Spring 2016

TODAY
AgStar
SPRING 2016
Trusting Farm Credit from the Beginning
Home Sweepstakes
Open Letter to Landlords
CLIENT PROFILE
The Petersons have been in the dairy business for three generations.
Trusting Farm Credit from the Beginning
“It’s comforting to know
that AgStar has a handle
on agriculture loans so we
know our decisions are
more informed so we have
confidence in our
decisions.”
— Roger Peterson
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AgStar TODAY
F
rom an early age, Roger Peterson knew he wanted to farm. Roger embarked on his
farming career before graduating high school, at the age of 17. Starting out with
approximately 50 cows, Roger gradually took steps toward buying his first farm in
1980, eventually purchasing his father’s farm in the 1990s. LeRoy Peterson, 89, still
helps on the farm today. Other helping hands include Roger’s wife, Bev; and the next
generation: Brad, Michelle and Kevin.
Both Roger and Bev Peterson grew up on dairy farms near River Falls, Wisconsin. From
the beginning, they’ve trusted the Farm Credit System to partner with them in their family
business. “The advantage is that they focus specifically on agriculture loans,” says Roger.
“It’s comforting to know that they have a handle on it so we know our decisions are more
informed.”
Roger obtained his first loan from Production Credit Association, a predecessor of what
AgStar is today. Later, Roger and Bev secured loans from Federal Land Bank Association
and Farm Credit Services; and today they work with Pete Stern, Associate Vice President at
AgStar. Pete and the Petersons have been working together for more than 10 years.
“The Petersons are committed to agriculture,” explains Pete. In 2010, the Petersons
hosted Wisconsin’s Farm Technology Days. Their goal was to educate the general public
about the role of agriculture in their region. The event drew 40,000 visitors over the course
of three days. They also are active on AgStar’s nominating committee and other boards
With their parents, Brad, Michelle and Kevin Peterson produce over 28,000 gallons of milk from 300 cows.
around the River Falls area. “They are always willing to listen and are eager to learn,” Pete
says. “I think that’s why our relationship works so well.”
Today, their family farm has more than 300 cows, with a herd average of 28,200 pounds
of milk. They also grow more than 1,700 acres of corn, soybeans and alfalfa hay. The family
sells Holstein steers and does custom work for many neighbors as well.
As part of the Farm Credit System, AgStar is proud of its long-term relationships with
families who farm. And 2016 is a great time to celebrate all of our clients, as Farm Credit
commemorates its centennial anniversary. The federal government established Farm
Credit on July 16, 1916, and it’s been helping farmers ever since. This is an achievement
reached by few, and it comes at
a time when agriculture’s role is
as important as ever.
Farm Credit and AgStar
Financial Services are
committed to supporting
organizations, programs and
initiatives dedicated to
advancing agriculture — today
and tomorrow. From
encouraging the new
generation of agriculture
producers and youth, to helping
educate consumers about the
importance of agriculture,
Bev and Roger have worked with Pete Stern from AgStar for
AgStar’s commitment to
more than a decade.
thriving rural communities
extends beyond providing
financial services — just as our clients’ commitment reaches farther than the fence posts
marking their property .
It is because of our client-stockholders, like the Petersons, that we have reached this
significant milestone, and we are privileged to mark this milestone together. n
AgStar TODAY
is published by AgStar Financial Services, ACA.
The mission of TODAY is to educate, inform and
connect with our clients and supporters. TODAY
is copyrighted in its entirety.
Editor Brittney Wacholz
Assistant Editor Amy Barnett
Contributors Amy Barnett, Terri Fast, Rod
Hebrink, Kirstin Merseth, Krystal Ohlhaber, and
Glenn Wachtler
Design Stevenson Creative, LLC
Send comments or suggestions to
[email protected].
CONTACT US
866-577-1831 AgStar.com
AgStar Financial Services is an equal opportunity
employer and provider. © 2016 AgStar and AgStar
Financial Services are registered trademarks of
AgStar Financial Services, ACA. All rights reserved.
Spring 2016
3
RURAL COMMUNITY SUPPORT
Tuition Assistance Program
Provides Educational Funding for
Young and Beginning Farmers
W
Ryan Peterson is enrolled in St. Cloud
Technical & Community College’s (SCTCC’s)
Adult Farm Management Program, aided by
tuition assistance from AgStar’s young and
beginning farmers program.
“In order to stay
competitive and
continually make a profit,
it’s important that I
understand all aspects of
the operation, including
commodity markets and
farm financial
management.”
— Ryan Peterson
4
AgStar TODAY
hat if someone offered you free money to expand your knowledge and learn
practical action steps that you could apply to your operation? That’s a no-brainer,
right? Especially if the money supports something you were going to do anyway.
Programs designed to help young and beginning farmers educate themselves are out
there. The challenge for many is making the time to find them and then jumping through
all the hoops to apply.
Luckily for Ryan Peterson, AgStar makes it easy for qualifying clients to take advantage
of funding for educational opportunities by providing tuition assistance to farmers,
spouses or partners who have been farming for 10 years or less.
Ryan, 29, is a crop and livestock producer from Clear Lake, Minnesota. He is a fourthgeneration farmer living and working the land that has been in his family since 1920. Ryan
and his parents, Alan and Laurie, grow 1,700 acres of seed corn, field corn, soybeans and
kidney beans. They also manage 350 head of holstein steers.
A carpenter by trade, Ryan worked off the farm for seven years, building houses in the
St. Cloud area. He had an opportunity to join the family operation about four years ago,
when his grandfather was ready to slow down.
Taking some time to work away from the farm has its advantages, according to Ryan.
“Stepping away from the family business and learning how things work in the real world
was a great educational experience for me,” he explains. “It helped me understand how
managers and business owners have to make some tough decisions in order to reach
their goals. It made me see my dad, and the way he runs the farm, through a different
lens.”
Additionally, by working off the farm, Ryan gained experience and expertise he could
bring back to benefit the operation. His building background and ability to fix things
means they now save on equipment repairs and building maintainence. It’s worked so
well, in fact, that Ryan’s youngest brother, Nick, is following his lead. He obtained an
agronomy degree and is a seed salesman in addition to helping on the family farm.
Discussions are already in the works for Nick to transition into the operation more as Alan
gradually works toward retirement over the next decade. Their middle brother, Matt, is
passionate about law enforcement and is currently working as a police officer.
As advantageous as Ryan’s experience and education off the farm has been, he also
strives to deepen his understanding regarding the business of farming. “In order to stay
competitive and continually make a profit, it’s important that I understand all aspects of
the operation, including commodity markets and farm financial management,” he says.
That’s why he enrolled in St. Cloud Technical & Community College’s (SCTCC’s) Adult
Farm Management Program. And when his AgStar Financial Services Officer, Mark Koch,
mentioned AgStar’s Tuition Assistance Program for young and beginning famers, Ryan
applied right away.
“You don’t really expect free financial help from your lender,” Ryan says. “The
opportunity was just too good to pass up. We’re really lucky to work with Mark. He knows
our business, understands our goals and comes up with creative ways — large and small
— to help us get where we’ve decided we want to go. And AgStar makes it simple to
apply. It was the easiest $500 bucks I’ve ever made.”
AgStar FSO Mark Koch alerted Ryan to the
tuition assistance program.
The application consists of just one page, most of which requests basic identifying
information like name, age and location. Add in the name of your AgStar specialist, the
school you are attending and a few sentences on how the program will add value to your
business. Then, attach a copy of your transcript and you’re good to go.
The funding is provided by AgStar’s coroprate giving program, AgStar’s Fund for Rural
America, and has been available since the program’s inception in 2001. Each year, the
Fund board allocates $10,000 for the tuition assistance program and continues to review
and approve applications until the money is awarded.
“I can’t remember a time when a client of mine was ever turned down,” Mark adds.
“They can receive up to $1,000 (in $500 increments) in their lifetime, so it can really make
a difference, especially in years like this when margins are so compressed and every
penny counts.”
As for Ryan, he says they see a positive return on the program every year, particularly
when tax time rolls around. “I’m learning more and more,” Ryan says. “The benefit of this
program is definitely worth the investment when preparing our year-end financial
reports.
“Those numbers are key when working with our lender, tax provider or other advisors
on growing the operation. Having everything in order and being able to create an
accurate financial picture of the business is really important. You have to know where
you’ve been and where you are now in order to figure out where you want to go.” n
“$500 can really make a
difference, especially in
years like this when
margins are so
compressed and every
penny counts.”
— Mark Koch
Spring 2016
5
HOME MORTGAGE SERVICES
AgStar Surprises $20,000
Home Sweepstakes Winner
T
he holidays came early for Melanie Post last year when she became the first
recipient of a new sweepstakes offered by AgStar. Melanie was finishing her day as
a library paraprofessional at Pleasantview Elementary, when in came a flood of
green balloons, an oversized $20,000 check and visitors from AgStar.
Vice President Jenny Doering and her team approached a surprised Melanie. “Melanie
Post? Do you know why we are here today?” asked Jenny. “We are here to congratulate
you on winning the sweepstakes!”
Visibly astonished, Melanie responded with excitement, “Are you kidding me?”
AgStar launched the Home Sweepstakes last May, accepting entries until late
November. The contest had hundreds of entrants interested in buying, building or
refinancing a home in Minnesota or Wisconsin. Melanie had entered the Sweepstakes
while on the AgStar.com website. Her husband, Brian, wasn’t aware she had entered the
contest until he received a phone call asking him to meet the AgStar team at the school
because Melanie had won something significant.
“I always enter these things but never expect to win,” says Melanie. “I guess I can’t say
that anymore.”
Melanie expects to put the $20,000 toward new windows, carpeting and flooring for
their 15-year-old Lakefield, Minnesota home.
What would you do if you were Melanie? Start dreaming now, because you could be a
winner in AgStar’s 2016 Home Sweepstakes. Entries are now being accepted at
AgStar.com. In addition to a $20,000 grand prize, five lucky recipients will be awarded
$1,000 to help create the home of their dreams. No purchase is necessary to enter. n
“I always enter these
things but never expect
to win. I guess I can’t say
that anymore.”
— Melanie Post
Brian and Melanie post after winning
$20,000 from AgStar's Home Sweepstakes
6
AgStar TODAY
Buy, Build and Refinance with AgStar
“Are you kidding me?” Melanie Post reacts
when learning she was a winner in the
AgStar sweepstakes.
(Photo courtesy Lakefield Post)
Are you planning to build, buy or refinance a home, cabin or hobby farm? AgStar
has a variety of home mortgage products, and its focus on financing properties in
rural Minnesota and western Wisconsin means that AgStar often can provide
options that many traditional lenders cannot.
AgStar can help with:
• Buying — AgStar’s home mortgage products
offer long-term, fixed-rate options to finance
everything from a hobby farm or small-town
dream home to a hunting cabin in the woods.
• Building and remodeling — Whether you are
building a new home, remodeling or buying a
home to renovate, AgStar has financing to fit your
project.
• Refinancing — There are many reasons to
consider refinancing. If you want a better interest
rate or are preparing for a large purchase, AgStar
may have the the ideal option for you.
Visit AgStar.com today to learn how AgStar can help
you when you’re ready to buy, build or refinance. n
Spring 2016
7
IT'S BACK AND BIGGER THAN EVER!
Bring Home One of Six Prizes
Including a Chance to Win up to
$20,000
Last year one lucky family won $20,000 toward the place of their dreams.
This year we're giving away even more prizes!
• One (1) Grand Prize winner will receive $20,000 towards their dream home.
• Five (5) First Prize winners will receive $1,000 to help enhance the home of their dreams.
Finance Your Dreams
Whether you’re looking to build your dream home in the country or a small town, have your heart set on
a hobby farm or a cabin in the woods, AgStar can help make your dreams a reality
with long-term, fixed-rate options tailored to your needs.
Find out more and enter to win at
AgStar.com/Home-Sweepstakes
AgStar Financial Services is an equal opportunity lender, employer and provider. © 2016 All rights reserved.
2016 AgStAR BoARd/NomiNAtiNg Committee
Leaders Wanted
Do you know someone who is
passionate about agriculture and wants
to gain leadership experience? AgStar is
looking for new members for our Board
of Directors and Nominating Committee!
The Board includes 14 elected directors,
plus outside directors. The purpose of
the Board is to provide high-level
direction to ensure growth and success
of the association. The Board sets
policies to guide management in daily
operations and serves as a trustee for
the investments of shareholders.
Board members attend 16 to 18 meetings and other event each year. The annual
time commitment is approximately 45 days.
The Board has adopted the following key leadership traits for current and
prospective directors:
•
•
•
•
•
•
•
•
Strategic Leadership
Governance & Accountability
Core Business Knowledge
Agility
Client Focus
Engagement Practices
Ethics, Integrity & Transparency
Stewardship
The Nominating Committee is a crucial group of people who are a major part of
the election process. The objective of this committee is to place into nomination
qualified voting stockholders for election to both the Board of Directors and
Nominating Committee. The Nominating Committee meets once or twice in the
spring.
If you think you or someone you know would be a good candidate to fill one
of these positions, please apply! Applications are due May 27, 2016.
2016 AgStAR BoARd/NomiNAtiNg Committee AppliCAtioN
I am interested in or know someone who might be a good candidate for: n Board of Directors n Nominating Committee
Please return by May 27, 2016 to:
Election Coordinator
c/o AgStar Financial Services
1921 Premier Drive
P.O. Box 4249
Mankato, MN 56001
Or email to [email protected]
or by phone at 507-344-5056
Name ___________________________________________________________________________________________________________________
Address _________________________________________________________________________________________________________________
City, State, ZIP ____________________________________________________________________________________________________________
Phone # _________________________________________________ Email _________________________________________________________
County __________________________________________________________________________________________________________________
All interested parties will be asked to submit a written biography to the Nominating Committee.
Spring 2016
9
FARM FINANCES
Open Letter to Farm
Farmland rental rates are in flux. Many clients I work with are negotiating rental rates for
coming years lower than where they’ve been in the past few years. How do you build a rapport
and work together to cultivate a mutually beneficial relationship with your landlord? The first
step is to establish a connection and put a face to the farm in any way you can. After talking to
many clients and hearing about the challenges they’re facing, I drafted an open letter to
landlords to give renters a jump start on communicating and negotiating in good faith.
Dear Landlord,
By Glenn Wachtler,
Assoc. Vice President
Financial Services,
AgStar Financial Services
“While we have faced
low crop prices in the
past, experts believe this
time may be more of a
long-term, cyclical
downturn.”
12
10
AgStar TODAY
There is a lot of volatility in virtually every agricultural commodity market right now. And
things don’t look like they will improve any time soon. Have you considered how the
current economic climate in the ag industry affects us?
Regardless of the markets, my first priority has always been—and will continue to be—
practicing good stewardship of your land. This includes employing appropriate farming,
fertility and conservation practices. My success depends on taking care of your land, and
that will never change.
Factors influencing the markets
Agriculture is facing some serious challenges as we move forward. The same emerging
economies that created very good demand for all commodities in the early 2010s
(including corn, soybeans and products such as ethanol) are now struggling with
problems created by unsound investments in their own economies, overspending,
monetary policy and politics. Closer to home, U.S. farmers continue to increase
productivity and farm more acres. The USDA reports a 33% decline in acreage for
the Conservation Reserve Program since 2007. Those acres are now used primarily
for producing corn, soybeans and other major commodities. Corn prices have
experienced more than a 50% drop from their highs of nearly five years ago.
lower for longer
While we have faced low crop prices in the past, experts believe this time may be
more of a long-term, cyclical downturn. They have described the commodity
outlook as “lower for longer.” As I mentioned, nearly all commodities are going
through the down cycle. The CRB commodity index is down almost 60% in the last
five-year time frame. Demand for commodities was encouraged by very low
interest rates, along with quantitative easing by our government and others. The
supply responded to the new, increased demand. Now, after the monetary policy
has come and gone, we are left with an oversupply of most commodities and
faltering demand from other countries not able to withstand this rapidly changing
environment.
Landlords
CHART: Tenth District Cash Rents
Federal Reserve Bank of Kansas City, Ag Credit Survey, 4th quarter 2015
Percent change from the previous year*
25
25
Nonirrigated
20
20
Irrigated
Ranchland
15
15
10
10
5
5
0
0
-5
-5
-10
-10
2009
2010
2011
2012
2013
2014
2015
*Percent changes are calculated using responses only from those banks reporting in both the past and current quarters.
How this Will Affect You
The amount of expense allocated to owning and renting land is the largest lineitem expense in typical corn, soybean and other farming operations. Some
expenses, such as fuel and fertilizer, have already dropped in price. However, the
savings will not be enough to offset the major cost of renting land. The Federal
Reserve Bank in Chicago has recently published (February 2016) that farmland
selling prices have dropped by a total of 7.5% since the middle of 2013. At the same
time, the Federal Reserve Bank of Kansas City reports cash rents decreasing by
approximately 5% last year and it expects the trend to continue*.
I am in the process of reviewing my projected budget and have outlined some
proposed changes for our agreement, which I have attached. Having the resources to
continue to care for your land in a responsible manner and provide you with a strong
commitment to pay rent on time is very important to me. In addition, I am very respectful
of any sacrifice that you also may endure as part of the overall current economic
conditions.
Finally, please do not hesitate to contact me with any questions or concerns. I value
your input.
Sincerely,
Tenant Farms
*Bankers response to the 10th District expected rent trends in February 2016 publication
Spring 2016
11
FARMING NOW
Over the
Fence Post:
Producer Idea
Exchange
if you have tips you’ve found helpful for your operation
and would like to share, send to
[email protected].
12
AgStar TODAY
Justin Kennedy
Rochester, MN
Farming technology continues to
evolve quickly. do you think
taking advantage now will help
in the future? What benefits of
technology have you seen?
I’m spending a lot more time on
agronomy instead of paying
someone else to do it.
I’ve gone to school and spent time with fertilizer professors at
both U of M and Iowa State to become as cost effective and
efficient with fertilizer application and prescription as I can. I
purchased software so I can do the analysis on my own. This
used to cost me $8-$10/acre from a co-op, but doing it myself
gets the cost down to $2/acre.
In addition to the savings, the technology has opened up
doors for me to have conversations with people I normally
wouldn’t have before and to learn more through them. For
example, for seed, I’ve had triple-stack corn over the last five
years. I’m starting to re-evaluate if that’s profitable or not. I visit
with agronomists at Iowa State and U of M to find out what I
should be doing for next year.
How is your business planning different this year than in
years past?
Looking at seed — am I using the most profitable seed for the
hybrid I have? Just taking a look at all of that — seed treatments,
I’ve done a lot of variable rate over the last two to three years
(fertilizer application).
Agriculture is cyclical we knew the correction was going to
come. I think a lot of us have gotten a little sloppy over the last
four or five years with family living expenses and decisions in
general. The markets made it easy to be that way. There is a
larger margin for error and some comfortableness that comes
with high prices, but it’s not normal.
I’m taking myself off autopilot — just because I’ve done
something in the past doesn’t mean I should keep doing it. I feel
pretty confident. My kids get to see me making these decisions
and it’s a good learning experience for them.
“Agriculture is cyclical — we knew the correction was going to come. I think a lot of us have
gotten a little sloppy over the last four to five years with family living expenses and decisions in
general. The markets made it easy to be that way ... I’m taking myself off autopilot — just
because I’ve done something in the past doesn’t mean I should keep doing it.” — Justin Kennedy
Bruce Brockman
Blue Earth, MN
How has diversification played
into your strategy in the past?
What plans do you have to
increase diversification in your
operation for 2016?
We are blessed to have hogs and
cattle, as well as growing corn and
soybeans, so we always have
money coming in somewhere.
We’re considering putting up a (contract) finishing barn for my
son as he currently works in town and wants to farm full time.
to remain profitable in today’s environment, it is necessary
to make strategic adjustments to inputs and expenditures.
What areas are you exploring to reduce operating costs?
I’m 66 years old, and farm with my brother, my 35 year-old son
and my nephew. The younger guys seem more conservative
because they’re pinching pennies — they have to. We are being
very careful with inputs. We aren’t doing the “Foo Foo” things we
used when corn was $7. We’ll manage crops this year on a
weekly basis and apply nitrogen with a sprayer at a later date if
we need it.
One thing we won’t be changing is seed. We’re still planting
the best seed we can get ahold of so we don’t risk not getting
the best crop.
We are comfortable with the machinery we have coming off
of some great years, so planning on laying low on equipment
purchases this year.
Farming technology continues to evolve quickly. do you
think taking advantage now will help in the future? What
benefits of technology have you seen?
We’ve kept up with technology. We’ve been very fortunate to be
able to not only invest in technology, but we have the younger
generation to run it for us.
We have made investments in the past Zion 66. They do save
money, time and make farming easier. Sometimes the older
generation takes a bit to come around. We get set in our ways
but we realize it’s important to keep up.
How is your business planning different this year than in
years past?
We did have some cash rents lowered by some landlords.
We forward contract our crops, which has worked well, and
we’re doing that again this year.
We did have the opportunity to buy land next to our farm,
but it wasn’t as quick of a decision as it used to be. We are just
being careful with every purchase.
greg entinger
Mankato, MN
How has diversification played into your strategy in the
past? What plans do you have to increase diversification in
your operation for 2016?
In addition to farming, I own an engineer and design business —
working mainly in production design for the food industry/mass
produced food. Think pizza plants and French fries. I have two
careers — I LOVE design work and I LOVE farming. I’m looking at
ways to merge the two. I worked with my dad until he passed
away in 2012. We were in transition, and he passed away before I
could learn everything. The first year on my own, I knew all the
physical work that came with farming but not the marketing
and book work. The book work is coming around okay and I feel
fairly comfortable with that. A while ago, I started thinking about
how I could bring my engineering and design into farming — so
far I’ve put clutches on a tractor and I’m using GPS on my sprayer.
to remain profitable in today’s environment, it is necessary
to make strategic adjustments to inputs and expenditures.
What areas are you exploring to reduce operating costs?
I have the technology to apply variable rate fertilizer — I’m not
doing it yet, but putting in the work (soil sampling, testing) to
help make the decisions. I’m also looking at maybe variable rate
planting in two to three years. The tools are there — you need to
be able to figure them out.
I’ll monitor yield differences when cutting back fertilizer, do
some trials, tests and keep records to compare.
Recently, I signed up for the USDA’s “Conservations
Stewardship Program”— it was a challenge to get in, but it is a
great program. I am big on documentation, so I’ve enjoyed it.”
Spring 2016
13
“Four years ago, a decent rate of return was expected ... The last two to three years, we have had
a different mindset. We have had to look for ways to lower cost of production, risk management
and debt structure — they all play a part in the overall picture.” — Tom McCue
Farming technology continues to evolve quickly. do you
think taking advantage now will help in the future? What
benefits of technology have you seen?
I am making a transition to strip tillage from traditional. It’s a
major change. I live in the hills of Le Sueur County, Minnesota.
The previous two springs brought heavy washouts. I carefully
evaluated options like, “no-till,” and was introduced to strip till. I
decided that no till wasn’t the best option because I was scared
of heavy rains washing out fertilizer since it didn’t have
anywhere to go. With strip tilling, the fertilizer is mixed in and
applied right where crops need it. There are benefits on crops
and on soil management. And the process builds top soil.
The whole strip tilling process has been educational. I’ve
been in contact with other farmers in the area (Cleveland and
Northfield) working on strip tilling. They’ve been a big help in
teaching me what works. We learn from each other.
A big benefit to strip till is it lessens the amount of fuel by
about 3.5 gallons per acre ($12/acre savings) when compared to
commercial tilling.
How is your business planning different this year than in
years past?
I’ve been doing a lot of shopping around this year compared to
years past. I had been working with one fertilizer company
(same company Dad used for years) but found another
company with more experience in strip tilling since I’m taking a
calculated risk on this new technology.
luke Scherger
Rochester, MN
How has diversification played
into your strategy in the past?
What plans do you have to
increase diversification in your
operation for 2016?
We grow cash crops and raise
hogs in our operation. We are
able to raise one-third of our
fertilizer from the hogs.
We’ve decided that, rather than diversifying with different
types of crops, we’re going to focus on being better at one crop.
With the hogs, we are able to raise corn more effectively than
beans. The cost per acre is less, so we’re doing more corn.
to remain profitable in today’s environment, it is necessary
to make strategic adjustments to inputs and expenditures.
What areas are you exploring to reduce operating costs?
We looked at our nitrogen program for ways to increase
efficiency. We’re considering later application, and split
application on side dressing.
We are shopping every vendor for every input. Everyone
should, even if you’ve used them for a long time. We’ve found
there is money on the table every time. You have to ask. That
14
AgStar TODAY
process started for us last fall. The vendors have gotten aggressive
too. Be willing to listen to their bids; be willing to switch vendors.
Even if you don’t switch, you have ammunition for discussion with
your current vendors. If you view them as a partner, they’ll listen.
Farming technology continues to evolve quickly. do you
think taking advantage now will help in the future? What
benefits of technology have you seen?
We were early adapters of RTK and leaped to strip tilling years
ago. We haven’t really pushed RTK to get into variable rate
planting or fertilizer application yet. We run bare-bone low rates
on manure application. We try to keep fertilizer down.
How is your business planning different this year than in
years past?
We shifted gears three years ago; we knew prices wouldn’t last.
We’ve been trying to maintain working capital from years past
— it’s the key to getting through these times.
tom mucCue
Mankato, MN
to remain profitable in today’s
environment, it is necessary to
make strategic adjustments to
inputs and expenditures. What
areas are you exploring to reduce
operating costs?
To cut costs, I’m planning to use an
alternative fertilizers. We have been
using chicken manure to eliminate the need for macronutrient
application.
We have been looking at ways to reduce costs over the last
couple of years, sticking with things that work, and considering
other ways to save.
This year, we will be leveraging our high production fields
and plan on being less aggressive with marginal ground.
Farming technology continues to evolve quickly. do you
think taking advantage now will help in the future? What
benefits of technology have you seen?
I think you always have to be open to technology. If you don’t take
advantage of new technology at the beginning, it seems like
you’re always playing catch-up. We have been using variable rate
seeding, variable rate nitrogen and nitrogen monitoring programs
to properly apply the correct amount of nutrients needed.
How is your business planning different this year than in
years past?
Four years ago, a decent rate of return was expected with the
commodity prices at the time. The last two to three years we
have had a different mindset. We have had to look for ways to
lower cost of production, risk management and debt structure
— they all play a part in the overall picture. n
VIEW FROM THE FIELD
A
s you know, AgStar is committed to your success. We’re by your side as
your partner, delivering the insights and guidance you’ve come to
expect and count on from your financial services provider. To be your
trusted advisor, we’re consistently looking for ways to better serve our
clients and return value to our stockholders. It’s a business objective we’ve been
committed to for the long haul and one I believe matches the strides of our
clients — constantly evolving and growing to better our operation.
While you’re looking for ways to possibly improve yields and decrease input
costs, we’re evaluating how we can continue to evolve to offer you the very best
products, services and return for your investment in AgStar.
“It’s a business
objective which
I believe matches the
strides of our clients
— constantly
evolving and growing
to better our
operation.”
I’m excited to share our Board has identified an opportunity that we believe
has the potential to help you and us continue to grow into the future. We’re
working through the due diligence process with two other Farm Credit
Associations — Badgerland Financial and 1st Farm Credit Services — to
determine if merging our three Farm Credit associations would be beneficial.
This process is expected to take the next few months to complete. We’ll be
collecting a wide variety of information that will help us — and the other two
associations — decide whether to recommend a merger to our stockholders.
We’re evaluating the associations’ financial information, comparing product and
service delivery, and looking at patronage programs. At this point, there are many
more questions than answers, but this process will help us determine if a merger
is the right next step.
Once due diligence is complete, our Board will decide whether to move
forward. If a merger is deemed appropriate, our stockholders will have the
opportunity to vote on the proposal.
by Rodney Hebrink
It should come as no surprise that much of our discussions with Badgerland
President and CEO,
AgStar Financial Services, ACA
and 1st Farm Credit Services revolve around fulfilling our mission of serving
agriculture and rural America, with our commitment to clients and team
remaining as important to AgStar as it’s always been. You are an important
partner in this process and we will keep you updated along the way. Our team
remains committed to making sure you and your operation have what you need
to be successful, not only today but in the years ahead.
n
Spring 2016
15
1921 Premier Drive
P.O. Box 4249
Mankato, MN 56002-4249
CONTACT US
866-577-1831
AgStar.com
AgStar Financial Services is an equal
opportunity employer and provider.
© 2016 AgStar and AgStar Financial
Services are registered trademarks of
AgStar Financial Services, ACA.
All rights reserved.
We found the future of rural America.
During the Farm Credit 100 Fresh Perspectives search, 100 leaders
who are changing the future of rural communities and agriculture
for the better, were discovered.
Congratulations to AgStar’s Fresh Perspectives Top 100 Honorees
Pakou Hang
Erin Brenneman
Saint Paul, MN
Washington, IA
Mentoring and
Volunteerism
Co-Founder and Executive Director
for the Hmong American Farmers
Association (HAFA). Uplifts the
economic development of Hmong
farming families.
Agriculture Education and
Community Impact
Part owner in TJAC Pork and works
at Brenneman pork as a farrowing
manager. Hosts group farm visits to
explain modern practices.
FRESH PERSPECTIVES