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May 26
Meet the 2015 Interns

​GreenStone has welcomed six new interns for the 2015 summer program! This summer’s intern class is comprised of a variety of backgrounds and interests in the agricultural industry. Let's meet the new interns!

 

 

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Abby Carpenter
Credit/Crop Insurance Intern
Branch: Adrian
Hometown: Adrian, MI
College: Michigan State University
Major: Agri-business Management
Minor: Crop and Soil Sciences
Ag Background: 1200 acre family farm, operate a fall agri-tourism business with pumpkins, a corn maze and hayrides.
Internship Goal: I hope to learn about the credit process and all the behind the scene actions that take place here at GreenStone.

 

 


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Henry Smits
Credit Intern
Branch: Grand Rapids
Hometown: Hamilton, MI
College: Grand Valley State University
Major: Accounting
Ag Background: Experience working on a dairy farm, custom farming crew, equipment dealership and family hobby farm.
Internship Goal: I hope to develop experience and exposure to farm credit, as well as, learn about how the credit system works and developed.

 

 

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Isaac Anguiano
Corporate Credit Intern
Branch: East Lansing
Hometown: Area of Chicago, IL
College: Michigan State University
Major: Finance
Ag Background: C.A.M.P. Scholar with Migrant Student Services at Michigan State University, worked alongside as a supervisor/driver with family owned company named EuroBrick Inc
Internship Goal: I hope to learn the practices of corporate credit and lending amounts, such as qualifying and approval of loans.

 

 
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Jennifer Spink
Marketing Intern
Branch: East Lansing
Hometown: Pleasant Lake, MI
College: Northwood University
Major: Marketing
Minor: Economics
Ag Background: 200 acre irrigated row crop farm, train/show AQHA Horses, owner of GoShowMidwest.com
Internship Goal: I hope to gain corporate marketing experience while combining my love for marketing with my love for agriculture.

 

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Matthew Platte
Corporate Credit Intern
Branch: East Lasing
Hometown: Westphalia, MI
College: Michigan State University
Major: Agri-Business Management
Ag Background: Family Dairy Farm

Internship Goal: I hope to gain a better understanding of Ag finance and working in a corporate setting.

 

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Rebecca Hacker
Corporate Credit Intern
Branch: East Lansing
Hometown: Cass City, MI
College: Central Michigan University
Major: Real Estate: Development and Finance
Ag Background: Family Dairy Farm
Internship Goal: I hope to become more knowledgeable about and gain experience within the farm credit industry, become more familiar with loan and appraisal processes, and learn, learn, learn!


April 28
What Impacts Interest Rates and How Are Rates Determined?
As printed in the latest edition of Michigan Farm News.

By Travis Jones

Interest rates are typically market driven and in most cases, they are tied to the United States Treasury Bills and Notes. I say “typically” because the Federal Open Market Committee (FOMC) of the Federal Reserve also has a significant impact on interest rates.

The FOMC determines short-term rates by setting the Federal Funds (Fed Funds) rate. Today, the Fed Funds target rate is 0 to 0.25 percent; historically these are very low rates. The low Fed Funds rate is one of the main reasons the interest we earn on our checking and savings accounts today is minimal. The Fed Funds rate also helps set the Wall Street Journal Prime Rate. The largest banks in the country most often set the Prime Rate at 3 percent above the Fed Funds rate. Therefore, today it is at 3.25 percent. The Fed Funds rate and the Prime Rate have been at these levels since December 2008, when our economy was at the beginning of the recession. The FOMC will keep short-term rates lower in a below average economy in order to try to increase investment and help the economy recover. If the economy is improving and the FOMC thinks there is a risk of inflation, they will typically raise short-term rates.

When we see news reports ask the question, “Will the Fed raise rates soon?” they are discussing whether the FOMC will raise the Fed Funds target rate. Historically, the FOMC could not control longer-term rates like the 10-year U.S. Treasury Note rate. The market, based on the demand for U.S. Treasury Notes, normally establishes long-term rates. The market would weigh such factors as the health of the economy, risk of inflation, and value of the U.S. dollar compared to other currencies. Those elements still impact longer-term rates today. However, during the recession and up until 2014, the Federal Reserve actually bought a total of approximately $4 trillion in long-term bonds in order to help keep long-term rates, like home mortgage rates, low.  The Federal Reserve still holds these bonds today. If they were to start selling the bonds, long-term rates would likely increase quickly. Since the FOMC does not want long-term rates to increase too rapidly, they are not in a hurry to sell them.

Due to the improving labor market, economists are anticipating the FOMC to start slowly increasing the Fed Funds target rate sometime between June and December of this year. However, a number of other economic reports seem to show the FOMC should wait to raise rates. Manufacturing output and homebuilder confidence have both recently fell for the third straight month. The strong U.S. dollar is already hurting exports of goods. Central banks around the world have cut interest rates this year and the European Central Bank started its own bond-buying program, all to help their struggling economies. If the U.S. decides to raise rates when others are cutting theirs, our dollar could get even stronger, which would negatively impact our global trade even further. The possibility that the FOMC will slightly raise short-term rates this year exists, but there is the chance that long-term rates could stay low due to the fact that the strong dollar might attract investors to long-term bonds.

After reading this, if it sounds as though no one is really sure what is going to happen with rates, that is an accurate assessment. It is this type of market confusion over the last few years that helped cause this headline on Bloomberg.com on March 16, 2015, “How Interest Rates Keep Making People on Wall Street Look Like Fools.”

Travis Jones is the Executive Vice President  – Chief Financial Officer for GreenStone.


April 14
Ag Day at the Capitol

By Becky Whaley​

On March 25 agricultural leaders from across the state of Michigan came to Lansing to celebrate the 11th anniversary of Ag Day at the Capitol. The event is designed to raise the industry’s profile with state lawmakers and is looked forward to each year by all. Gov. Rick Snyder also declared March as Michigan Food and Agriculture Month in honor of the agricultural industry’s continued growth and success, having topped $101 billion in annual economic impact. 

For GreenStone, the morning began with a Michigan Ag Day Breakfast featuring flying pancakes by Chris Cakes of Michigan. Legislators, MI GreenStone PAC contributors, and industry leaders were invited to begin the day’s festivities by catching a pancake and enjoying other Michigan food products. 

Following the breakfast, several GreenStone directors and employees helped deliver baskets to state senators and representatives. The basket contained Michigan–produced food products, informational materials, and an invite to the main Ag Day event taking place inside the state capitol at lunch time. Over 30 agricultural organizations set up informative displays and supplied bountiful snacks.

Ag Day at the Capitol is an event to demonstrate the diversity and unity of the agricultural industry in Michigan. It also provides opportunities for legislators to interact with the Michiganders that feed and fuel our great state, country, and world, and to understand the issues farmers face in doing so. 

Becky Whaley is the GreenStone Legal & Legislative Specialist.

 

GreenStone Board Members Ron Lucas and Hank Choate at the Ag Day at the Capitol event.

 GreenStone Board Members Ron Lucas and Hank Choate at the 2015 Ag Day at the Capitol event.

 

 

 

April 03
​Dollars and Sense: Construction and Financing Options

As printed in the latest edition of Michigan Farm News.​

By Melissa Humphrey

As I sit here looking at my thermostat that shows a frigid temperature, I cannot help but try to find things that make me think of warmer days.  As with the season, my mind wanders to those of you thinking about a new home construction project, major renovation or new home purchase. 

Before beginning your next construction project, it is important to find a lending partner that has a vast array of options to fit your needs.  These can range from variable to fixed rates, as well as both contracted and do-it-yourself construction loans. Look for a financial institution that is able to take care of all the loan details and construction draw processes and procedures so your time can be spent selecting the perfect cabinetry, flooring and paint colors. 

Another option to consider is a fixed rate loan. In today’s market, the interest rate continues to rise, by locking in your loan at today’s low rates, you can eliminate the risk of worrying about what interest rates could be in six or nine months when construction is complete.  This also offers you the convenience of a one-time closing, which will help reduce costs in the long run.

Another added feature that is available with select lenders is the ability to go up to a higher loan to value ratio, like 95 percent, on fully contracted new home construction and home purchases. This option could help you start your project sooner than originally planned and will allow some extra cash on hand for the upgrades you may select along the way. This product has a slightly higher rate than a typical loan that would require a minimum of 20 percent down, but allows wider options depending on your needs.

If you are looking to acquire land now and plan to build in the future, lenders will also finance home sites. Purchasing the land first allows you to gain some equity in your land that could be used when you are ready for construction. This type of option should not require a deadline of when you must build, and the interest rates can be fixed.

Whether you plan to build or buy, finding your partner in success is crucial to any financing project. Consider contacting a GreenStone financial services officer in your area to discuss the vast array of options that can help make your next dream home a reality.

Melissa Humphrey is a regional vice president of sales and customer relations for GreenStone Farm Credit Services.

 

March 23
Spreading the Agriculture Message to Schoolchildren

​By Amanda Kutchey

March 18 not only was Patronage Day here at Greenstone, but it was also National Ag Day. While the loan officers and customer service representatives tended to happy customers in our branch, I took the message of agriculture to the community.   

As President of Macomb County Farm Bureau, we wanted to expand awareness of National Ag Day because as Macomb County has become more urban, fewer people actively engage with someone who farms.  One of our ideas for this year was to reach out to schools within our community and read a book about agriculture that was “AG-curate” about today’s industry. We had seven volunteers read to 20 children in kindergarten through second grade classrooms in three different school districts.

Myself and two other volunteers got to visit R.E.A.C.H. academy in Roseville, which is at the very southern end of our county and where many children think the food they eat grows at a grocery, and most have never stepped foot onto a farm. We read the book “Who Grew My Soup.” It is a great book that teaches kids about where the vegetables in vegetable soup come from. When the story was over, it was time for them to ask us questions. We learned about the movies they saw the past weekend,  video games they love, and that they LOVE carrots, including how their grandmothers cooks carrots. They all were very excited to talk to us and even had some great questions about how things are grown, how big tractors are, and hold old farmers are. 

I am very thankful that GreenStone allows us the opportunity to be a part of the community to help spread the word of agriculture to those who are not fortunate enough to live within it every day as many of us are. The joy and excitement of the kids in every classroom that day was something more people should get to experience!

Amanda Kutchey is a crop insurance specialist for GreenStone.


February 05
Dollars and Sense: Applying for Loan – What to Expect from Your Lender

As printed in the latest edition of Michigan Farm News.​

By Tom Frisk

Applying for a loan is the first step in the relationship between the applicant and the lender.  

The complexity of the loan request and type of operation will determine the amount of information needed, and the questions that will be asked by a lender. In the side-by-side relationship, it is important to provide accurate and up-to-date financial information, including a balance sheet, income statement, and projected cash flow statement. Transparency and documentation of assets and liabilities is critical to help avoid surprises such as incorrectly valued assets or forgotten liabilities. Although the loan amount will dictate how much detail the potential borrower will be expected to provide, here are some questions you can expect from the lender.

Application

 

  • What are you requesting and for what purpose? What amount and terms?
  • What assets are you going to pledge to secure the loan?
  • What off-farm income is received? From what source?
  • Is the loan going to be in individual names or an entity?
  • Do you have a Trust?
  • Provide verification of accounts, employment, major assets and debts.
  • Any major changes in the next 12 months? If so, what are they?
  • What is your credit history?

 

Financial Statement/Balance Sheet

This could consist of individual and entity balance sheets

 

  • Provide verification of assets (statements to prove cash, investments, 401K).
  • What are the terms on the loans that are listed?
  • What inventory do you have? 
  • Do you have any investment in growing crop?
  • Provide livestock specifics.
  • Are there any prepaid expenses such as land rent or fuel?
  • What supplies do you have on hand?
  • Are there any capital leases?
  • What are the account payables and taxes owed?
  • Do you have a succession plan?

 

It is necessary to provide balance sheets with reasonable values, including debt obligations and schedules. This information helps the lender ensure that debt structure meets the special needs of the individual growers.  

Capacity

Income statements – Profit and loss – Income tax returns

 

  • Provide details of your operation 
  • Do you contract your production? If so, what percentage and at what price?
  • How many acres do you own verses how many acres do you rent?
  • How long are your rental contracts and how much do you pay per acre rent?
  • What was your production last year?
  • What do you project in terms of production this year? Including price, yield, number of acres, crop, etc. 
  • Do you have production insurance for crop (multi-peril, revenue assurance) or milk (LGM)?
  • Do you plan for any changes compared to last year?
  • Do you pay yourself through payroll or distributions (only entities)?
  • What is your family’s living expense?

 

The information that lenders request helps determine the customer needs and understand their goals; these may be business, personal as well as family. The most productive producer-lender relationships are made when the producer has considered their short and long-term strategies. The information requested assists the lender to understand the business, the customer’s goals, and structure the operation for a long-term, successful relationship.

Tom Frisk is a senior financial services officer.


January 05
Farmland Rental Trends and Challenges

As printed in the latest edition of Michigan Farm News.​

By Jim Garvey​

Over the last four to five years, much has been written about farmland values. Many reports have documented the rapid increase in land values fueled by record farm incomes, more recently the focus has changed to speculation on how big a correction in land values to expect.  

Farmland rental rates are closely, but not perfectly, correlated with land values.  In general, rental rate trends lag land value or farm income trends. Consequently, many farm operators are now faced with rental rates negotiated at a time when farm income prospects were much better than we are facing now, with sub $4.00 corn and sub $10.00 soybeans. It is pretty tough to pencil out a profit at these prices when paying land rent of $150 - $250 per acre.  So, what are the options?

Renegotiating land rents is difficult; few landlords are going to welcome the opportunity to cut their income. Hopefully you have cultivated a good relationship over the years with these individuals and can leverage the economic realities of lower farm income into a lower rental rate.  

A hybrid lease, also known as a flex lease, may be an available option. This type calls for a base cash rent, with the opportunity for additional payments to the landowner if certain price levels or yield results are attained. This kind of lease can provide the landowner with a means of capturing additional rent when market conditions improve, without locking the farm operator into a non-economic rent if market conditions do not improve. 

Renting on shares could be another possibility. Many years ago, before cash rents became popular, share leases were the norm. With this option, the landlord receives a percentage of the crop as rental payment, and is then responsible for marketing the crop. This exposes the landowner to both production and pricing risks, but also creates the opportunity to reap the benefit of high yields and/or high prices. The advantage to the farm operator is that it reduces the amount of working capital needed to pay cash rent. However, it does present a challenge. Production from a farm rented on a share basis must be segregated and accounted for separately from other rented or owned land.

Landlords need to recognize there is collection risk involved in renting their farmland. Years ago I did an appraisal for a customer that had several homes he rented to others. I made the comment to him that the rent price he was charging seemed low. His reply was, “I’d rather deposit $400 every month than continually chase $600.” As a landowner, keep in mind accepting a lower rent than you have received in the past may be a better alternative than attempting to collect one that is not economically sustainable.

Jim Garvey is a VP - Chief Appriaser for GreenStone Farm Credit Services. 


December 11
GreenStone Corporate Giving for the Holidays

By Teresa Vicary​

The halls have been decked and holiday treats are abounding at the GreenStone Corporate office in East Lansing. But more importantly, the true spirit of Christmas and our Core Values resonates through our office. Each year the corporate office selects several special charities to support. Over the last number of years, we have provided gifts of service, money, or tangibles to Big Brother Big Sister, Haven House, Ele’s Place, Volunteers of America, the Capitol Area Humane Society, local schools, military families, and more! This year our office has generously donated to Toys for Tots and Small Talk Children’s Assessment Center. 

Toys for Tots is sponsored by the local Salvation Army and will deliver our donated toys to children around the Lansing area. We find that donating to Toys for Tots provides two gifts; one for the child and the second for the parent whom can receive the gift of giving. Small Talk Children’s Assessment Center provides local child victims and child witnesses of assaultive crimes with a safe, child centered location to meet with professionals to discuss events and be interviewed in a way that is supportive, non-traumatizing, and appropriate for children under the age of 18. It is truly an under advertised organization that manages this worthy cause. GreenStone employees personally donated over $1,000 to their mission and goal of purchasing a new counseling center. 

GreenStone we would like to thank all of our employees for helping our community celebrate the true meaning of the holidays and honor them for their generous support.

Teresa Vicary is a Human Resources Generalist at GreenStone Farm Credit Services.


 


November 21
'A Great Experience' on Michigan Out-of-Doors

​By Mark Klett

I recently had the opportunity to participate in a TV shoot for the Michigan Out-of-Doors (MOOD-TV) Television show.  The segment highlights a new hunting regulation for Zone 3 (the lower half of the Lower Peninsula) that allows the use of pistol cartridges in a rifle. This new regulation goes back roughly four years, and passed with the help of the Michigan United Conservation Clubs and Natural Resources Commission. The new law is similar to the regulations that have been enacted in Indiana for about nine years now. The MOOD-TV story highlights a couple of the common cartridges that are now allowed.

We did part of the story at my home farm land, and then also did some “in the field” testing by taking a doe on a local farmer’s crop damage permit. 

I’ve been lucky enough to do this a few times with the show and there is always “the curse of the camera” to be reckoned with.  Shooting a doe is pretty straight forward where they are doing damage, but making a perfect shot while being filmed does add to the challenge. I refer to the curse as it seems like when the camera isn’t there, there’s deer galore to pick from. But add the camera to the mix, and it just seems to mess up the whole day for the hunter.

The show’s producer, Gabe Vanwormer, hails from the Perry area. He’s a great guy to spend the time with and an outstanding outdoorsman. So all in all, being highlighted in a story is more nerve racking than one might think, but it’s still a great experience.

The crew from MOOD-TV is always looking for new stories, so don’t hesitate to contact them. They’re easy to find on Facebook or the internet. Ya never know who will be on next!

You can watch the episode on YouTube at http://youtu.be/xa8ctbNQ8G4​.

Mark Klett is a Crop Insurance Specialist for the Corunna and Saginaw branches.


November 10
Robotics in agriculture: A disruptive technology?

As printed in the latest edition of Michigan Farm News.

By ​Steve Junglas

The use of robotics is becoming more common in the agricultural industry, but there is a new wave of machines emerging that will change the way producers work. With this change would come a potential disruption in the traditional order of operations. 

According to Harvard Business School professor Clayton M. Christensen, a disruptive technology is defined as one that displaces an established technology and shakes up the industry; or a ground-breaking product that creates a completely new industry. In order to stay relevant and profitable, agriculture may need to be prepared to change the way it works. More staff time will be spent using an electronic dashboard than directly with the livestock or in the field. Employees will be spending a larger portion of their day analyzing data to determine the health of the livestock or quality of the crop.

Traditional agricultural robotics such as automated milking machines, feeders, cleaners and harvesters, offer improved automation and collect greater amounts of data than previous methods. The big difference now is that all this data can be joined with other outside systems, which can be used for correlation analysis to help predict problems early. Robotics will also be a major factor in addressing labor issues. I have heard from a number of successful farm operations that they think of their robotics as prepaying for labor.

Unmanned Aerial Vehicles (UAVs), or more commonly known as drones, will continue to be more powerful and easier to operate. The use of drones for crop reconnaissance can dramatically increase yields while reducing the time to physically walk the fields. Three of the most common sensors included on drones are imagery, spectral and thermal. Visible imagery captures high-resolution photos that can be examined to assess plant health and measurements. Plant stress detection can be seen using spectral imaging; a healthy leaf will appear differently than a stressed or dead leaf. When spectral and visible sensors are used together, they provide precise weed coverage data. Thermal imaging sensors are used to measure relative moisture status. Drones are already an important tool in crop scouting, measuring plant health, weed identification and irrigation.

Since new regulation on drones is coming soon, care must be taken not to violate any laws. All states have trespass and anti-stalking laws, along with unlawful surveillance, which apply to the use of any technology. A good piece of advice before going out and purchasing a drone is for farmers to start by contracting with a consultant.


Steve Junglas is the executive vice president, chief information and security officer at GreenStone Farm Credit Services.

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