Farming UP Page 16

Gary J. Ash, President/CEO Board of Directors 1st Farm Credit Services, ACA Steve Cowser, Bradford, Chairman; Jeffrey Austman, Forrest, Vice Chairman; Kevin Aves, Kirkland; Brian Baldwin, Warrenville; John Baylor, Cuba; Clinton Brown, Towanda; Larry Fischer, Quincy; Kathleen Hainline, Stanford; David Keller, Mt. Carroll; Rod McGaughey, Carthage; Roger Newell, Williamsfield; David Peters, Manteno; Michael Pratt, Dixon; John Schmitt, Quincy; Roger Schrodt, Galesburg. Office Locations: Aledo 800-396-9041 Bourbonnais 800-388-0914 Edwards 800-747-0069 Freeport 800-695-3276 Geneseo 800-388-1238 Macomb 800-833-4390 Monmouth 800-432-6267 Morton 800-925-5277 Naperville 800-941-8847 Normal 800-247-3353 Oregon 800-388-1061 Ottawa 800-765-3276 Pontiac 800-844-8408 Princeton 800-388-3276 Quincy 800-396-9941 Rock Falls 800-688-3276 Sycamore 800-766-3276 Agribusiness Group Normal 800-847-3702 Edwards 855-756-9232 Capital Markets 630-527-6426 Corporate Headquarters 2000 Jacobssen Drive, Normal, IL 61761 309-268-0100 Editor: Karen Blatter Designer: Custom Graphics Country Spirit is published three times a year for clients of 1st Farm Credit Services, ACA. Please address any comments to Karen Blatter, editor, Country Spirit, 1st Farm Credit Services, 2000 Jacobssen Drive, Normal, IL 61761, (309) 268-0254 or [email protected]. Visit us online at www.1stfarmcredit.com.

Dear World: What Would You Say?

Karen Blatter Editor

If you were asked to share one message about yourself, passion or mission in life, what would you say? This was a recent challenge that I, and other Farm Credit System communication and marketing professionals, faced at the system’s annual Idea Share meeting. And, like most writers, we put pen to paper – or, in this case, skin. We were asked to take part in the Dear World project and share what we think others need to know about American agriculture. Once we created our message, it was written on our skin in black marker and then we had our photo taken. The Dear World project was created in 2011 by Robert Fogarty. He started the project with New Orleans residents who shared “love notes” to their city after Hurricane Katrina hit. Since then, he has expanded the art project and social experiment to document the stories and emotions of tornado victims, cancer survivors and Syrian refugees. After seeing Fogarty’s other work, I was left wondering – how can any message be as dynamic and telling as those that he already photographed? However, watching my peers prepare for the pictures, I realized our messages are just as powerful. We shared messages like: “No Farms, No Food.” “It’s in Our Blood.” “Pray for Rain.” And “Farmers Feed Us.” What we – Farm Credit employees and our clients – are doing is so much more than a job. It’s more than a way of life. It’s a service to others. It’s giving and maintaining life. And like many of Fogarty’s photos, it’s simply about survival. So, if you were asked to share one message about yourself, passion or mission in life, what would you say? Enjoy a few of ours. Thanks for Reading!

Follow us on: ©2013 1st Farm Credit Services

Check out the Dear World project at www.dearworld.me and find pictures from the Farm Credit Idea Share photo shoot at www.facebook.com/farmcreditnational. Photos courtesy of Dear World.

About the cover: Basil grows in an organic, aquaponics system as part of the FarmedHere Equal Credit Opportunity Lender. Equal Housing Lender. Equal Opportunity Employer.

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indoor, vertical farm. FarmedHere is the largest indoor, vertical farming operation in the United States. Read more on page 16. (Photo by Jon Cunningham)

Fall 2013

FEATURES 6 African Agriculture

Company hopes to create farming successes

12 Barn of Plenty

Barnacopia: A tribute to family and agriculture

16 Farming UP

Using vertical farming to grow local produce

22 Kohl’s Column:

Capital Expenditure Planning for 2014

DEPARTMENTS 4 CEO Letter 26 News Briefs 28 Team Members

On this page: Basil seedlings start emerging in grow plugs at the FarmedHere facility. Read more about the indoor vertical farm on page 16. (Photo by Jon Cunningham)

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CEO LETTER

Gary J. Ash

President/CEO 1st Farm Credit Services

A Wealth of Ag Lending Expertise

Recently, I had the opportunity to celebrate my 35-year anniversary with Farm Credit. When you are passionate about what you do, 35 years pass by very quickly. Earlier this year, we had two team members reach 40 years of service with the association, putting them among the longest-serving Farm Credit team members in Illinois. We also had a number of others hit milestones of 35, 30, 25 and 20 years. I have said many times: your association’s most important asset is its team members. Having this many team members with long careers with Farm Credit, as our association has, makes team members an even more valuable resource for our clients. I have learned that some of the best knowledge, skills and experiences are gained through working alongside our most experienced team members. Our highly tenured team members have a wealth of agriculture and financial expertise, which can provide great value to clients and our younger team members, who lack the experience of lending money when farm income was much lower. It is easy for many clients and team members who have less than 10 years in farming or agricultural lending to get caught up in the unprecedented success the industry has recently enjoyed.

Our most tenured team members are asked to devote some of their time mentoring our younger team members so they are ready to work with clients during good times such as now, and during times when clients are dealing with much tighter profit margins. We believe this is essential so we are to be able to serve our clients dependably. In past focus groups with clients, I heard firsthand that we have done a great job in hiring high-quality younger team members. I totally agree that we have been able to bring in new team members who are smart, understand agriculture, possess strong character and have been willing to learn from our most experienced team members. We place a lot of focus on having the best, most knowledgeable, dedicated team in the field to provide our clients with the greatest value possible. As we begin to see some of our most experienced team members retire during the next three to 10 years, we will strive to have newer team members ready to step in and continue to provide clients great value and world-class service. Congratulations to our highly tenured team members celebrating a milestone anniversary in 2013. I thank them for providing our clients the very best there is to offer in agriculture lending today, and for helping our newer, younger team members develop their knowledge and skills. u

Gary J. Ash President/CEO 1st Farm Credit Services

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Cultivating Master Farmers Announces Class of 2015 Members of the Cultivating Master Farmers Class of 2015.

1st Farm Credit Services, along with all the sponsors of Cultivating Master Farmers, are pleased to announce the members of the Class of 2015. Cultivating Master Farmers is designed to unite different generations of Illinois farmers through the exchange of personal ideas, knowledge and production experience. The two-year program matches young and beginning farmers with Prairie Farmer’s Master Farmers. The group meets a few times during a two-year period to exchange ideas about farming and rural life. The program started with its initial class in 2005. This is the fifth class for the program. Young Farmers Adam and Denise Albsmeyer, Plainville Brock and Natalie Boelens, Kewanee Scott and Tiffany Brown, Ottawa Maria Cox, Carrollton Matt and Hannah Garlisch, Forest City Brian Gordon, Rantoul Brett Haas, Bloomington Brandon and Sarah Hastings, Sidney Jim Hopkins, Yorkville Andy and Katie Pratt, Dixon Kraig and Jodie Soltwedel, Shumway Jay and Kristen Springer, Metamora Monica Stevens, Altona Wes and Jamie Strode, Macomb Elliott Uphoff, Shelbyville Master Farmers Mike and Judy Hennenfent, Knoxville Tim and Delreen Lenz, Strasburg Dan and Mary Meinhart, Montrose Rick and Pat Nelson, Paxton Jim and Sue Purlee, Galesburg Russell and Marilyn Rosenboom, Clifton Tim and Roxy Seifert, Auburn Jim and LouAnn Sheaffer, Dixon Terry and Jan Wolf, Homer

Members of the Class of 2013 graduated from the program in July. Those graduates are: Young Farmers Andrew and Karlie Bowman, Oneida Paul and Danelle Burrs, Dixon B.J. Busby, Rushville Brad and Carrie Gates, Carmi Steve and Dawn Huls, Saint Joseph Zach and Dena Hyde, Maroa J.D. and Kara Kuhns, Arthur Brent Lage, Anchor Phil Montgomery, Kirkland Grant Noland, Blue Mound Dale Pitstick, Genoa Dave and Kristine Soltwedel, Shumway Dirk and Lindsey Steele, Maquon Darrin and Christie Storm, Strasburg Darin and Amber Walker, Armington Master Farmers Tom and Mary Block, Pearl City Mike and Judy Hennenfent, Knoxville Dan and Mary Meinhart, Montrose Rick and Pat Nelson, Paxton Bill and Ruth Olthoff, Bourbonnais Russell and Marilyn Rosenboom, Clifton Kent and Wendy Schleich, Fairview Cultivating Master Farmers is also sponsored by Farm Credit Services of Illinois, GROWMARK, Illinois Farm Bureau, Monsanto and Prairie Farmer. u

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African Agriculture Company hopes to create farming successes Story by Karen Blatter Photos courtesy of Craig and Dave Nelson

OREGON – In September 2012, Craig Nelson gave up his job working as a crop specialist to move halfway around the world to Ghana, Africa, and farm.

About agriculture in Ghana n Located only 4 degrees north of the Earth’s equator, temperatures are 90 to 100 degrees during the day and low to mid-70s at night n Corn growth stages: Emergence 3 days after planting, tassel after 50 days, harvest (at 22 percent moisture) 120 days after planting. n With irrigation, able to plant 2 crops of corn with soybeans in between in 12 months. n Soils are heavy clay, with little organic matter, and have a shallow profile n National average corn yield is 28.6 bushels an acre n Testing sweet corn, wheat, peanuts, edible beans and other vegetables Source: Craig Nelson, farm manager of Africa Atlantic

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“The adventure and experience of working in a developing nation, to accomplish something that has never been successful, is a great motivator,” said Nelson, 26. “Our mission is to create jobs and wealth from land that is not utilized, helping to provide food security in a region of widespread hunger.” Through his position as a farm manager for Africa Atlantic, Nelson is working to help people in the small, rural area of Agbokpa, Ghana, learn and cultivate modern-day row crops. Nelson is the son of Dave Nelson, who works in the 1st Farm Credit Services Oregon Branch as a crop insurance specialist. Dave recently spent two weeks with his son learning more about his work on the other continent. “When he first said he was going to live and work there, we were worried,” said Dave. “But after seeing what he is doing, I know he truly believes in the mission.” The Ghana farm is the flagship operation for Africa Atlantic, which is working to bring large-scale agricultural efficiencies to underdeveloped rural markets. Craig lives and works daily on the farm, scaling back the modern-day practices he learned throughout his life to fit a country and area without infrastructure, technology and equipment that is just a step up from by-hand practices. “In Ghana, commercial farming is a relatively new concept,” Craig said. “We are figuring out nearly everything as we move forward and writing the book for future operations. In essence, we are the pioneers of commercial farming in Ghana.”

Far left: Workers on the Africa Atlantic farm in Ghana, Africa prepare a planter with corn seeds. Left: Craig Nelson holds an ear of corn in a field in Ghana, Africa. Helping locals with modern crop production is yielding about 110 bushels an acre, above the national average of 28. Below: Dave Nelson, a crop insurance specialist with 1st Farm Credit Services, works ground on the Ghana, Africa farm managed by his son, Craig. Bottom: Members of the African community of Agbokpa, Ghana, gather around one of the combines used on the Africa Atlantic farm, managed by Craig Nelson.

The farm is located near Lake Volta, which was a river that was damned up in the 1960s. The lake provides a water source, as well as transportation methods when crops are in larger production. While many people in the area have small, hand-planted and harvested crops to help feed families, similar to gardens, Craig’s team is trying to expand area residents’ knowledge, experience and ability to farm on a larger scale. They currently have 40 acres of ground in crop rotations. While visiting, Dave was able to help with some of the operations and work ground with the farm workers. “It’s an entirely different kind of farming,” Dave said. “The people are eager to learn. Now I can say I worked ground on two continents.” The farm is currently working a corn-soybean-corn rotation with irrigation. They are yielding about 110 bushels an acre, above the national average of 28. Craig said they are also testing different varieties and types of seed to see which ones are most effective in the soil. Craig said along with the challenge of accessing parts for breakdowns and repairs, teaching workers about operating equipment is an opportunity. (continued on next page)

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“Extensive training will need to take place before Ghanaians will become responsible tractor operators,” he said. “We hope to invite farmers to come to Ghana and operate equipment with Ghanaians in the ‘buddy seat.’” Although Dave said it’s a “country of extremes,” where water is delivered to people because there is not a safe water supply, yet almost all people carry a cell phone, commercial agriculture has a future in the nation. “It has been said that West Africa is the next Brazil – with plenty of land and opportunity to grow, the future looks bright,” Craig said. “However, commercial farming in the region has very few success stories. It’s Africa Atlantic’s hope that we can establish ourselves as pioneers in the region and guide future farming operations to successful establishments.” u

Learn more about Africa Atlantic’s efforts at www.africaatlantic.com.

Below: Corn is growing on the Africa Atlantic farm in Ghana, Africa. Africa Atlantic is helping communities learn and cultivate modern-day row crops.

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“In essence, we are the pioneers of commercial farming in Ghana.” – Craig Nelson

Farm Credit Donates $5,000 to FFA Chapters NORMAL – 1st Farm Credit Services recently donated a total of $5,000 to 20 FFA chapters in Illinois. FFA chapters throughout the state were given the donations after members attended the Farm Progress Show in Decatur wearing special T-shirts provided by 1st Farm Credit Services. The blue “Building Legacies” T-shirts were used to promote FFA and 1st Farm Credit Services during the three-day show. “This donation is a simple way to say ‘thank you’ and help support these young adults who are contributing to the future of agriculture,” said Karen Blatter, communication specialist with 1st Farm Credit Services. “FFA plays a critical role in exposing students to all the opportunities that exist in the agriculture industry. When members attend the Farm Progress Show, they learn about the up-and-coming technology and possible career paths in agriculture.” Chapters benefiting from the gift are: Alwood, Amboy, Annawan, Bureau Valley, Cuba, Griggsville-Perry, Kewanee, Lexington, Liberty, Mendota, Normal Community, Normal West, Pittsfield, Roanoke-Benson, ROWVA, Serena, Sherrard, Tri-Point, West Central and West Prairie FFA chapters. More than 1,000 FFA members statewide were given the T-shirts before and during the show. The two Farm Credit associations in Illinois donated more than $10,000 to 45 FFA chapters whose members wore the shirts at the show. u

Did you know?

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Ask For Us By Name! At more than 120 Equipment and Structure Dealerships!

To find out if your dealer offers ®

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We are

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(800) 444-3276 • w w w.1stfarmcredit.com Equal Credit Opportunity Lender. Equal Housing Lender. Equal Opportunity Employer.

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CROP INSURANCE

Add a Safety Net to Your 2014 Crop Prices with Revenue Net With market volatility, why wait to see what the February average is when you can eliminate the uncertainty by adding Revenue Net to your risk management plan.

How It Works Revenue Net allows you to make financial decisions well before the February average. Gain the ability to lock in a higher crop insurance base price with Revenue Net. Lessen the worry around affordable cash rents, input purchases and market prices by locking in your price – your safety net – today. Locking in prices in the fall and winter for the upcoming crop year helps to protect cash flow and eliminate the unknowns of the markets. Setting a pricing floor gives you the peace of mind to execute a successful risk management plan.

Added Coverage • • •

Revenue Net is an add-on to Revenue Protection plans of insurance. It is available on corn and soybeans with basic, optional and enterprise units. There is no exclusion for Trend-Adjusted Actual Production History.

Take one of the unknowns out of your future crop plans and lock in your price with Revenue Net today.

Thad Stauffer

Crop Insurance Product Manager

Revenue Net Advantage • • •

Revenue Net focuses on two-week pricing windows. Reduce wide monthly pricing swings. See your 1st Farm Credit Services Crop Insurance team for more details.

Upcoming Pricing Windows November 1 - November 15 November 16 - November 30 December 1 - December 15 December 16 - December 31 January 1 - January 15 January 16 - January 31

Make 1st Farm Credit Services Your First Choice By choosing 1st Farm Credit Services, you are backed by a team dedicated to crop insurance. 1st Farm Credit Services is the largest crop insurance provider in Illinois and works year around servicing policies and staying up to date with all the changes and regulations impacting crop insurance. Along with leading the industry in crop insurance, 1st Farm Credit Services is working with other industry experts to bring you innovative crop insurance products – like Enterprise Plus and Revenue Net – that fit your operation and protection needs. u

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Barn of Plenty Barnacopia: A tribute to family and agriculture Story by Karen Blatter Photos by Carlos T. Miranda

About Barnacopia Museum, bed and breakfast and reception hall Location: 2570 N. Westbranch Road in Polo Open: Thursday, Friday and Sunday: 1 p.m. to 5 p.m.; Saturday: 10 a.m. to 5 p.m. Website: www.barnacopia.com

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Contact: [email protected] or (815) 946-2500

Far left: Gary Bocker, owner of Bocker Grain, built the three-story Barnacopia to show his children, grandchildren and others what life was like on the farm before enclosed cabs and auto-steer. POLO – Barnacopia is just that – a barn overflowing with an abundance of memories, agricultural history and a tribute to the lives of Gary and Judy Bocker. The Bockers started the project about four years ago as a way to show their grandchildren the way life and agriculture used to be. However, but as the scope of the project grew, so did the barn.

Top left: A 1948 8N Ford is displayed in a glassed-in, floor case that visitors to Barnacopia have to walk over. It is the first tractor owner Gary Bocker drove when he was just four years old. Top right: Barnacopia is home to 14 restored tractors. Many are from the John Deere 10 Series.

Started the day after Thanksgiving 2011, the 150-foot-by-75-foot barn has three stories, while the neighboring silo holds four stories, including two bedrooms for a bed and breakfast. “We wanted the grandkids to see what life was like when we were kids,” Gary Bocker said. “It just kept on getting bigger, so we thought we would turn it into a business and host weddings, receptions and create a bed and breakfast.” (continued on next page)

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Top: The silo next to the barn has two bed and breakfast rooms. Guests can enjoy the luxury bathrooms, as well as the rest of Barnacopia, during their stay. Right: Growing up in Polo, Gary Bocker remembers going downtown to Mason Street. He recreated a portion of it in Barnacopia. Far right: Along with holding history, Barnacopia will be a place for events, meetings and wedding receptions. Guests will have access to the upper stories of the barn.

Walk Through Time

Attention to details is the key to Barnacopia. The first feature is the underground, glassed-over tractor. The 1948 8N Ford is the first tractor that Bocker drove when he was just four years old. Fully restored, it is the first part of the history he wants his grandkids to know about.

The first floor has many of the agricultural tributes, including a set of John Deere tractors from a 1010 to a 5010. “It’s just like walking through history,” Bocker said.

“When I started helping on the farm, we didn’t have enclosed, air-conditioned cabs,” Bocker said. “I want them to see what it was like and how farming has changed.”

Bocker also has a display of the progression of grain elevator leg conveyor belts, showing how the buckets have changed with technology. The first belt – made of fabric and metal – moved just 500 bushels an hour, compared to a modern-day rubber and plastic belt that can move 20,000 bushels an hour.

Bocker, 69, who owns Bocker Grain and farms, said the building houses 14 tractors, eight cars and a semi-truck.

A bin inside the barn serves as the enclosure for the elevator, used to access all floors of the building.

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Also on the first floor is a replicated milking house, with a mural on the wall, a 1950 and 1960s diner with an ice cream parlor and a replica of Mason Street in downtown Polo. “These are places I remember going to as a kid,” he said.

Revving Up

The second floor houses most of the vintage car collection – complete with the couple’s first cars. A 1953 Ford is the first car Gary drove at 12 years old and the red 1962 Corvair was Judy’s first car. The cars are placed around, and opened for seating, in the drive-in theater on the second floor. In the future, Gary hopes to show historical information about the barn’s contents in the theater. He said the family has used the area often to have movie nights together. A school bell, mounted between the first and second floors, is from the one-room West Branch schoolhouse. The couple attended and first met at a one-room schoolhouse when they were in third and first grades. Also, the second floor has a chapel, made from pews from a Christian church in Polo and an antique church window. They hope to use the area for wedding ceremonies.

Family Space

The third floor features a game room and is the prime family space. “This is a great space for grandma to create memories with the grandkids,” he said. The family uses the third floor for sleepovers, and the large windows overlook the farm. For receptions, guests can use the area for entertainment.

Grand Opening for the Barn

The grand opening for the barn took place in September and hosted more than 2,000 people. However, the first wedding held there was for the Bockers’ grandson, Winton. Bocker said they have many weddings scheduled and some guests for the bed and breakfast. People can tour the building when events are not planned. Every visitor gets free ice cream.

Bocker also pays tribute to his days as a Pioneer Seed salesman and his love of the Green Bay Packers.

“This was built to be a place where we could share stuff and have other people look around,” he said. “We wanted it to be overflowing.”

The crowning jewel of the third floor and Barnacopia is the spinning 620 John Deere Tractor at the top of the barn. Illuminated at night, it draws attention to the barn.

It’s hard for Bocker to narrow down his favorite part, but along with the creation of family memories, it’s the history that means the most.

“Judy asked if we could make it spin, so we found a car rotator from an old car showroom,” he said.

“The tractors are my favorite part. We should have made it bigger, so we could have fit more,” he joked. u

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Farming UP Using vertical farming to grow local produce Story by Karen Blatter Photos by Jon Cunningham

FarmedHere is the largest indoor vertical farming operation in the United States. Based in the Chicago suburb of Bedford Park, they raise and deliver more than 2,000 cases of product each month to stores within a 50 mile radius. They are leaders in the area’s sustainable and local foods movement. Read more …

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About FarmedHere Sustainable, indoor farming Largest vertical farm in the United States Produces basil, arugula, salad mixes and tomatoes Secondary line of basil vinaigrettes Found in nearly 70 stores in the Chicagoland area Website: www.farmedhere.com

Terms to know: Vertical farm: An indoor farm, similar to a greenhouse, where plant beds are stacked on top of each other. Located in urban areas to serve local populations of consumers. Viable crops include strawberries, tomatoes, peppers, cucumbers, herbs and spices. Can harvest year around with controlled conditions. Supporters see it as a way to feed the world’s growing population. Hydroponics: Growing plants without soil using a mineral-rich water solution. Aquaponics: The combination of aquaculture – raising fish – and hydroponics in the same water system. The aquaculture water is full of nutrients the plants can use to grow. Aeroponics: Growing systems are an innovative way to hydroponically grow plants by keeping their roots in a nutrient-rich mist. Sources: farmedhere.com, verticalfarm.com

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Farming UP Using vertical farming to grow local produce

BEDFORD PARK – When Jolanta Hardej came to the United States nearly 30 years ago from Poland, one of the first major differences she noticed was the food supply system. “Every day, we got fresh-baked bread from a bakery and fruits and vegetables from my grandmother’s garden,” she said. “Local, fresh foods are just a way of life in Europe. I’ll never forget the first time I went to the grocery store in the United States and saw the isles of processed, canned foods. It was so different.” The first impression never left her, and since then she has strived to feed her family fresh and natural local foods. Now, she has turned that impression and passion into one of the largest indoor vertical farming operations in the United States.

Left: Steve Denenberg, chief financial officer for FarmedHere, shows the root system and plants growing in the floats, which are part of the first indoor USDA Certified Organic aquaponics system. Below: Jolanta Hardej, CEO of FarmedHere in Bedford Park, said she is consistently inspired to build her business by people’s desire to find healthy, fresh and local foods. Right: FarmedHere is experimenting with different plants and greens in their aeroponics system to see what grows best. They currently have seen success with arugula and mixed greens.

As CEO of FarmedHere, Hardej and her business partners have created an impact on the Chicagoland local foods movement.

“All of the concepts he was talking about made us start thinking we could grow crops indoors,” Hardej said. “We were just mesmerized.”

“More and more people are looking for local, fresh and organic-raised foods,” she said. “We offer a variety of crops that can deliver that. It’s a lot of work, but we are very passionate about what we are doing.”

Later in 2010, they planted their first crops in an unused warehouse, with Hardej going to stores having owners sample the products from plastic bags – they added a brand and packaging later. “People liked what we were doing and started getting interested,” she said. “We needed to prove we could package and distribute it and that people would buy it.”

Basil: Coming Up

Prior to 2010, FarmedHere business partners Hardej, Paul Hardej and Steve Denenberg were all involved in the housing market and struggled after the 2008 bubble bust. After hearing a presentation by vertical farming expert Dickson Despommier, they started looking into the local foods movement and how they could be part of it.

Today, FarmedHere products are shipped every other day to nearly 70 Chicagoland stores. Overall, they produce more than 2,000 cases of product each month and currently sell eight products. (continued on next page)

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Left: The aeroponics system uses a system of flats prepared with fleece cloths to grow plants. It mists the plant roots for one minute and then off for a minute to keep the plants growing. Below: Steve Denenberg, chief financial officer for FarmedHere, explains the reactions people have to seeing a vertical farm going “up and up,” where there can be several levels of plant beds and lighting. Right: Colin Gleeson stocks shelves with FarmedHere products in the Mariano’s grocery store in Chicago. Products are delivered every other day to stores within 50 miles of the FarmedHere facility.

Growth Center

FarmedHere is now located in a warehouse in Bedford Park and employs about 20 people. The aeroponics system allows FarmedHere to grow several crops and experiment with new systems. Leafy greens are grown on flats, using a fabric to bed the seeds in. Plants like basil and tomatoes are placed in trays. The aeroponics system sprays the roots with water for one minute and then goes off for one. The growing system is six trays high and runs the length of the warehouse. Along with being the largest indoor vertical farm, they are also the first indoor USDA Certified Organic aquaponics system. Denenberg said the aquaponics system utilizes about 3,000 fish to grow about 30,000 plants, stacked in a five-high tray system. They are currently using the system to grow basil, tomatoes and lettuce and hope to grow strawberries in the future. The system filters and cycles the water from the fish, using the natural nutrients to feed and water the plants. The seeds germinate in grow plugs and are transferred to tray systems, where they sit with their roots in water. Basil lives in the system for 40 days and is harvested twice. FarmedHere turns small basil leaves into a vinaigrette-type dressing they package and sell.

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Research and Development

Paul, the chief operations officer, is the inventor of the group and custom-built many of the systems used in the operation. Finding best practices for growing different crops is key to FarmedHere’s operation, Denenberg said. They track all aspects of each plant, down to the water temperature. “We are always looking for the best way to grow our products,” he said. “We are always trying something new. Right now we are experimenting with different salad mixes.” Paul also designed the four-sided store packaging used for most of the products. They are designed to keep the greens fresher longer and also be environmentally friendly.

Fresh and 50

The products are sold in stores within 50 miles of the Bedford Park farm, and delivered every other day. “People want to know where their food is coming from,” she said. “Once people understand our system, and that it is grown locally, they buy our products.” Another key to their business plan is putting a face to the operation. They have three employees who travel to all the stores that carry their products to talk about the operation and products. Hardej said another key is building a relationship with the store owners and managers. They offer tours of their operation to explain how it works.

“It’s a lot of work, but we are very passionate about what we are doing.” – Jolanta Hardej

“Seeing where FarmedHere products are grown is really important to many customers,” said Robert Lorenty, produce manager at Mariano’s on Monroe and Halsted in Chicago. “What they are doing is awe-inspiring. They have a good product at a good price. The green packaging appeals to many people.”

Going On and Up

Hardej said the company plans on expanding production in their current warehouse space to capacity. They plan on first adding another organic aquaponics system. Then they’ll look at expanding to other urban areas, and one day hope to be located in all urban areas in the United States. “We hope to pass this business on to our children and be partners for a long time,” she said. “Our farm is about our values and finding a better way of eating and growing food.” u www.1stfarmcredit.com •

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K O H L’ S C O L U M N

Capital Expenditure Planning for 2014

David M. Kohl Ph.D.

There is crispness in the air and the chill of winter is providing the first taste of what is to come. Whether riding the combine or working cattle, thoughts drift toward what should be done to upgrade equipment, facilities or livestock, and whether to purchase or take a pass on the farm next door.

business would have $400,000 allocated either toward debt service or cash that would be utilized for capex. Another angle would be to use a metric of 25 percent of EBITDA (earnings before interest, taxes, depreciation and amortization) as a capex guideline.

Capital expenditure decisions, or what they call “capex” financial news, are strategic decisions analogous to the NFL or NBA draft. That is, the choice could lead to accelerating your business to another level or place your business in the financial jailhouse for an extended period of time. Generally, capital expenditures are higher when business profits and the economic cycle are strong, compared to during down cycles or periods of suppressed profits.

When prioritizing capital expenditures, focus on increasing efficiency first, before growing the business. To objectively conduct this element of capex planning, each team member must come to the planning meeting with three ways the proposed capital expenditure would improve efficiency. Sometimes partial budgeting, the old time-tested farm management tool, can be a simple but powerful way to examine various scenarios. Partial budgets focus specifically on whether added returns and reduced costs of implementing a decision are greater than reduced returns and added cost of implementing it.

Capex planning is a very important element of short- and long-term business planning that is frequently addressed superficially and emotionally, rather than objectively and in a planned fashion. Cash flow, working capital borrowing needs, profitability and tax planning are also integral elements of the capex planning process.

Planning Process

First, planning for capital expenditures is a vital part of overall strategic planning. Capex planning requires the management team and owners to first examine the status and condition of equipment, machinery and technology, as well as buildings, structures and quality of livestock, land and other productive assets. Three terms assist in determining replacement needs due to the condition of these assets: rusted out, worn-out or faded out, which refers to technological obsolescence. If the business is profitable, a metric should be established to upgrade the net capex minus trade-ins by 5 percent to 20 percent of the total asset base annually. For example, if the asset base is $2 million, then $100,000 to $400,000 of capex would be allocated for upgrades to maintain the asset base. Any growth or expansion in the business through capital expenditures would be additional. A guideline concerning cash flow is for the cash outlay and amortized debt service as a result of capex to represent 5 percent of revenue. For example, an $8 million revenue

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A lesson learned in capex planning is always to plan for the unexpected. With this in mind, an allocation of 20 percent of the total capex budget should be set aside for surprises, either good or bad. This will assist the management team and owners in being more proactive in the decision-making process. Of course, a capex plan needs to mesh with cash flows. Testing scenarios with various revenue, cost, production and interest rate estimates in your plan will be a delight to your lender, but will also offer you peace of mind in the planning process and the execution of these plans.

Capex Planning Blunders

One of the biggest blunders in capex planning is purchasing assets only for tax reasons. Yes, tax planning is an important part of capex planning; however, balance it with cash-flow analysis and possible efficiency and growth scenarios. An often overlooked element is determining how much capital expenditures influence financial ratios such as the term debt and lease coverage ratio, working capital to revenue ratio, current ratio, debt and equity ratios, and overall profitability. Binge purchases after an unusually profitable year or series of years based on non-reoccurring profits can result in financial stress down the road. (continued on page 30)

1st C O L U M N

Farmland Value Trends in 1st Farm Credit Territory I am sitting in my office in mid-September as I look back on three years of unprecedented increases in farmland values. By the time this article is published later in the fall, there should be a clearer perspective about where land values are going into 2014. As I have recently listened to different speakers and read numerous articles, I hear some common themes: commodity price expectations are down for the fall and many experts are projecting softer land markets after harvest. While that is not the focus of my article, it is something in the back of many people’s minds as we enter the harvest season. 1st Farm Credit Services uses a benchmark valuation system to track land values over time by appraising the same 19 farms on an annual basis. These farms consist of a full range of agricultural properties, plus a recreational farm added in 2013, distributed throughout the association territory. For consistency purposes, these farms are reappraised as of July 1 of each year. During the 2013 benchmark update period, each of the 19 association benchmarks increased since 2012, ranging from a low of 5.8 percent to a high of 63.3 percent. The highquality Class A benchmarks averaged $13,864 an acre and increased in value 30.3 percent for the period; the Class B benchmarks averaged $11,064 an acre and increased 26.5 percent; the Class C benchmarks averaged $8,042 an acre and were up 30.1 percent; while the recreational benchmark was valued at $3,500 an acre and was up 7.7 percent. The threeyear average changes for the Class A, B and C benchmarks are 87.8 percent, 84.2 percent and 80.4 percent, respectively. The increases mostly occurred from harvest through the end of 2012. While there are exceptions, land markets have been stable since the beginning of the year in most areas of the association’s territory.

Michael K. Morris

Chief Appraiser, ARA, MAI

Post-harvest demand for land was strong in 2012 despite drought conditions and poor yields in many areas. Crop insurance proceeds and strong commodity prices for producers with good crops were positive factors in the market leading to significant increases in post-harvest land values in 2012. Land markets tend not to move much during the summer months and current demand appears to be flat with little supply being pushed onto the market. Demand generally is influenced by yields and commodity prices and there should be a clearer picture as harvest unfolds. Demand for recreational properties remains weak to moderate with small increases for recreational farms with some cropland on them. Values for land in transitional areas peaked in 2007 to 2008, fell significantly in 2009 and have stabilized near values of agricultural land of similar quality in other areas. As of mid-September 2013, the outlook for grain prices is significantly below the 2012 levels. Futures prices began to decrease through the summer to near $4.50 a bushel for corn while soybeans hit lows in early August to recover to near $13.50 a bushel. Both levels are well below the $8 a bushel and $17.50 a bushel futures prices we saw in 2012. Cash corn bids are currently near $4.30 a bushel and cash soybean bids are near $13.60 a bushel. Cash rental rates and land prices began to increase during the fourth quarter of the 2010 through the end of 2012. Cash rental rates are also influenced by commodity prices and could experience some downward pressure if commodity prices remain near current levels. While we have seen strong year-over-year increases in land values the past three years, most signs point to modest increases to possible decreases between 2013 and 2014. u

Benchmark Value Changes July 2010 to 2013 Class of Land

Average Value

1-year change

3-year change

1 - A High Quality Farmland

$13,864

+ 30.3%

+ 87.8%

2 - B Good Quality Farmland

$11,064

+ 26.5%

+ 84.2%

3 - C Average Quality Farmland

$8,042

+ 30.1%

+ 80.4% www.1stfarmcredit.com •

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Split Pricing Provides Security This summer and fall have brought a drastic rise in intermediate and long-term interest rates. This has been due to continued improvement in the overall economic picture but most notably Federal Reserve Chairman Ben Bernanke’s June 19 press conference. During questioning, Bernanke hinted that the Fed could begin tapering its current $85 billion monthly asset purchases, quantitative easing, later this year and bring the program to a close by mid-2014. Quantitative easing is where the Fed purchases financial assets, such as U.S. Treasury bonds and mortgage-backed securities, to put downward pressure on interest rates. The goal is to stoke economic growth and improve the labor market. The market immediately began pricing in the idea the Fed would no longer artificially hold down interest rates. This resulted in the 10-year U.S. Treasury yield rising to 2.98 percent on Sept. 5, a level not seen since July 2011.

Adam Gaskill

Financial Analyst

pull-back is surely welcomed. However, “taper” talk is not gone forever. It’s merely a matter of time before it is again on the Fed’s docket and grabs the market’s attention. What does this mean for our client owners and what can be done to minimize debt costs in the current interest rate environment? In the summer 2012 issue of Country Spirit, I explained how it was an opportunistic time to lock in longer-term interest rate pricing. This was because the yield curve at that time was very flat, meaning long-term rates were not at much of a premium over short-term rates. As of May 18, 2012, the difference between the two-year and 10-year U.S. Treasury yield was a super low 1.42 percent. Today’s interest rate environment is a much different story. As you can see in the chart below, the 2s10s spread has risen dramatically of late, even topping 2.50 percent in mid-August.

Market expectation was for the Fed to begin the “taper” at its Sept. 18 Federal Open Market Committee meeting. By the time Sept. 18 arrived, most market participants were convinced it was going to occur, questioning only the velocity the Fed would choose to embark on. As one can then imagine, the market was shocked when the Fed announced it was not going to taper. Instead, it voiced concern over two items in which it wants to ensure the economy could withstand before dialing back monetary support. The first concern is the rising interest rate environment discussed above. Rising rates tighten financial conditions and can hinder economic growth, particularly for a still recovering housing market. Because the recent rise in rates occurred so quickly, the Fed wants to await more evidence higher rates will not be a detriment to the still modestly growing U.S. economy. Second, the Fed is concerned about the current fiscal landscape. Washington was on the clock to pass a continuing resolution by Oct. 1 and is slated with again raising the debt ceiling by mid-October. At risk is a government shutdown and defaulting on U.S. debt, respectively. We’ve been here before and seem to always avert disaster; however, the uncertainty caused by the political posturing is evermore concerning and can have broader economic consequences. Just as rates ratcheted higher when Fed tapering was introduced, rates have retracted since tapering was not delivered. As of Sept. 27, the 10-year U.S. Treasury yield is down over 20 basis points since the Fed’s Sept. 18’s surprise. As a lender, this interest rate

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There  is  now  a  much  steeper  premium  to  lock  in  interest  rates  for  longer  terms.  Although  that’s  slightly   discouraging,  it  doesn’t  mean  long-­‐term  pricing  is  no  longer  an  option.  In  interest  rate  environments   There is now a much steeper premium to lock in interest rates such  as  this,  we  often  suggest  split  pricing.  Split  pricing  locks  in  a  portion  of  your  financing  needs  on  a   for longer terms. Although that’s slightly it doesn’t longer-­‐term   pricing   product  w hile  leaving  the   remaining   portion  odiscouraging, n  a  shorter-­‐term  pricing   product.  In  a   steep  yield  curve,  such  as  today,  this  approach  provides  the  security  of  some  longer-­‐term  fixed  pricing   mean long-term pricing is no longer an option. In interest rate but  also  the  benefit  of  the  still  very  low  shorter-­‐term  pricing  to  keep  your  overall  financing  costs  to  a   environments such as this, we often suggest split pricing. Split minimum.     pricing locks in a portion of your financing needs on a longerContact  your  local  1st  Farm  Credit  Services  representative  to  discuss  your  optimal  mix  of  pricing   term pricing product while leaving the remaining portion on a products.  

shorter-term pricing product. In a steep yield curve, such as today, this approach provides the security of some longer-term fixed pricing but also the benefit of the still very low shorter-term pricing to keep your overall financing costs to a minimum. Contact your local 1st Farm Credit Services representative to discuss your optimal mix of pricing products. u

 

The New Website

Has Arrived! www.1stfarmcredit.com

 Brand new mobile website, adaptable to all devices  Fresh look with timely and informative updates, photos and videos  Login to private client features with a new convenient tab

YO U R

F I R S T

C H O I C E

Equal Credit Opportunity Lender. Equal Housing Lender. Equal Opportunity Employer.

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NEWS BRIEFS

Hoeft Named 1st Farm Credit Services Presidential Scholar NORMAL – Kyle Hoeft of Manito has been named the 2013 1st Farm Credit Services Presidential Scholar. Hoeft, a graduate of Midwest Central High School, is the son of Tarry and Teresa Hoeft. He has been active in 4-H and FFA and served as senior class president. Hoeft was selected from the 24 recipients of the First Choice Agriculture Scholarship awarded by the association to students furthering their education in an agriculture- or rural life-related field of study.

1st Farm Credit Services President/CEO Gary J. Ash presents Kyle Hoeft of Manito with the 2013 1st Farm Credit Services Presidential Scholar Award.

The Presidential Scholar exemplifies the intent of the scholarship program through his academics, goals and involvement. He will receive a total scholarship of $2,000. The honor was announced at the annual 1st Farm Credit Services scholarship luncheon. Hoeft plans to attend Illinois Central College to pursue a degree in diesel-powered equipment technology. He hopes to apply his knowledge of diesel mechanics to a career in agriculture and return to work on the family farm. u

Scholarship Applications Open Dec. 16

iPad Winner from Online Banking

Applications for the 2014 First Choice Agriculture Scholarship will be available from 1st Farm Credit Services on Dec. 16 online at www.1stfarmcredit.com or at your local branch office. The scholarship is open to graduating high school seniors who have been accepted into an agriculture or agriculture-related curriculum at a university, college or community college. The scholarship is to be used to pay for expenses related to obtaining a higher education. Applicants must also either reside or attend high school within 1st Farm Credit Services’ service territory. Agriculture-related fields include those that would contribute to the quality of life for people living in rural areas. Selections will be based on a combination of academic achievement, community and agricultural youth organization involvement and an essay. Students must also include an official high school transcript and photo. Recipients are selected by an independent panel of judges. Applications are due by Feb. 17, 2014. Please visit www.1stfarmcredit.com for more information or contact your local branch office. u

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26 CountrySpirit • www.1stfarmcredit.com

Adam Albsmeyer (left) of Plainville was presented an iPad from 1st Farm Credit Services Vice President Mark Wernowsky of the Quincy Branch. Albsmeyer won the iPad for using 1st Farm Credit Services’ Online Banking System to complete a transaction. Log in today to see how you can be entered to win. u

Online Banking Sign Up Today! 1st Farm Credit Services

Want a better way to easily access your money? Choose 1 st Farm Credit Services Online Banking Today!

Go to www.1stfarmcredit.com and follow these steps to activate your account: 1. 2. 3.

Hover over the green login on the top right corner of screen, when the drop down appears click on Online Banking Enrollment. To create your online account, enter your customer number, social security number or business identification number and click on the Continue button. Enter a few pieces of information to get started, then click on the Continue button: • • • • • • •

One of your FCS loan/lease account numbers Current principal balance of the loan/lease entered above Username - (you will need to create this) Password - (you will need to create this) E-mail address Internet connection preferences Marketing (Yes or No)

Review and accept the Master Online Banking Agreement by checking the E-sign box and click on the Continue button. You can save or print the agreement before clicking enter. 5. You will receive an e-mail confirming that you are ready to proceed to the initial login. It may take up to 20 minutes to receive the e-mail confirmation.

4.

Initial Login (Go to www.1stfarmcredit.com and hover over the green login when the drop down appears click on Online Banking.) 1. 2. 3.

Enter username and password and click login. The next screen consist of security questions to verify your identity if you log in from a different computer than the one you normally use. Select and answer the questions and click CONTINUE. The next screen consists of security questions to help in case you forget your password. Answer the questions and click OK.

YO U R

F I R S T

C H O I C E

www.1stfarmcredit.com

Need more help? If you get locked out of the enrollment process or have other Online Banking questions, please e-mail [email protected] or call Toll Free (855) 383-0860 7:00 a.m. to 5:00 p.m. Central Time, Monday through Friday.

Equal Credit Opportunity Lender. Equal Housing Lender. Equal Opportunity Employer.

www.1stfarmcredit.com •

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TEAM MEMBERS

Team Member Milestones 1st Farm Credit Services team members play a vital and pivotal role in the operations, service and success of the association. Their work and dedication to the association and clients is why 1st Farm Credit Services has world-class service and is a leader in the agriculture industry. Each fall, we honor and thank our team members who have reached milestones for their service to the Farm Credit System.

40 Years Chuck Knudson Senior Appraiser, Normal Branch “It seems like only a few weeks ago I that I had my 35th anniversary. It is true that time flies when you have interesting and enjoyable work. I was hired by the Federal Land Bank of St. Louis as a loan officer in February 1973. I have had many different opportunities and responsibilities over that time, and all were rewarding in some way. The changes in the community and agricultural industry continue at a rapid pace, but the constant factor has been that the people I have worked with as clients, other ag professionals and Farm Credit team members have been some of the best anywhere.” Don Manthe Vice President, Aledo Branch “I started my Farm Credit career in April 1973 as a field representative for Monmouth Production Credit Association in the Aledo office. Throughout my 40-year career, I feel very fortunate to have had the opportunity to work with many clients and their families. It continues to be rewarding to watch them succeed, prosper and attain many of their goals. I am very proud to be part of this growing organization and to have the relationships I do with my clients and co-workers.”

35 Years Gary J. Ash President/CEO, Central Office “By today’s standards, 35 years seems like a long time to work for one company and one industry, but it has flown by. As I look back on those years, what I cherish most is the people I have worked alongside; those who invested their time to make me a better steward for our association, its stockholders and Illinois agriculture. The years have gone by quickly because I love what I do. Helping others succeed and achieve their own milestones, both team members and clients, has been so rewarding for me. Today, it is so satisfying to see agriculture on such solid footing. We learn from our experiences over a career, and I have been blessed to have experienced so much and learned more than I could have ever imagined when I began my career with Farm Credit as a loan officer in central Illinois.”

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28 CountrySpirit • www.1stfarmcredit.com

Scott Clauson Regional Vice President, Macomb Branch “Throughout my 35 years at 1st FCS, I have seen a multitude of changes within the company, employees and the clients we serve. Through prosperous times and years of despair such as the ’80s, Farm Credit has been a solid source of information, funding, employee knowledge and exceptional service. Throughout mergers and agricultural financial ups and downs, the one thing that has remained constant is Farm Credit’s loyalty to its employees and making a point of including the staff in company successes and growth. I have had the opportunity to work with and hire many individuals who have become part of the Farm Credit family.” Terry L. Hinds Senior Vice President of Business Lending and Corporate Relations, Central Office “I’ve been incredibly blessed to be a part of the Farm Credit System and have passionately loved my work at Farm Credit during the past 35 years. Serving agriculture and helping others be successful has been especially rewarding. It’s also been very humbling to work with such dedicated, gifted professionals on a daily basis and to have the opportunity to meet and work with so many outstanding clients and others in agriculture. It’s been my honor and pleasure to be able to share Farm Credit’s incredible story with others and I love to tell the story regularly. Finally, I extend my heartfelt thanks to all the wonderful individuals who have been part of Farm Credit’s success and thank God for my incredibly rewarding career.” Ron Homann Risk Management Officer, Central Office “What an opportunity it has been to spend the last 35 years supporting agriculture. The Farm Credit System has a lot of dedicated people working to ensure this cooperative is providing our owner members with the services they need to succeed. The financial needs of agriculture are constantly evolving, so the challenges never end. It’s been a pleasure spending each day with a group of people focused on these challenges. 1st Farm Credit Services has been a great part of my life.”

Narlyn Nelson Regional Vice President, Morton Branch “We pride ourselves at 1st Farm Credit Services as being in the relationship business. I have seen this time and time again over the past 35 years of my career. I have seen up to three generations of farm families working in production agriculture and the transfer of the farming operation from one generation to the next. It is very rewarding to work in a strong, vibrant agriculture industry today. The biggest part of my position in the past few years is working with our branch team members. I believe both the farm families we work with and our team members are well positioned to serve a changing agriculture in the years to come. I am very fortunate to continue to work with so many dedicated and hardworking people!” Dale Richardson Vice President, Capital Markets Group, Naperville Branch “I’ve been so blessed to have spent my entire working career at 1st Farm Credit. My early involvement was with local farmers, but I now work with large agricultural and food-related companies all across the country. So I’ve really worked across the entire breadth of the food chain. I’ve found that people involved in food production serve a special purpose and they are great to work with.”

30 Years Jim Garvin Chief Financial Officer, Central Office “Farm Credit is a great company to work for. I have been privileged to work in four different states over a span of 30 years. Farm Credit has been a blessing to me and my family. Thank you for such a great career. I know of no other company that offers such a worthy purpose and where you can work with such great people.” Jeanie Hartman Financial Specialist, Quincy “1st Farm Credit Services is a great place to work. I have enjoyed getting to know the farm families that we serve in Pike and Adams counties. The Quincy team is great to work with. I consider them friends as well as coworkers.”

25 Years Jayne Garman Financial Specialist, Freeport Branch “It has been a pleasure working for 1st Farm Credit Services for the past 25 years. I have enjoyed watching our farm families grow and prosper over the years. I have wonderful people who I work with that have become my Farm Credit family. My job is very rewarding, and I hope to give many more years to Farm Credit Services.”

Bonnie Heitz Crop Support Specialist, Macomb Branch “Twenty-five years ago, I joined an organization that would become nothing less than a second family to me. Throughout my years here, I have been a witness to the effects of the farm economy and the impact it has had on our clients and our environment. 1st Farm Credit and I entered into the digital age together. I have been lucky enough to have been part of mergers that were “never going to happen” and also to take part in the celebrations to commend employees for those “never going to hit” goals that we’d hit! I have made some great memories and been part of some memorable moments.”

20 Years

David Abele, Vice President, Rock Falls Branch Mike Gillen, Commercial Lending Officer, Macomb Branch Herb Meyer, Senior Appraiser, Edwards Branch

15 Years

Chris Brown, Financial Specialist, Ottawa Branch Nancy Duby, Financial Specialist, Bourbonnais Branch Shannon Ganschow, Vice President Business Lending, Central Office Anita Rakestraw, Financial Specialist, Geneseo Branch Brad Slutz, Vice President, Sycamore Branch Dale Vogl, Senior Appraiser, Normal Branch

10 Years

Heidi Bubela, Portfolio Analyst, Central Office Jackie Darnall, Loan Accountant, Central Office Shane Kaiser, Crop Insurance Specialist, Monmouth Branch Doug Kridner, Vice President of Accounting and Financial Reporting, Central Office Dan Legner, Senior Appraiser, Princeton Branch Joyce Miller, Document Administrator, Central Office Dawn Poppe, Agribusiness Client Service Representative, Central Office Julie Powers, Document Administrator, Central Office Myron Rumbold, Crop Insurance Specialist, Princeton Branch Erin Smith, Financial Specialist, Macomb Branch Dusty Walker, Crop Insurance Specialist, Macomb Branch Mike Zook, Commercial Lending Services Officer, Central Office

5 Years

Jason Bollivar, Lending Services Analyst, Central Office Michael Burns, Vice President, Macomb Branch Nathan Ehrhardt, Insurance Specialist, Normal Branch Adam Gaskill, Financial Analyst, Central Office Chris Klinge, Financial Specialist, Ottawa Branch Lora Mellinger, Financial Specialist, Macomb Branch Vickie Runyon, Network Engineer, Central Office Erin Spaur, Manager-Organizational Effectiveness, Central Office Christine White, Document Administrator, Central Office Dana Wiegand, Vice President, Morton Branch

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Rehn Named Vice President-Rural Consumer Debby Rehn of Osco has been named a Vice President-Rural Consumer, serving clients in Henry, Mercer and Rock Island counties. She will help clients with rural home loans and will be based in the Geneseo Branch. Before joining 1st Farm Credit Services, she was the executive director of the Champaign County Farm Bureau Foundation. Rehn grew up on a farm and received a degree in agriculture and environmental communications and education with a concentration in agricultural leadership from the University of Illinois. u

Schell joins Quincy Branch Holly Schell of Liberty has joined the Quincy team as a crop insurance support specialist. She will work alongside Leslie Bent to help clients in Adams and Pike counties with all of their crop insurance needs. Schell grew up on a farm in Ursa and is a graduate of Western Illinois University with a degree in communication. She has been involved in 4-H and is school board president at St. Dominic School. She and her husband have four children. u

Sheaffer Receives Ag Fellowship Steve Sheaffer, vice president in the Rock Falls and Oregon branches, was selected for the McCloy Fellowship in Agriculture through the American Farm Bureau Federation. The fellowship is designed to create partnerships between American and German farmers and agricultural experts. Created in 1976, the McCloy Fellowship program was begun by the American Council on Germany to give young Americans and Germans the opportunity to develop transatlantic partnerships and build working relationships. The fellowship is in conjunction with the Deutscher Bauernverband, which is the German farmers’ association. Sheaffer is among four Americans selected for the fellowship. Through the exchange program, he will spend 21 days overseas, meeting with others in agriculture and learning about their practices, challenges and solutions for agriculture. Sheaffer will travel to Germany in October. u

Anderson and Wright Join Crop Insurance Team Mindy Anderson and Brooke Wright both have joined the Morton Branch’s crop insurance team as support specialists. They will work alongside Mike Deppert and Ryan Voorhees, helping clients with all of their crop insurance needs. Anderson of Eureka worked in the banking and crop insurance industry before joining Farm Credit. She is a graduate of Illinois State University with a degree in agribusiness. Wright of Washington joined the association in 2012 and worked in the credit department. She grew up on a grain farm in Washington and raises cattle and horses. She is a graduate of Illinois State University with a degree in agribusiness. u

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Kohl’s Column Capital Expenditure Planning for 2014 continued from page 22

The great commodity super cycle has resulted in prosperity in certain sectors of agriculture. This prosperity is leading to a “new blunder.” That is, nonfarm capital expenditures on nonproductive assets like lake houses, fancy hunting camps and helicopters. Recent farm record databases find that these expenditures average $330,000 annually for the top third of spenders and less than $1,000 for the low third. While everyone should have a chance to enjoy the fruits of their profits, do not get caught in the undisciplined pursuit of more of these unproductive types of assets. As the cold winds of fall and winter descend, map out your capex budget priorities. Examine needs and wants, and analyze scenarios of how capital expenditures will influence financial, management and operational components with volatile economic conditions and changing tax laws. u

1st Farm Credit Services Holiday Hours and Reminders All 1st Farm Credit Services branches and the Central Office will observe the following holiday hours:



Thanksgiving Holiday

November 28 and 29: Offices closed

Christmas Holiday



December 24: Open 8 a.m. to Noon December 25: Offices closed



New Year’s Holiday



December 31: Open 8 a.m. to 1 p.m. January 1: Offices closed All payments to be credited in 2013 must be received by 1 p.m. on Tuesday, December 31, 2013. Clients with a Funds Held account balance are reminded to notify their branch office by Thursday, December 26, 2013, if they wish to receive interest payment credit in 2013. u

See All About It! 2014

Thank You! Once again, our photographers proved there is a lot to See All About in rural America! We received more than 500 pictures for our 2014 1st Farm Credit Services Calendar and people cast more than 7,250 likes on our Facebook page. We hope you enjoy the calendar when it arrives in your mailbox in late November. Starting in January, we will feature a new photo on our Facebook page every week in our new series: Rural Route Wednesday. These are photos that were submitted for the calendar and liked on Facebook, however, they were not selected for the calendar. Thank you to everyone who submitted pictures. Rural America is great because of YOU!

www.facebook.com/1stFarmCreditServices

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2000 Jacobssen Drive, Normal, IL 61761

Barnacopia, located in Polo, is a tribute to agriculture and days gone by built by Gary and Judy Bocker. Read more about the Barn of Plenty on page 12. (Photo by Carlos T. Miranda)

PRST STD U.S. Postage PAID Permit #6000 Peoria, IL