Management Books

Some time ago an employee asked me what I recommended for management books. With so many management books available, and more being published all the time, it isn't possible to read them all. Which ones, this employee wanted to know, did I recommend?

I recommend two books although neither is specifically a management book. In fact, I recommend these books for anyone. There are ideas and examples in these books to help you in many aspects of your life, including being a manager if that applies.

The first book is How to Win Friends and Influence People, by Dale Carnegie. The overall theme of this book is: try to see things from the other person's point of view. That applies regardless of which side of the table you are on, and whether the "table" is a desk at work or the dinner table at home.

You won't be a good manager or a good employee—or a good friend, partner or parent—if you are too stressed out. All of us feel stress, and so the second book I recommend is Dale Carnegie's less well known How to Stop Worrying and Start Living. This book is full of good ideas on how to beat stress before it beats you, and how to enjoy life more.

All Yankee offices should have a copy of each book, available for borrowing by employees. We also have a standing offer to purchase a copy for any employee who would like one. If any office or employee needs a book, please let Ruchel know.

Nanotech Feed

The previous post was about animal diseases. The most recent issue of Financial Partner magazine was about nanotechnology. Could nanotechnology treat or prevent animal diseases?

Researchers at Clemson University think so. Popular Mechanics magazine has an article about this research: Amid Food Scares, Nanotech Offers Healthier Option for Livestock. The gist is that nanoparticles that will disable disease causing organisms can be attached to animal feed. It is thought to be better than antibiotics, and might be available within five years. As the article notes, if it works for animals then human treatments won't be far behind.

Surviving a Bio-Disaster

What would happen to Vermont agriculture if a highly contagious animal disease, such as foot and mouth disease (FMD), was found in the state, or even in New York or Quebec? What would happen to the tourism industry in Vermont?

The likely answer is not encouraging. I recently attended a presentation by Dr. Julie Smith of UVM Extension and Dr. Steve Van Wie about the outbreak of foot and mouth disease in England in 2001. That event was disastrous for England: more than 6 million livestock were killed; the estimated cost to agriculture and tourism was in excess of $16 billion; and more than 60 farmers committed suicide. Nearby Ireland and Scotland suffered agricultural and tourism losses in the hundreds of millions of dollars.

Could it happen here? The United States has been free of FMD since 1929. But in today’s mobile world, the risks are high. England had been free of FMD, too. It is thought that England’s 2001 outbreak was caused by feeding pigs with imported food waste that was infected with the FMD virus.

Drs. Smith and Van Wie are presently involved in a project to improve the capacity of Vermont agriculture to survive a bio-disaster. Expect to hear more about this.

In the meantime, education is always good. If you know something about a risk, you can be thinking about how to deal with it. In addition to the links above, the USDA's Animal and Plant Health Inspection Service (APHIS) has a good web site about foot and mouth disease.

2009 Holidays

Yankee will observe the following Holidays in 2009:

Thursday, January 1 - New Year’s Day
Monday, January 19 - Martin Luther King’s Birthday
Monday, February 16 - President’s Day
Monday, May 25 - Memorial Day
Friday, July 3 - Independence Day
Monday, September 7 - Labor Day
Monday, October 12 - Columbus Day
Thursday, November 26 - Thanksgiving Day
Friday, November 27 - Day After Thanksgiving Day
Friday, December 25 - Christmas Day

Rural Debt Obligations

Last of four posts on Mission Related Investments (MRIs).

The two previous posts discussed equity MRIs. This post discusses debt MRIs.

CoBank recently developed a program for debt MRIs that it is calling Rural Debt Obligations (RDOs). CoBank has made this program available to its affiliated associations, and Yankee's board recently approved participating in this program.

While an RDO is a debt instrument, it is not a loan. It is more like a bond. RDOs can be issued for purposes that support farmers, agribusinesses and their rural communities. Examples include:

• rural or agricultural infrastructure
• essential rural facilities or equipment
• renewable energy projects
• value-added businesses

RDOs will be non-patronage.

If you have an investment that you think may qualify for an RDO, please contact Bill Heath.

FarmStart

Third of four posts on Mission Related Investments (MRIs).

Yankee is presently working on joining FarmStart, LLP, which will be its second equity MRI. FarmStart is an initiative of First Pioneer Farm Credit to make investments in startup farming operations (starter farmers). CoBank is also a partner in this initiative. Yankee has committed $500,000 to this initiative.

FarmStart investments are structured as subordinated non-recourse debt. The maximum investment in a farming operation is $50,000. Repayment of principal is due in 5 years. The interest rate is usually the prime rate, and interest payments are typically due quarterly.

FarmStart applicants must submit a formal application, including financial statements, a business plan and references. Successful applicants will be assigned a FarmStart Advisor who will work with them. FarmStart Advisors are loan officers who receive specialized training. Initially, Morgan Greenwood and Tom St. Pierre will be trained as Yankee's FarmStart Advisors.

UPDATE: Morgan, Tom and Bill Heath attended FarmStart training on June 17 at First Pioneer's Claverack, NY office.

Vermont Capital Partners

Second of four posts on Mission Related Investments (MRIs).

In December 2006, Yankee invested in its first MRI—an equity investment in Vermont Capital Partners. We committed to a $500,000 investment. To date only $400,000 has been called for.

Vermont Capital Partners is a joint venture between the Vermont Economic Development Authority (VEDA) and Brook Venture Partners, an investment company in the Boston area. Yankee has long worked closely with VEDA on farm loans, through VEDA's subsidiary the Vermont Agricultural Credit Corporation (VACC).

Here is the way Vermont Capital Partners works. A total of $4.75 million was raised, including $2 million from VEDA, our $500,000, and the rest from other Vermont investors. This $4.75 million was committed to Brook Venture Fund II, a venture capital fund managed by Brook Venture Partners. Total investments committed to Brook Venture Fund II are $32 million. In addition, Brook Venture Fund II is licensed as a Small Business Investment Company (SBIC) by the U.S. Small Business Administration (SBA), which means that it can borrow 2x its invested capital from the SBA on favorable terms. Altogether, therefore, Brook Venture Fund II has nearly $100 million available to invest.

Brook Venture Fund II seeks to invest in small companies throughout the Northeast and Mid-Atlantic states. It seeks to invest at least the amount of money raised from Vermont Capital Partners back into Vermont-based companies. As of 3/31/08, Brook Venture Fund II has invested $39 million in 11 companies, including two companies in Vermont for $6 million.

Mission Related Investments

It is part of the mission of the Farm Credit System "to provide for an adequate and flexible flow of money into rural areas" (Farm Credit Act of 1971, preamble). In support of that mission, Yankee Farm Credit is authorized to make loans to farmers, farm-related businesses, and rural residents (with some restrictions). Beyond those authorities, we can make such other investments as the Farm Credit Administration (FCA) approves.

In the past few years, FCA has encouraged Farm Credit System institutions to make "mission related investments." These are investments that are related to our mission of supporting agriculture and rural America, but are outside our specific lending authorities listed above. These mission related investments can be either debt investments or equity investments.

"Mission related investments" are sometimes called other names. They are sometimes called "Investments in Rural America" or "agricultural and rural community (ARC) securities." I will just call them "mission related investments" or MRIs.

Background on MRIs can be found on FCA's web site. Look for Informational Memorandums dated 6/25/04 and 1/11/05. (There they are called "Investments in Rural America.")

In November 2006 FCA approved a pilot MRI program for CoBank and its affiliated associations for a period of three years ending 12/31/09. In December 2006 Yankee invested in its first equity MRI (Vermont Capital Partners). This year we are moving toward investing in our second equity MRI (FarmStart), and we recently obtained board approval to invest in debt MRIs (Rural Debt Obligations). Details about these three MRIs in the next three posts.

Investing in Food

The New York Times had an interesting article last week titled "Food is Gold, So Billions Invested in Farming." The article discusses how high food prices are attracting increased investment in farmland and farming infrastructure around the world.

Please feel free to discuss in the comments what implications you think this might have for farming and Farm Credit.

Thanks to Ken Buzzell for pointing out this article.

Yankee cars for sale

The following company cars are available for sale. If you would like more information, please contact Ruchel St. Hilaire at 800-639-3053.

· $9,750, 2005 Toyota Camry LE, V6, 77,000 miles, gray.
· $9,500, 2005 Toyota Camry LE, V6, 80,000 miles, silver.
· $9,250, 2005 Toyota Camry LE, V6, 84,000 miles, sand/beige. This vehicle needs brakes and tires.
· $8,250, 2005 Toyota Camry LE, V6, 103,000 miles, silver. This vehicle needs struts and has a front-end noise.
· $8,750, 2004 Honda Accord LX, 80,000 miles, black, 4 cyl.

UPDATE 6/11/08: The Camry for $9,500 has been sold.
UPDATE 6/13/08: The Honda for $8,750 has been sold.
UPDATE 7/01/08: our cars are also listed in the classified section of our website.

John Peters Celebrates 35 Years

At a staff meeting yesterday we recognized John Peters for 35 years of employment with Farm Credit. John started work in June 1973 after graduating from UVM. He completed a 7 week training program with the Farm Credit Banks of Springfield, and then transferred to what was then the South Burlington association.

Congratulations, John! Here's to many more years.

Thanks to Ken Buzzell for the photo.

There were eight people that started in that Bank program with John. Four are still employed by Farm Credit: John, Dick Baldwin (now at FPI), Bill VanEe (now at WNY) and Bob Egerton (now at CoBank). Congratulations to all of you!

Vermont FFA

On May 21 John Peters and I attended a donor reception by Vermont FFA and the Vermont FFA Foundation. The Vermont FFA Foundation was celebrating its 50th anniversary, and the reception was to recognize long time donors. Yankee Farm Credit or its predecessors have supported the Vermont FFA Foundation for 42 years, according to their records. I don't know what happened to the other 8 years!

We are certainly proud to support the many worthwhile activities of FFA, which teach leadership, confidence, cooperation, career development and personal growth. Many FFA members go on to become leaders in agriculture, both on and off the farm.

The national FFA organization was founded in 1928, and state organizations soon followed. FFA Foundations, which came later, are the fund raising arm of FFA. Click here for an earlier post about NH FFA.

UPDATE 6/22/08: John Bradley of the Hannaford Career Center in Middlebury was kind enough to forward the photograph below. From left to right: Hannah Clark, 2007-2008 State Vice President; Everett Harris, President of the Vermont FFA Foundation; me; John; Katie Sartwell, 2008-2009 Executive Committee Chair; Governor Jim Douglas; Kate Reising, 2007-2008 Secretary; and Eryn McQuinn, 2007-2008 Reporter.

UPDATE 3/06/09: I was saddened to see Everett Harris's obituary in today's Burlington Free Press.

NEK Dairy Farmers

The following post was written by Loan Officer Kelly Langmaid:

On May 22nd the NEK Dairy Farmers traveled to the Jasper Hill Farm in Greensboro, VT for a tour of the farm and the cheese making facility. Five years ago two brothers, Andy and Mateo Kehler, started in the dairy business with dreams of making cheese and one dairy cow. Yes, one cow. Today they are making a name for themselves in the farmstead cheese industry, are in the final stages of construction of their state of the art cheese aging caves and milking 40 cows. For more information about this little company and its big dreams visit their website at: http://www.jasperhillfarm.com/.

Also, on May 22nd the NEK Dairy Farmers traveled to nearby Hardwick, VT for a tour of the Vermont Milk Co. This fledgling company opened its door in 2006 using fresh Vermont milk to make their line of dairy products. Today this company makes cheddar cheese, cheese curds, yogurt, and of course, ice cream. The group toured the plant, learning both the short history of the plant and how the various products are made. And the best part of the tour? Sampling the goods! Creamy chocolate ice cream, fresh off the line…yum! For more information about this tasty company visit their website at: http://www.vermontmilkcompany.com/

Carbon Trading

The following post was written by Vice President Mike Farmer:

On Tuesday, May 20th, Loren Petzoldt and I attended a training session on carbon trading sponsored by Cornell University. The purpose was to educate individuals working with farmers about opportunities to sell carbon offset credits. We both learned a lot and the speakers were very good.

Carbon trading is still a young industry in the US. The Chicago Climate Exchange (CCX) is the market clearing house for trading in the US. Carbon is traded on the CCX in metric ton carbon dioxide equivalents. Methane is 23 times more polluting than carbon dioxide as far as increasing greenhouse gas emissions.

Locally, Vermont has a Renewable Energy Credit available that provides substantially more revenue for farm producers than Carbon Credits, but these are primarily for the methane digester producers. Timber farmers could also benefit from selling Carbon Credits but they would be required to grant a permanent easement that essentially restricts timber harvesting forever.

Selling both Renewable Energy Credits and Carbon Credits is not allowed (no double dipping). The CCX has established rules to monetize the credits and third party verifiers audit and confirm that the credits are real. Typically an Aggregator acts as a middle man between the producers and the CCX to combine enough credits to meet the CCX minimum. Some of the Aggregators allow pooling of the credits for the producer and allows them to sell the credits at a later date (thinking the credits will be worth more in the future).

Neither Loren or I can think of any current customers that would sell Carbon Credits right now but as the industry evolves and more options become available, it may be another revenue source for our producers.

Introducing Heather Curler

We are pleased to welcome Heather Curler to our staff in the Middlebury office as a Credit Analyst. Heather is a recent graduate of Cornell University. She is a native of New Haven, Vt. Heather is not completely new to Yankee, she assisted the office with copying and file preparation during the past tax season.

Please join me in extending a warm welcome to the newest member of the Yankee team!