2014 FCW Fall Spotlight

spotlight Fall 2014

MEET OUR SCHOLARSHIP RECIPIENTSPAGE 4

FARM CREDIT HISTORYPage 7

ELECTION RESULTSPage 5

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TABLE OF CONTENTS

President’s Message ..................................... 3

2014 Scholarship Recipients ............................. 4

Board of Directors and Nominating Committee Election Results ....................... 5

Financial Highlights ...................................... 6

Farm Credit History ...................................... 7

Community Center ................................... 8 – 9

• Honorary FFA Chapter Degree

• Kern Nut Festival

• Farm Credit West’s 25th Anniversary FFA Project Competition

• Let’s BBQ! FFA State Judging Finals

• 4th Annual Pinot & Pints Fundraiser

• California State Holstein Show

• Tulare County Farm Bureau President

A Lender’s Dream ........................................10

Territory and Office Locations ...................... 11

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WHO WE ARE

One of California’s leading agricultural lenders, Farm Credit West is a cooperatively-owned lending institution providing financial services to farmers, ranchers, wineries and agribusinesses with offices located in the California Central Coast, Southern San Joaquin Valley and Sacramento Valley.

SPOTLIGHT is produced for the customers, employees and friends of Farm Credit West. Comments and story ideas can be submitted to the Marketing Department, Farm Credit West, 1478 Stone Point Drive, Suite 450, Roseville, CA 95661.

BOARD OF DIRECTORS

Blake Harlan, Chairman of the Board .........................Woodland, CA

Joey Airoso, Vice Chairman of the Board ...........................Pixley, CA

Robert Amarel, Jr. ........................................................Yuba City, CA

Alben F. Barkley ..............................................................Oxnard, CA

Gregory O. (Butch) Dias, Jr. .............................................Visalia, CA

Richard J. Enns ..........................................................Bakersfield, CA

Douglas C. Filipponi ......................................................Creston, CA

Adam B. Firestone .........................................................Buellton, CA

Craig C. Gnos ....................................................................Davis, CA

Robert N. Hansen ......................................................... Hanford, CA

Thomas R. Heenan ......................................................Yuba City, CA

Barry Powell .............................................................Sacramento, CA

Edgar Terry .....................................................................Ventura, CA

Sureena B. Thiara ........................................................Yuba City, CA

Cornelius (Case) Van Wingerden .................................Carpinteria, CA

Farm Credit West will ensure THE CUSTOMER

COMES FIRST by providing superior service

at competitive rates, in a timely, professional

and ethical manner.

Mission Statement

PAGE 2

Fall 2014

Trust is the cornerstone of business, of relationships and of life. Trust is a core element of a respected person and a successful company. At Farm Credit West we strive to earn your trust by listening to your needs, delivering high quality products, being good stewards

of the equity that we manage, and providing exceptional customer service.

Listening is a key element of trust and the first step we employ at Farm Credit West to earn your trust. If we do not listen to you, our customers, we cannot begin to understand your needs and provide you with high quality products. As our customers, you can trust that your voice is important, that we value your feedback, and that Farm Credit West is committed to responding to your needs. In an effort to ensure that the trust we have earned is maintained, we seek feedback from you through the customer survey. The questions in the survey are designed to allow us to understand and address your needs and to ensure that the products and services we offer meet them.

Secondly, we strive to earn your trust by delivering high quality products that will help you be successful. At Farm Credit West we do not just strive to deliver a product, we strive to deliver the highest quality product possible. We work tirelessly to ensure that this is not just a slogan. Farm Credit West is committed to delivering high quality products by providing:

• Superior products at competitive rates

• Knowledgeable and engaged staff that strive to understand your unique business, f inancial situation, and f luctuations in your marketplace

• Timely and professional service to meet your f inancial needs

Trusted• A valued resource to help you grow and transition your business to the next generation

Thirdly, Farm Credit West earns your trust by being a good steward of the equity that we are charged with managing. As a cooperative lender, it is vital that we make responsible decisions regarding your equity. To ensure that Farm Credit West remains profitable, we must preserve capital, continue growing our business, and provide competitive rates and patronage payments to you, our customer-owners. We know that in order to be trusted with your equity we must continue to add value to your relationship as a stockholder. In 2013 we returned $53 million in patronage to you, our customer-owners, roughly equivalent to 0.75% of your average loan balances.

Finally, at Farm Credit West, our mission is “THE CUSTOMER COMES FIRST.” Fulfilling our mission requires that we continue to meet your expectation of exceptional customer service. We are an organization that strives to enhance the overall customer experience. We work every day to be a trusted partner and resource in your business. Your kind words of support through our surveys validate that you trust us and that we are meeting our value proposition of “Superior Service at Competitive Rates.” In fact, when we ask, “How would you rate the overall service you recently received at Farm Credit West?” 94% of you, our customers, rated us as “excellent” in overall service with another 4% rating our performance as “very good.” Additionally, 98% of you stated that you would recommend Farm Credit West to others. Please know that we will continue to strive for 100% satisfaction.

In closing, earning and keeping your trust is essential to the ongoing success of Farm Credit West. We are committed to improving every day to help you reach your goals. We will continue to provide you with the opportunities, resources and tools you need to be successful. We know that as long as we continue to put our valued customers first, you will continue to place your trust in us.

PRESIDENT’S MESSAGE Mark Littlefield, CEO

PAGE 3

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Applications for the 2015– 2016 school year are due February 15th, 2015. Candidates will be notified in April if they have received an award (all awards are contingent upon final transcripts). For more information about the Farm Credit West scholarship program please visit www.farmcreditwest.com or talk to your loan officer. Scholarship information can be found under Community Support on our website.

Scholarship Program Update

PAGE 4

Congratulations to our 2014 Scholarship Recipients

Jason Couto Jr. Riverdale, CAWest Hills College, LemooreMajor: Ag Business

Garrison Fernandes Tipton, CACal Poly, SLOMajor: Ag Engineering

Foster Hengst Woodlake, CACollege of SequoiasMajor: Plant Science

Hattie Jameson Visalia, CACal Poly, SLOMajor: Ag Science

Meet Our Scholars:

Emma Larson Hanford, CACal Poly, SLOMajor: Ag Communications

Tristan Rollin Riverdale, CAPurdue UniversityMajor: Ag Engineering

Kavin Sihota Selma, CAFresno State UniversityMajor: Viticulture Enology

Elizabeth Talley Arroyo Grande, CACal Poly, SLOMajor: Ag Communications

Farm Credit West congratulates our eight scholarship winners, all aspiring to make a difference in their agricultural communities. Each student earned $1,500 toward higher education.

Each school year Farm Credit West awards scholarships to qualified applicants. This past year the Board approved a $500 increase in the scholarship amount, giving $1,500 to each recipient. Over the last twenty years Farm Credit West has awarded over $615,000 in scholarships.

Previous scholarship recipients that continue to maintain academic excellence are eligible to renew their scholarship for up to three years after their initial award. This year’s students renewing their scholarships will also receive an increase to their scholarship amount, receiving $1,500 each.

Students renewing their scholarship include:

Bridget Adam, Santa Maria, CA

Justin Adam, Santa Maria, CA

Maggie Boneso, San Miguel, CA

Aaron Brown, Hanford, CA

Gavin Chohan, Yuba City, CA

Ethan Driver, Knights Landing, CA

Kristen Droogh, Lemoore, CA

Austin Fernandes, Tulare, CA

Lauren Friend, Tulare, CA

Alyssa Galhano, Visalia, CA

Matthew Geis, Bakersfield, CA

Mitchell Harry, Elk Grove, CA

Mazie Jameson, Visalia, CA

Audra Jones, Orland, CA

Thomas Larson, Hanford, CA

Cole Martin, Tulare, CA

Elizabeth Parsons, Bakersfield, CA

Rumyn Purewal, Yuba City, CA

Garrett Rasmussen, Dixon, CA

Rajvir Sohal, Yuba City, CA

Theresa Sweeney, Visalia, CA

Kaitlin Swickard, Susanville, CA

Navreen Thandi, Clovis, CA

Erin VanGrouw, Visalia, CA

Hannah Wilson, Clarksburg, CA

Madeline Wisecarver, Hanford, CA

Fall 2014

2014 HOLIDAY SCHEDULE

Columbus Day, Monday, October 13

Veterans Day, Tuesday, November 11

Thanksgiving Day, Thursday, November 27

Christmas Day, Thursday, December 25

Gregory O. “Butch” Dias, Jr.: Butch Dias co-manages a dairy and farming operation with his two sons. He is a past chairman of the California Milk Advisory Board and has served on that board for the past five years. Butch is looking forward to focusing on the diversity of agriculture and its ability to weather the Ag cycles over time.

Members elected to the 2015 Nominating Committee: Robert L. “Roy” Gill, Jon Cagliero, Lynette Filter, Danny Newton, Craig Reade, and Michael Dias.

Members elected as alternates for 2015 Nominating Committee: Kulwant Johl, Les Graulich, Wayne Allen, Jared Fernandes, Janis Berk, and Julien Parsons.

Those who participated in the election process play an important role in Farm Credit West’s success. We would like to convey our most sincere appreciation to those who agreed to serve as Board of Director candidates, Nominating Committee members, Nominating Committee candidates and to all those stockholders who cast their ballots.

PAGE 5

Board of Directors and Nominating Committee Election Results

Directors Elected to an Additional Term: Congratulations to Edgar Terry, Craig Gnos, and Gregory O. “Butch” Dias, Jr. who were recently re-elected to serve on the Farm Credit West Board of Directors.

The Farm Credit West Board of Directors is made up of 13 stockholder-elected directors and two appointed directors. Farm Credit West Board members are the governing voice of the Association, acting to represent the best interests of the Association’s shareholders. Farm Credit West Board members regularly participate in director development programs and trainings in addition to attending scheduled board and committee meetings throughout the year.

Much of Farm Credit West’s success is attributable to the contributions of the many customers who have served as

directors over the years and we extend our utmost appreciation to each of them for their leadership, insight, and many years of dedicated service.

Edgar Terry: Edgar Terry is a manager of a fourth generation family farm in Ventura, California, where he farms approximately 2,000 acres of strawberries and vegetables with his family. Terry is looking forward to representing the interests of growers and producers during his term on the board.

Craig Gnos: Craig Gnos is a full time farmer who has been working with his father for the last 23 years. He is a partner in E&H Farms and an owner of Batavia Farms, growing vegetables and row crops. Craig is looking forward to giving back to the Farm Credit System as it is a vital service to the agricultural community.

Edgar Terry

Craig Gnos

Gregory O. “Butch” Dias, Jr.

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PAGE 6

Farm Credit West reported net income of $83 million for the first half of 2014. These year-to-date earnings were ahead of our business plan targets. Also during the first six months of 2014, our average earning assets and capital levels increased while our allowance for loan losses remained consistent.

Financial Highlights

Average Earning Assets (in millions)

Nonearning Assets (in millions)

Members’ Equity as a % of Total Assets

Allowance for Loan Losses as a % of Loan

Average earning assets grew $254 million, or 4%, during the first six months of the year. The increase was due primarily to higher year-to-date average real estate loan volume.

Nonearning assets (nonaccrual loan plus other property owned) increased by $20 million or 21% to $116 million at June 30, 2014. The increase was primarily due to a $20 million increase in nonaccrual loan volume. The other property owned balance remained essentially unchanged.

In the first half of the year, total members’ equity increased $109 million, or 8%, primarily due to the net income of $83 million and an increase in the preferred stock balance of $29 million. Partially offsetting net income during the year were preferred stock dividends of $3 million.

Our allowance for loan losses totaled $35 million (0.53% of loan principal and interest) at June 30, 2014, compared with 0.54% of loan principal and interest at December 31, 2013. The allowance is our best estimate of the amount of probable losses existing in our loan portfolio as of each balance sheet date. We determine the allowance based on a regular evaluation of the loan portfolio, which generally considers recent historic charge-off experience and is adjusted for other relevant economic factors.

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Financial Highlights Farm Credit West reported net income of $83 million for the first half of 2014. These year-to-date earnings were ahead of our business plan targets. Also during the first six months of 2014, our average earning assets and capital levels increased while our allowance for loan losses remained consistent.

_______________________________

Average Earning Assets

$5,726 $5,737

$5,991

$6,323

$6,577

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)


_______________________________

Nonearning Assets

$191 $187 $156

$96 $116

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)

Nonearning assets (nonaccrual loan plus other property owned) increased by $20 million or 21% to $116 million at June 30, 2014. The increase was primary due to a $20 million increase in nonaccrual loan volume. The other property owned balance remained essentially unchanged.


15.6%17.7% 18.1%

19.9% 21.2%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014


_______________________________ Allowance for Loan Losses as a % of Loans

0.44%0.52% 0.54% 0.54% 0.53%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014


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_______________________________


$5,726 $5,737

$5,991

$6,323

$6,577

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)


_______________________________

Nonearning Assets

$191 $187 $156

$96 $116

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)



15.6%17.7% 18.1%

19.9% 21.2%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014



0.44%0.52% 0.54% 0.54% 0.53%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014


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_______________________________


$5,726 $5,737

$5,991

$6,323

$6,577

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)


_______________________________

Nonearning Assets

$191 $187 $156

$96 $116

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)



15.6%17.7% 18.1%

19.9% 21.2%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014



0.44%0.52% 0.54% 0.54% 0.53%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014


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_______________________________


$5,726 $5,737

$5,991

$6,323

$6,577

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)


_______________________________

Nonearning Assets

$191 $187 $156

$96 $116

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014

(in millions)



15.6%17.7% 18.1%

19.9% 21.2%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014


_______________________________

Allowance for Loan Losses as a % of Loans

0.44%0.52% 0.54% 0.54% 0.53%

Dec. 31,2010

Dec. 31,2011

Dec. 31,2012

Dec. 31,2013

Jun. 30,2014


Fall 2014

The cooperative ideal – that private citizens working together democratically could do things that the free market could not – was a century in the making by the Progressive Era, a period of reform spanning from 1890 to 1920. Marked by an economy that brought great wealth and great poverty, many reaped economic rewards while others were excluded in the free market. Progressives called on the government to allow cooperatives to meet needs unfilled by the marketplace.

In 1887, L. L. Polk, founding editor of the Progressive Farmer, declared that “co-operation, organization, consolidation are the watch-words of the hour.” The prolific agriculture publisher and editor Herbert Myrick tirelessly promoted the cooperative ideal as a solution to credit problems among farmers.

Although the 1916 Federal Farm Loan Act itself did not specify that the Farm Credit System would be cooperatively rather than investor-owned, the System was implemented as a cooperative, and Myrick was later honored by receiving one of the two pens President Wilson used to sign the 1916 Act. But would the System created in an era of cooperative enthusiasm endure?

The first test came in 1920. In Smith v. Kansas City Title and Trust Co., early opponents of the Farm Credit System held that the Constitution did not allow Congress to approve the issuance of tax exempt bonds – for farm loans or for anything else. Litigation halted lending activities for nearly a year, but in February 1921, the Supreme Court, then generally accepting of the extension of federal power to the benefit of the citizenry, upheld the constitutionality of the Federal Farm Loan Act.

Another major test on the System immediately followed. The Great Depression could have destroyed Farm Credit, but instead, the government, System leaders, and borrower-owners strengthened it, reorganizing the System while maintaining its democratic, cooperative foundations and its GSE status.

Farm Credit History: Embodying the Cooperative Ideal

In 1913, President Woodrow Wilson pledged to help farmers obtain credit not available from commercial banks – banks that couldn’t support farmers and ranchers through the ups and downs of agriculture.

Detractors claimed that putting the government behind agricultural credit would give undue advantage to farmers. Wilson disagreed. “The farmers, of course, ask for and should be given no special privilege,” he said. “What they need and should obtain is legislation which will make their own abundant and substantial credit resources available as a foundation for joint, concerted local action.”

The Farm Credit System created three years later was the first organization to later bear the designation of a Government-Sponsored Enterprise (GSE), a term not then in use; the System as implemented was also the first federally-sanctioned cooperative credit association, instituting a groundbreaking approach to providing support for the nation’s farmers and ranchers when they needed it most.

by Jim Putnam

Continued on page 10

Top: Excerpt of the minutes of the first board meeting in 1917 for the East Side Paso Robles National Farm Loan Association.

Above: East Side Paso Robles National Farm Loan Association, Record book of board meeting minutes beginning in 1917.

PAGE 7

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PAGE 8

Community Center

Kern Nut Festival

The Second Annual Kern County Nut Festival took place Saturday, June 7th, at the Kern County Museum. Kern County is the top nut producing county in the nation, so a nut festival that celebrates nutrition and nut cuisine is bound to

be a success. This year the festival had approximately 7,500 attendees, up from about 5,500 the year before. The festival featured many events including cooking demonstrations, nutty concoctions, music, dancing, crafts, agricultural exhibits, games, health information and contests.

Farm Credit West and CoBank sponsored the event, helping benefit the Kern County Museum’s Educational Programs, as well as other non-profits.

Farm Credit West’s 25th Anniversary

FFA Project Competition

Farm Credit West has provided judging for the Northern Santa Barbara FFA Sectional Project Competition since 1990. Over those years Farm Credit West has donated almost $20,000 in banquet funds, certificates and awards. Farm Credit West volunteers over 150 hours annually and travels many

miles visiting the eight different FFA programs within the Section. Tom Gulliver, who has judged all 25 years, said, “We have seen some very interesting projects and most importantly watched the growth of some of the best youth these communities have produced.” Farm Credit West would like to thank all the judges that have provided not only their expertise and time, but the mentorship they have given to the FFA competitors over the years.

Farm Credit West was the presenting sponsor of the Fresno Grizzlies’ Farm Grown game night and post-game fireworks show in May. Twelve-year-old Hunter Seymore of Visalia is pictured here throwing the first pitch. Hunter described this experience saying, “It was the best night in my life.”

Farm Credit West Receives Honorary FFA Chapter Degree

In May, Pioneer High School in Woodland presented Farm Credit West with an Honorary FFA Chapter Degree. This award is given to individuals and companies who have truly made a difference in educating the community about agriculture, as well as providing continued support of FFA. Farm Credit West has been supporting Pioneer High School and their FFA program since the school was founded in 2002.

Local Farm Credit West employee Anna Fricke stated, “Farm Credit West has put a lot of time and effort into supporting FFA chapters by purchasing animals, staffing and underwriting the Yolo County Fair Livestock Auction. We support Pioneer FFA fundraisers by purchasing tickets and providing raffle prizes, but it’s the youths’ commitment to agriculture that really motivates us to support their success.”

Pictured with the Pioneer FFA Chapter Officers, Anna Fricke receives the Honorary FFA Chapter Degree on behalf of FCW.

FCW employees Cheryl Mendoza, Mary Martinez and Melinda Mello, volunteering in the California Women for Ag booth.

FCW Portfolio Manager Tom Gulliver listens to FFA participant talk about his project.

Fall 2014

PAGE 9

Community Center

College. This represents the fourth year of involvement for Farm Credit West. Table sponsors pour either wine or beer for tasting and participate in competitions for “Best Appetizer” and “Best Decorated Booth.” For the second year in a row, Farm Credit West won “Best Appetizer” with its Jalapeno Duck Poppers and served refreshing pints of Firestone Walker beers, owned by Farm Credit West Board Member Adam Firestone and co-owner David Walker. Farm Credit West employees who participated include Don O’Dell, Ken Tatami, Kevin Layne, and Mary Tatami.

California State Holstein Show

The 50th Annual CA State Holstein Show was held in Turlock, CA at the Turlock Fairgrounds on April 24th and 25th. The Farm Credit Alliance sponsored a $1,000 cash award to the CA State Futurity Show Winner. What is

the futurity? This prestigious event showcases the accomplishments of breeders across the state, selecting the best three year old cow from the females that were nominated by breeders when they were young calves. The winning entry of the 2014 Futurity was AIR-OSA JEEVES 14414. This cow is owned and bred by Joey Airoso, a member of the Farm Credit West Board.

Joey Airoso Elected as Tulare County Farm Bureau President

Joey Airoso was recently elected President of the Tulare County Farm Bureau Board.

Airoso is a Tulare County native, born and raised. His family has been dairying in the county for over 100 years. Along with his father Joe, son Joseph, and wife Laurie, Airoso manages two dairy farms near Pixley, milking over 2,000 cows.

“Working together and building a louder voice will be my mission for the next two years as president,” says Airoso. “We have many issues to deal with on behalf of all Tulare County farmers and water is at the top of the list right now.”

Let’s BBQ! FFA State Judging Finals

The BBQ started over 30 years ago when Farm Credit West, San Luis Obispo Farm Bureau, J.B. Dewar Petroleum, and Farm Supply sponsored the first BBQ. Jim Brabeck from Farm Supply and Jack Dewar from J.B. Dewar had noticed that the State Finals participants had to

go to downtown San Luis Obispo to get lunch. Since it was too far to walk, many did not eat. Jim and Jack approached Farm Credit West and the San Luis Obispo Farm Bureau to help them sponsor a lunch for the FFA participants. Farm Credit West has continued to contribute both financially and with man power over the years and is now the major sponsor of the event.

Many of those who volunteered from Farm Credit West have been involved in FFA since their youth. John Boyes from Farm Credit West said, “It is refreshing to see each new class of participants use the FFA experience to enhance their lives and the communities around them.” Many of the FFA instructors attended the BBQ as students and are now back providing leadership for their schools. FFA programs are hurting for money in California and any help is appreciated. In some cases students would not be able to participate in the event if it wasn’t for Farm Credit West and the BBQ that was started so many years ago.

4th Annual Pinot & Pints Fundraiser

On Saturday May 3rd the Dinuba Branch of Farm Credit West participated in the 4th Annual Pinot & Pints Fundraiser hosted by the Reedley College Ag Backers Council. Proceeds from the event go toward providing scholarships and work study employment opportunities for students studying Agriculture or Natural Resources at Reedley

Hayley Loehr, FCW Templeton Branch, and Wayne Elias, FCW Santa Maria Branch, trim tri-tip for the State FFA Finals BBQ.

Kevin Layne, FCW Dinuba Branch, showcases the award-winning Jalapeno Duck Poppers.

From left to right: Dominique Germann (District 6 Dairy Princess), Lauren Evangelo (FCW Employee), Joey Airoso, and Caitlin Lopes (District 61st Alternate Dairy Princess)

spotlight

A Lender’s Dream

At a recent weeklong ag lending school, an excellent producer panel discussed how they were planning to navigate the economic white waters that appear to be emerging. After listening to the panelists, the lenders debriefed by discuss-ing how the producer panelists manage

their businesses both in the short and the long run. I heard one of the lenders say that the panelists were a “lender’s dream!”

The lender’s dream began when one young panelist under 40 years of age indicated that he not only prepares his own balance sheets and accrual adjusted income statements, but also generates projected cash flow statements. He has developed a dashboard of approximately seven key financial ratios and benchmarks his family business uses to look at trends in their business metrics and compare their business to peer businesses on state and national farm record database summaries. He then stated that he monitors his cash flow quarterly by comparing the projected cash flow to the actual results, both on the revenue and the cost side. He stated that he was so glad that he had forward priced his crops for multiple years to not only lock in a profit, but also meet his debt service requirements. Another key in being a lender’s dream was that he meets quarterly with his advisory team, which includes a retired extension agent, crop and livestock consultants, as well as his lender.

Another panelist in the question-and-answer discussion indicated that he had a formal written transition plan. Yes, that includes an estate plan but also a formal transition pathway for bringing the younger generation and outside family business members into the business, and how the older generation would phase out. He and his spouse shared that it required a significant time investment of two years to complete the process, but it was a worthwhile allocation of time and money to ensure the success of the business and that the legacy was carried on. He had an interesting quote: “What is the cost of NOT doing something?”

All producer panelists were strong advocates of disciplined growth and ample liquidity thru working capital, with a focus on cash reserves. One young panelist took a pass on rented ground this past spring when the bidding war got out of hand. Knowing his cost of production and margin scenarios in the planning process circumvented a potential big loss as commodity prices have now headed south. He stated that he was able to secure a custom harvesting contract on the same ground from the farm that had rented it, and that his profit margin in this diversified custom harvesting business was still strong.

Additional attributes that impressed the lenders were the proactive decision making and the panelists’ passion for agriculture overall. All of the panelists embrace technology, but they only felt innovation, with or without technology, was a competitive edge in the balance between business and lifestyle.

The panelists were advocates of education and training. The proof was in the pudding when the panelists came early to the school to listen to the educators lecture on financial analysis trends impacting agriculture. Yes, they are lifelong learners.

How do you stack up to these panelists who were considered a lender’s dream? The bigger question is, what will you do to improve, execute, and follow through on management of your business?

Dr. David M. Kohl

Professor Emeritus, Virginia Tech

Perhaps the greatest challenge came during the agricultural crisis of the 1980s. But as a Farm Credit Administration official stated, “foreclosure should be a last resort for any commercial lender, but particularly for a cooperative lender that is owned by its borrower-owners.” Leaders and borrower-owners rallied to defend the System – and the government listened. President Ronald Reagan declared the 1980s legislation “ensures that the Farm Credit System will continue as a principal source of private credit to America’s farmers.”

As an embodiment of the cooperative ideal, Farm Credit has met the needs of American agriculture for nearly a century. That it has survived and grown stronger over the nearly 100 years it has served U.S. agriculture suggests that the System’s cooperative structure will enable it to continue to serve American farmers long into the future.

Farm Credit History continued from page 7

PAGE 10

Fall 2014

PAGE 11

Administrative Office

1478 Stone Point DriveSuite 450Roseville, CA 95661 916.780.1166

Capital Markets

1446 Spring StreetPaso Robles, CA 93446805.237.0998

Carpinteria

1135 Eugenia Place, Suite ACarpinteria, CA 93013805.684.8771

Dinuba

531 N. Alta AvenueDinuba, CA 93618 559.591.9378

Hanford

1111 W. Lacey BoulevardHanford, CA 93230 559.584.2681

Kern County

19628 Industry Parkway DriveBakersfield, CA 93308 661.399.7360

Santa Maria

1178 Tama Lane Santa Maria, CA 93455 805.922.7991

Templeton

175 Cow Meadow Place Paso Robles, CA 93446 805.434.3665

Tulare

200 E. Cartmill AvenueTulare, CA 93274 559.684.1478

Ventura

2031 Knoll DriveVentura, CA 93003 805.477.1020

Woodland

440 Pioneer AvenueWoodland, CA 95776 530.666.3333

Yuba City

900 Tharp RoadYuba City, CA 95993 530.671.1420

«

Territory and Office Locations

Yuba CityRosevilleFarm Credit West ACA Main OfficeWoodland

Dinuba

TulareHanford

TempletonCapital Markets

Santa Maria

Bakersfield

CarpinteriaVentura

Territory and Office Locations

1478 Stone Point Drive Suite 450 Roseville, CA 95661

800-909-5050 • www.farmcreditwest.com

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STEWARDSHIP LOAN PROGRAM

• Flexible terms• Low interest rates• No loan origination fees

Contact your local Farm Credit West branch for details.

Stewards of the Land.And the Water.

2014 FCW Fall Spotlight

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