling of what you told us through interactive polling at our Customer Appreciation Meetings:

For full results of the interactive polling, visit FarmCreditEast.com/Polling. (Note that the Mayville, Batavia and Burrville customer appreciation meetings were cancelled because of severe snowstorms in those areas of New York.)


2014 AND 2015 GOOD FOR U.S. ECONOMY

Chris LaughtonDirector of Knowledge Exchange

2.2%

2.7%

3.4%

3.3%

7.4%7.1%

1.8%1.5%

1.5%1.9%

As 2014 come to a close, the general economy looks pretty good.

While challenges remain in both U.S. and world economies,

we continue to see positive growth as we emerge slowly from

the recent recession. Most economic indicators are at or above

levels prior to the recession, and 2015 promises accelerated global

growth. It’s been on a long road back, but most economists predict

continued incremental improvement and positive growth in the

year ahead for the U.S. economy

Growth in the gross domestic product (GDP) is an important

indicator of the economy’s rate of expansion and how healthy a

country is. A country’s GDP is made up of its consumer spending,

investment spending and government spending as well as the

value of its exports minus the value of its imports. Negative GDP

growth spells recession, while positive growth shows expansion.

GDP growth in the United States is projected to come in

around 2.2 percent for 2014 and approximately 3.4 percent in

2015. Global GDP growth is expected at 2.7 percent for 2014

and 3.3 percent for 2015, with growth declining slightly in

China. Just coming out of recession, Europe is already showing

positive growth, while Japan sees a return to low growth or even

recession.

PROJECTED GDP GROWTH RATESPercent Growth for 2014 Percent Growth for 2015

United States 2.2 3.4

Global 2.7 3.3

China 7.4 7.1

Europe 1.5 1.9

Japan 1.8 1.5

17W I N T E R 2 0 1 4

FARM CREDIT EAST CALENDARDate Event Contact

Now through July 31, 2015

2016 Agricultural Views Calendar

Winter is the perfect time to submit your best fall, winter and holiday digital shots to the 2016 Agricultural Views calendar. (Of course, we hope you send in your summer and spring shots, too.)

We look for photos that show off the best of Northeast farming, horticulture, forestry and commercial fishing. And we also select photos that celebrate country life in New England, New York or New Jersey.

Only digital shots are accepted. Contest rules and an entry form as well as photos from the 2015 calendar are on our website.

To submit your best shots > FarmCreditEast.com/Calendar

January 20 to April 3, 2015

Farm Credit East College Scholarship Application Opens January 20

We award up to thirty-one $1,500 scholarships for students committed to a career in agriculture, commercial fishing or the forest products industry. We make our deci-sions based on your essay, experience, course of study and extracurricular activities.

Only applications submitted online will be accepted. Don’t delay. Apply today by submitting your complete application on our website.

To apply > FarmCreditEast.com/ Scholarship

January 15, 201511 a.m. to 12:30 p.m.

Dairy Outlook Webinar

Dairy Outlook webinar will look ahead to 2015 dairy prices, economics, regulations and policies. This free webinar will feature:

• Mark Stephenson, University of Wisconsin – Dairy economic outlook• Andy Novakovic, Cornell - Dairy policy • Karl Czymmek, Cornell - Environmental/CAFO and OSHA • Bob Smith, Farm Credit East – Legislative update

To enroll >FarmCreditEast.com/ Webinars

GOOD AND BAD IN U.S. JOB MARKETThe U.S. job market edged upward as well, with steady private-

sector job growth and a headline unemployment rate that declined

from its 10 percent peak in October of 2009 to 5.8 percent in

October of 2014.

However, problems remain in the labor market, which may

delay the Federal Reserve’s decision to raise interest rates. The

labor force participation rate, a measure of the population that is

working or seeking employment, is at its lowest point since the

1970s. Those who aren’t working or seeking employment include

students, stay-at-home spouses and retired folks. Demographics

and the large number of retiring baby boomers as well as the

comparatively small number of “Generation X” who are in the

midst of their working years are all factors. Another cause is the

significant portion of those people of working age who have

become discouraged, and simply stopped looking for work.

In addition, many jobs created since the end of the recession

are part-time or relatively low paying. Average earnings have

been slow to rise even as the labor market has tightened. We see

significant stratification in the job market, as those at the top of

the pay scale realize significant pay increases while those in the

middle and below endure little earnings growth.

PREDICTIONS FOR 2015Labor. Analysts predict continued improvement in the U.S.

labor market, although the decline in the unemployment rate

is likely to taper. As job growth continues at a moderate pace,

people are expected to return to the labor market which limits

the unemployment downside.

Stock market. The stock market is another bright spot in the

economy. The Dow Jones industrial average posted a respectable

6.9-percent return so far in 2014 and a phenomenal 14-percent

average return over the past five years. Yet while investors

prospered, returns have been slow to trickle down to Main Street,

leaving many Americans feeling left out of the recovery.

The ability of U.S. stocks to continue their growth is a big

question mark. The Fed’s tapering and unwinding of its bond-

buying program, known as “QE3” or quantitative easing, may put

upward pressure on long-term interest rates that could limit stock

market gains.

Interest rates. All eyes are on the Federal Reserve. By the Fed’s

prediction, rates are expected to rise in 2015. Although outlooks

vary, many predict rates will increase from a half percent to a full

percentage point by the end of 2015 and from 2 to as much as 3

percentage points higher than the current near-zero federal funds

rate by 2016. One thing is certain, rates have only one direction to

go; it’s just a matter of how much they will rise and when.


WASHINGTONUpdate

Political tsunami, earthquake or just another political wave? Regardless of how you see the 2014 midterm elections, they generated a lot of attention. With Republicans winning the Senate, we will see more cooperation between the House and the Senate, but whether the president and Congress will work together is a much more difficult question. Time will tell.

Republicans picked up at least eight

Senate seats with the possibility of one

more with a runoff race in Louisiana.

Republicans also increased their majority

in the House of Representative with a gain

of approximately 13 seats.

We will see significant changes in

both the House and Senate agriculture

committees. Senator Pat Roberts (R)

of Kansas, who won a closely watched

race, will chair the Senate Agriculture

Committee and Congressman Mike

Conaway (R) from Texas will take over

in the House.

CHANGES IN THE NORTHEASTThe Northeast states had no changes in

the United States Senate. While the race between Senator Jeanne Shaheen (D-NH) and Scott Brown (R) was close, Shaheen won this race as the incumbent. There were five Northeast house seats that changed from Democrat to Republican, including: MAINE’S 2ND CONGRESSIONAL DISTRICT

Bruce Poliquin (R) won this open seat race. Congressman Michael Michaud (D) did not seek reelection to Congress so he could run for governor, but Michaud was defeated by incumbent Governor Paul LePage. Poliquin is a businessman and Maine state treasurer. This district covers the northern three-quarters of Maine.

NEW HAMPSHIRE 1 Frank Guinta (R) defeated incumbent

Congresswoman Carol Shea-Porter (D). This is the fourth consecutive time that this district flipped from one political party to the other. NEW YORK 1

Lee Zedlin (R) defeated incumbent Congressman Tim Bishop (D) in New York’s 1st congressional district, which covers a significant portion of Suffolk County (eastern Long Island). Zedlin previously served in the New York State Senate. NEW YORK 21

Elise Stefanik (R) won this open-seat. Congressman Bill Owens (D) decided not to seek reelection. Stefanik, at 30 years old, is the youngest woman elected to Congress. Stefanik indicated that she is interested in serving on the House Agriculture Committee. This congressional district covers northern New York. NEW YORK 24

John Katko (R), a former federal prosecutor, defeated incumbent Congressman Dan Maffei (D). This district includes the Syracuse area west to Wayne County.

Robert A. SmithSenior vice president for public affairs

What’s Ahead after theMidterm Shakeup in Congress

19W I N T E R 2 0 1 4

Other new House members were elected in seats that did not switch parties, including:

• Seth Moulton (D) in Massachusetts 6, which covers the

northeast corner of the commonwealth

• Tom MacArthur (R) won in New Jersey 3, which is the

middle part of the state and includes significant cranberry

production

WHAT ABOUT THE ISSUES?That question is heard in discussions involving House and Senate

Republicans. I wish I had a crystal ball.• Republicans expressed strong opposition to executive

actions taken by President Obama on immigration. While

some Republican leaders want to take significant action on

immigration issues before the 2016 presidential election,

it will be a difficult task. Farm Credit East will continue to

work with other farm organizations to establish a new ag

guest worker program administered by USDA.

• Tax reform. We will hear a lot about tax reform. There

is room for negotiations, but changes in tax policies and

programs often create opposition as the legislation is

further developed. (No one likes to lose deductions).

Modest tax modifications — or at least longer extensions

of current tax provisions — are possible.

• Environmental issues. As the administration moves

regulatory actions ahead in order to expand the federal

government’s regulatory reach (“Waters of the United

States” is an example), Congress will attempt to kill those

regulations by deleting funding. Farm Credit East joined

Farm Bureau and other organizations to oppose an EPA

regulatory expansion by redefining “Waters of the United

States” under the Clean Water Act.

• Agriculture committees and the farm bill. With passage

of a new farm bill in early 2014, we don’t expect major

changes to farm policy. Agriculture committees will likely

focus on farm bill oversight and reauthorization of the

Women Infant and Children nutrition program.

FARMWORKER OVERTIME PAYThe New York State governor and state

legislature are considering legislation to

establish mandatory overtime for farmwork-

ers. Farm Credit East’s economic impact

analysis of this change found that with over-

time pay required after 40 work-hours per

week and a 72-hour work week, labor costs

would increase by $120 million and reduce

net farm income by 10 percent. That means,

more than 1,000 New York farms would go

from a profit to a loss position.

For a copy of the report, email

[email protected].

HELPING FARMERS ACCESS FARM LAND Farm Credit East and CoBank recently

contributed $10,000 to Land for Good

in New England, with both organizations

jointly providing $5,000 each toward this

program.

Through innovation, education, advocacy

and consulting, Land For Good helps farm-

ers get on to, hold and transfer farmland in

New England and beyond. Its mission is to

ensure the future of farming in New England

by helping farmers and future farmers gain

more access to farmland.

“At Land For Good, we will use the dona-

tion to support educational programming for

farm seekers to acquire land and for retiring

farmers around succession planning,” said

Kathy Ruhf, Land For Good executive

director. “We will also leverage these funds

to hold a national conference on farmland

access, tenure and transfer in 2016. These

issues are key challenges for farmers.

Practitioners and policymakers are eager to

learn about program and policy responses.”

For more information on Land For Good’s

efforts and programs, visit LandForGood.org.

In Other News:

A LOOK AT THE INCOMING 214TH CONGRESSIONAL SESSION (2015-2016) Republicans Democrats Undecided*

House 246 187 2 (218 of 435 is a majority)Senate 53 46 1 (51 of 100 is a majority)*A number of contested races still have recounts.

FINANCIAL PARTNER is for the customers, employees and friends of Farm Credit East. Farm Credit East is a farmer-owned lending cooperative serving the farm, commercial fishing and forest products businesses in Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York and New Jersey. Part of the national Farm Credit System, Farm Credit East is a full-service lender dedicated to the growth and prosperity of agriculture.

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, or Kristie Schmitt, Assistant Editor, Farm Credit East, 240 South Road, Enfield, CT 06082-4451. CALL: 860.741.4380. E-MAIL: [email protected].

Copyright © 2014 by Farm Credit East, ACA. All rights reserved. Farm Credit East is an affirmative action, equal opportunity employer.

FINANCIAL PARTNER is printed on recycled paper.

Farm Credit East240 South RoadEnfield, CT 06082-4451

Address Service Requested

PRSRT STDU.S. Postage

P A I DPermit No. 690Springfield, MA

The Team at Farm Credit East

Wishes You Happiness and Prosperity Throughout the Coming Year.

We Look Forward to Working with You in 2015 and in Years to Come.

financial partner winter 2014

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