By Henry Smits
Before I joined GreenStone as a credit intern in 2015, I had already accumulated a fair amount of exposure to the agricultural industry. My interest in farming drove me to observe, research, and work in the industry in order to gain knowledge about the industry. However, until I joined GreenStone, I had experienced very little exposure to the financial aspects of the industry. When I began my first internship at GreenStone I made it my biggest goal to learn as much as possible about the financial side of the agricultural industry. As a credit intern, I have been and continue to be exposed to the financial aspects of the industry, working with a variety of types and sizes of farm entities. Through the experience I have accumulated, I can affirm I have met my goal of gaining more insight into the financial details of the agricultural industry.
This summer I am focused primarily on continuing the progress of the benchmark project, which is focused on three market groups: dairy farms, greenhouses, and row crop farms. I am involved with gathering data, setting up spreadsheets, and creating charts and tables that show how the benchmark ratios and figures compare to previous years. The benchmark project will be valuable to GreenStone because it will aid analysts and others with comparing a specific client’s performance with the average performance of similar entities. In addition, I also took advantage of the opportunity to assist credit analysts in writing loan narratives, which has sparked an interest in possibly pursuing a career in agricultural finance in the future.
Because this is my second internship at GreenStone, I have had a wealth of exposure to the company. I have come to appreciate the relaxed work environment, the willingness of others to explain concepts and assist me with challenging tasks, the interest of others in my background and my goals, as well as receiving the opportunity to witness the involvement of GreenStone in the agricultural industry as an organization playing an integral role in the financial aspect of that industry, whether it being with helping beginning farmers turn dreams into reality or helping more established farmers capitalize on opportunities. What began as an interest in broadening my perspective of the agricultural industry, has led to the discovery of a career field that would allow me to utilize both my accounting degree as well as my lifelong interest in farming.
Henry Smits is a credit intern in Grand Rapids.
In some industries, new professionals might sit in a cubicle, draw a salary and let others figure out how to run a profitable business. In farming, however, new producers must figure out why they want to work long hours in fields, pastures or feedlots, how they can turn that effort into a steady income, and what type of farm operation they can successfully operate from one year to the next.
Not surprisingly, that type of grit and determination can make a big difference with agricultural lenders. While passion is clearly a major prerequisite for farm life, capital is also vital for young or beginning producers trying to get started in an expensive business. Due in large part to steep entry barriers, such as high prices to purchase or rent land, substantial input costs, and depressed returns on farm commodities, fewer than 8 percent of U.S. producers are under age 35. While many grew up on farms that became a launching pad for their own operations, it's still common for younger producers to hold down second jobs to help finance their dreams of rural life, as Successful Farming reported in September 2015. Facing those hurdles, experts say it's important that young producers–or even older individuals.
Develop a Business Plan
Business plans are a routine part of the financing process for virtually any business. However, 63 percent of current producers who participated in a recent Sustainable Agriculture Research and Education survey said they had no formal business plan when they started farming. That lapse may help explain why a majority of respondents also said they were "not very successful" at maintaining profitability, managing expenses, and insuring their operations.
In essence, the business plan outlines a strategic overview of what a beginning or young producer wants to accomplish, and why they are a good candidate for achieving those goals. If done well, the plan should include:
- Personal narrative. This should include a personal and educational history, an outline of farming experience and a discussion of why the producer wants to pursue a career on the land.
- Business overview. In this section, producers should start by identifying their target business model, such as a partnership, limited liability company or other entity for tax purposes. Then, outline short-term goals that cover the intended type of operation (such as crop, livestock or organic farming, or a community-supported agriculture enterprise serving a more urban area). These goals should provide specific targets on production, anticipated income and planned expenses. This overview becomes even stronger if the producer takes time to illustrate longer-term projections on how the farm business can grow while maintaining profitability.
- Risk management approach. This component should summarize the producer's approach to handling the uncertainties of farm life. For a production crop operation, this may include the choice of Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) under the 2014 Farm Bill, the use of any private multi-peril crop insurance, and a discussion of how the producer would use crop marketing tools to hedge profit risk in the current low commodity price environment. In addition, this risk management narrative should also address contingency planning, which is an important reality-check that all lenders want to see.
- Balance sheet. Experienced producers have years of income and cash-flow statements, equity statements, expense records and cost-of-production data. On the other hand, the financial records for most young or beginning farmers often boil down to a basic balance sheet. Lenders will want to see a list of current assets, such as checking, savings and any investment account balances, as well as the value of any real property or vehicles owned by the prospective borrower. On the liability side, the balance sheet should disclose any outstanding debt on a mortgage, vehicle, student loans or credit cards, and any regular monthly payments on those obligations. In addition, lenders typically want to review up to three years of the applicant's most recent tax returns. The balance sheet summary serves two main purposes. First, it provides lenders with a tangible sense of how well applicants handle their financial affairs (and, by extension, how likely they are to repay operating loans). And, the balance sheet will also determine whether the applicant meets minimum capital standards for lender financing. Across the Farm Credit System, lending to young or beginning producers typically includes a review of the borrower's net worth, ownership equity in the planned farm operation, and expected working capital to meet monthly obligations and pay off existing liabilities.
Building a solid case for operating loans or other financing can be a daunting challenge, particularly for younger producers who have little or no experience with the process. Fortunately, an array of online resources are available to help jump start the task. For example, the AgPlan tool developed by the University of Minnesota allows users to customize business plans by type of operation, and share drafts for feedback from select advisers or farm educators. The U.S. Department of Agriculture also provides a substantial library of farm business planning resources through its New Farmers website.
While the online resources add tactical value, young or beginning producers should also build early ties with a lender who can offer strategic, real-world advice on the development of a farm business plan. If you are a beginning producer, contact your local GreenStone branch to see how we can help your business grow.
One of the best places to start a career in information technology is the service desk. One really gets a feel of the company on all levels because everyone uses the service desk at some time. You are the information hub of the organization; you not only get a feel of the organization, but also what you know, and what you still need to learn. I suppose that’s why I love technology, there’s always something to learn.
A little background on myself: ever since I was small I was always playing on a computer, using software and figuring how it worked. I tried several game design camps as early as eighth grade. I went to the Capital Area Career Center as well as Williamston High School. By going to the career center, I was able to get a head start on my course work and started to learn programming languages and web development there. When I graduated high school, I had won 13th in the state for Java programming with Business Professionals of America. This gave me the confidence to continue pursuing one of my greatest passions, technology.
At Grand Valley State University, I continued on my path of learning several programming languages, but was able to pursue my business minors, giving me a board range of skills, from the basics of business, and a solid technology foundation. My position at GreenStone allowed me to apply all of my skills in finance, networking, hardware/software, management theory, and software development.
GreenStone has allowed me to explore avenues of technology beyond application development. Through this internship I have gained a better understanding of corporate culture as a whole and how technology relates to business. It has shown me that technology has a place in every industry, from medicine and manufacturing, to helping America bring food to the table. While I hope to come back to GreenStone after I graduate, I know that the experience I’ve gained through the service desk and working with the Project Management Office and Business Analysis Unit has helped me grow as a professional. Thanks to this internship I will continue on in my career, confident in applying the skills I had once learned out of a book to help serve the world.
Hannah Long is an information services intern in East Lansing.
By Cynthia Cole
As a financial services officer with GreenStone, I help customers finance their dreams of owning recreational property. Whether the land is to hunt, fish, hike or enjoy in another way, everyone has their own wants and needs when looking for vacant land. No matter the reason, there are three key questions buyers should ask themselves before embarking on the great hunt for the perfect plot of land.
1. What is Your Financial Situation?
Before starting to shop for the perfect piece of land, it is a good idea to assess your current financial situation. Deciding how much land you can afford is a crucial first step. Buying raw land can be very different than purchasing an existing home, but GreenStone is experienced in the process and will guide you through it.
In addition to the credit application, borrowers should expect to share information on your current assets and liabilities, including annual income, investments, mortgages and auto loans. This information will be used to determine a budget, the required down payment and interest rate. It is also important to realize that some lenders may require shorter amortization of land loans, such as 10 to 15 years. GreenStone offers more flexibility with terms up to 30 years and low down payments.
2. How Much Land Is Needed?
Once a budget has been determined, the next question is how much land is desired. That will depend on how you plan to use the land. For example, if you plan to deer hunt, you may want to make sure there is have enough room for food plots or a pond. Hunters should also consider how many people will be hunting on the land at any given time. Too many hunters in a small space is not only dangerous, it will also scare away the game.
3. What Are Your Long Term Plans?
Perhaps your immediate plan for the land includes camping, hiking or hunting… but what about five to 10 years down the road? If there is even a possibility you might someday want to build a home on the land, there are a few things you should consider before signing on the line:
Does the raw lot have adequate space to build? How much would it cost to clear and develop the land before building a home? Some sites may have issues, such as poor drainage, that could complicate construction down the road. Before buying, it is best to consult a qualified builder, and also check with local zoning boards to know if construction is an option.
Does the site have access to utility hook ups, such as water, sewer and electric? If the plan is to eventually live on the property, buyers will want to make sure these amenities are available, or can be at some point in the future.
How accessible is the land? Whether you build or not, survey the lot and make sure there is legal access to the property. If the property relies on an easement, you may want to consult with an attorney before going through with the purchase.
It is true, there is a lot to think about before buying vacant land. Once you have determined what your needs are, GreenStone’s service and loan flexibility make it convenient to finance the acreage you desire with a payment plan you can afford.
Cynthia Cole is a senior financial services office with GreenStone’s Ionia branch.
I was beyond thrilled when I was offered the internship at GreenStone in the Legal/Loan Processing department. I have studied banking at school and have a textbook knowledge of what credit services are and what they do. However, viewing the finance world from a legal standpoint is an opportunity I did not want to pass up. Not only was I considering going to law school—with a focus in banking—but I also knew that no matter where I ended up in the financial services sector, I would need to understand how the law and legal process work behind the scenes of lending.
I am a junior at Alma College. I am an Economics and Finance double major with an Accounting minor. I have a background in agriculture; my family owns two farm equipment dealerships as well as many acres of farm land. In the dealerships, customers use GreenStone to finance most of their purchases and so even before this internship, I was familiar with the services GreenStone provides. I was not familiar with how the loans were originated, however, and I was not familiar with the many processes behind originating the loans.
I am considering a wide variety of jobs in the financial sector—becoming a loan officer, financial advisor, bonds trader, or even compliance and law. I have studied many aspects of banking and financial markets at school, but I knew that nothing could possibly prepare me for what the real working world would be like unless I was actually able to take part in a financial institution. This internship has given me a larger perspective on the financial services industry than I could have possibly hoped to gain from any other financial institution. The fact that I was able to stay close to the agricultural industry, of which I am accustomed to, is even better.
Kelvin Alderman is a legal intern in East Lansing.
The great outdoors has a lot to offer – when you are ready to experience it on the next level, GreenStone can help! Whether you want to hunt, fish, play, retire or just escape, our loan options make it possible.
Here are the top three reasons to finance the great outdoors with GreenStone:
1. Small to Unlimited Acreage Financing
Whether you are looking to finance 10 acres or 100, we have options! Rural communities are our specialty, and financing large, vacant acreage is part of our routine business. When you’ve found the perfect parcel, GreenStone can finance it, no matter the size.
2. Flexible Financing Options
GreenStone offers flexible financing options, including competitive interest rates, 30-year amortization terms, and low down payments. Contact your local branch and a financial services officer will be happy to discuss your options!
3. Experienced Staff
Over 500 strong, we are the experts when it comes to financing rural communities. Our experienced staff is responsive and professional. Local teams are positioned to assist you quickly because when it comes to buying the perfect piece of land, timing is everything.
Are you ready for the next step? Contact us today to get started!
By Syed Naqvi
As an application systems analyst (ASA) intern, I am exposed to many different aspects of the tech field. This experience allowed me to participate in a variety of projects ranging anywhere from cosmetic tweaks to modifications of system workflows in order to fulfill the project requirements. The finer details of the skills that I have developed this summer will be the cornerstone of my career moving forward.
Being an ASA requires extensive knowledge on a variety of systems. This summer, I worked with two systems -- OnBase and Microsoft Dynamics CRM. OnBase is a very powerful software system providing ASA’s the ability to modify, create or delete a document type and set system workflows for our branches. However, in order to understand what projects I need to work on in OnBase, I also needed to learn Microsoft Dynamics CRM, as the two systems are closely linked.
An ASA needs to think critically when assessing new project requests. This is particularly important when analyzing a project’s return on investment and making adjustments that can reduce costs.
One of the most significant skills I have learned this summer is how to understand what each project requires, and the process of coming up with realistic solutions in order to meet deadlines. This skill set is an integral part of any IT job, which is why I now feel more prepared for my future professional career.
Syed Naqvi is an applications systems analyst intern in East Lansing.
Many of GreenStone Farm Credit Services’ employees have deep agricultural roots, including fond memories of time spent at county fairs and participating in 4-H activities during their youth. To help today’s generation of youngsters make those memories for themselves, GreenStone’s Traverse City location has announced an essay competition for 4-H participants.
GreenStone welcomes any eligible 4-H student participating in the Northwestern Michigan Fair to write a one-page essay on one of the following topics:
- How has 4-H impacted your life?
- What have you learned from raising a project animal?
- What does agriculture mean to you and why did you choose to get involved in agriculture?
The winning essay author will receive a junior beef steer that must be brought back to the Northwestern Michigan Fair the following year as a project entry. The winner will be announced at the 4-H awards banquet on Saturday, Aug. 13, 2016. A second prize winner will recieve $250 from GreenStone’s North Region Tax & Accounting Dept.
- In the event GreenStone is unable to purchase a steer at the fair, we will provide compensation to the winner to buy a project steer for the following year.
- All entries must be received by 12 p.m. on Friday, Aug. 12, 2016.
- All entries must include your name, address, 4-H age, parent/guardian info and phone number.
- Contestants must be present at the 4-H awards banquet on Aug. 13, 2016 to win.
Essays may be submitted by e-mail, mail or fax.
- Email: email@example.com or firstname.lastname@example.org
- Mail: GreenStone Farm Credit Services, 3491 Hartman Rd., Ste. A, Traverse City, MI 49685
- Fax: 231-946-0217
By Mitchell Black
Throughout the day, the anticipation had been building. From the morning trip out to St. Johns, to learning about branch services, to that final trek towards the dairy farm, questions had begun to bubble in my mind.
Questions such as:
“Why are all these houses so far apart?”
“Are there also hamburger cows here, or do they just make the cheese part of the sandwich?
And the questions of greatest concern, “Why did they warn us about wearing older shoes? What will we be stepping in? Why are you all laughing?”
Fortunately, my fellow interns were much more knowledgeable than myself, and to their credit managed to explain the concept of a working farm to someone who had never voluntarily left a city, with the bare minimum of sarcasm that must accompany such a conversation.
Despite their best efforts though, as we approached the dairy I was still wholly unprepared for what was to come. The fact that the first thing we saw at the farm, the rotary milking parlor, looked like something an alien species would use in Star Trek did not help matters. However, I quickly realized how unjustified my nerves had been.
For starters, all the people we met at the farm were extremely kind and knowledgeable about every aspect of their operation—from the birthing of new calves, to the electronic monitoring of their well-being, to knowing off hand details about milk quantities and market prices. Everyone involved in the dairy was clearly proud of what they had been able to accomplish, the efficiency and technological innovation they had been able to achieve, and it was amazing to be around people who were so invested and committed to their work day in and day out.
But as great as the people we met at the farm are, I have to admit that the true stars of the show were without question the cows. Here you’ll have to forgive the ramblings of inexperience, because I had never actually met a cow in person before, and the experience was lovely. In their disinterested stares, to their penchant for lying down, to their impressive commitment to food, I began to feel a certain kinship towards the cows.
As we piled into the car for the ride back to East Lansing, smelling like it was a good decision to wear old shoes, I thought about what I had learned. I had certainly not learned everything that it takes to be a good farmer—that much was clear. The amount of technical knowledge, the endless hours of hard work, the seamless weaving of the innovative and the proven, all of these things were still far outside of my abilities. However, I had gained an appreciation for those concepts, and an even greater appreciation for the men and women who can master them. I had gained some glimpse into the complexities required to bring food to the table every day.
All in all, a trip well worth taking.
Mitchell Black is a credit intern in East Lansing.
David Ballman is a regional vice president of sales and customer relations for GreenStone. He recently collaborated with industry peers to create a new program for Michigan State University Extension called Bridging the Experience Gap. He recently sat down with us for a question and answer session about the new program.
What is Bridging the Experience Gap?
Bridging the Experience Gap is an educational event presented by Michigan State University Extension for early career personnel working in agribusiness who want to gain knowledge, sharpen skills and better understand agricultural production people and systems. The courses will be held at the Saginaw Valley Research and Extension Center in Frankenmuth throughout August and September.
Can you tell me a bit about what attendees will learn during the program?
There are four sessions designed to help agribusiness professionals, especially those with limited farming experience, learn more about modern agricultural systems. The series includes 1) Cropping Systems, Soils and Tillage Equipment; 2) Communications and Farm Technology; 3) Livestock tour, Biosecurity and Food Security; and 4) Farm Management, including a tour of the Michigan Sugar Company and the POET Bio refining Ethanol Plant.
How is GreenStone involved in the program?
When the program was still in development, I was excited to join the board that did a lot of the planning for the sessions. There will also be presentations from GreenStone experts about farm finance and banking. Working on the team that put this program together was a very rewarding experience. I’m looking forward to August when the program kicks off. I think people will find a lot of value in the sessions presented.
Why do you think this program is so important?
As the current agribusiness workforce retired, there are fewer and fewer folks with on-farm experience ready to take those positions. This program provides an opportunity for professionals to gain the experience they need, network with peers and ask questions from tenured experts in the industry.
What is the cost and how do people register for the program?
Bridging The Experience Gap is $300 for all four sessions and includes training supplies and lunch. Registration is available online until July 25.