Each Christmas Yankee directors and employees celebrate the diversity of local agriculture with a selection of tasty food products from farmers in Yankee's territory. This year's selection included:
Honey - from Chazy Orchards in Chazy, NY
Eggs - from Pete & Gerry’s Organic Eggs in Monroe, NH
English Muffins and Cheese (either gouda or fresh mozzarella) - from The Bunten Farm in Orford, NH
Maple Brittle - from the Green Mountain Sugarhouse in Ludlow, VT
Apple Maple Wine - from the Putney Mountain Winery in Putney, VT
Maple Candy - from the Parker Family Maple Farm in West Chazy, NY
Farmstead Butter - from the Animal Farm in Orwell, VT
Apple Bread and Raspberry Danish - from Rulfs Orchard in Peru, NY
Fudge - from Sam Mazza’s Farm Market in Colchester, VT
Maple Syrup - from Maple Oak Ridge Farm in Salisbury, VT
We extend our sincere appreciation to all farmers in Yankee's territory for the wonderful bounty from their farms.
Thursday, December 24, 2009
Tuesday, December 22, 2009
AgEnhancement Grants
Northeast Farm Credit AgEnhancement awards $31,000 in grants to 17 programs
Grants funded in December 2009:
VT Holstein Young Dairy Leaders Institute, $2,000
NYS All Breeds Convention 2010, $2,000
NOFA NH Organic Farming Conference, $500
Vermont Holstein Show Calf Summit, $1,500
Cornell Dairy Fellows, $5,000
Farmers Market Federation of NY, $1,000
2010 Maine Farmers Market Convention, $1,500
New Jersey Agricultural Leadership Program, $5,000
MA New Entry Sustainable Grass Farming Project, $2,000
Massachusetts Ag in the Classroom, $1,000
Empire State Forest Products Association, $500
NY Holstein Association Spring Dairy Carousel, $1,500
MA Community Involved in Sustaining Agriculture, $1,000
Cape Cod Cranberry Growers Association, $4,000
NH Farm & Community Connection Food Passport, $1,000
NOFA VT Organic Farming Conference, $500
UMASS Student Farmer Program, $1,000
Northeast Farm Credit AgEnhancement is a regional grant program funded by Yankee Farm Credit together with CoBank, First Pioneer Farm Credit, Farm Credit of Western New York and Farm Credit of Maine. Since it's 1996 inception, the program has awarded $1,080,800 through 406 grants.
Click here for more information.
Grants funded in December 2009:
VT Holstein Young Dairy Leaders Institute, $2,000
NYS All Breeds Convention 2010, $2,000
NOFA NH Organic Farming Conference, $500
Vermont Holstein Show Calf Summit, $1,500
Cornell Dairy Fellows, $5,000
Farmers Market Federation of NY, $1,000
2010 Maine Farmers Market Convention, $1,500
New Jersey Agricultural Leadership Program, $5,000
MA New Entry Sustainable Grass Farming Project, $2,000
Massachusetts Ag in the Classroom, $1,000
Empire State Forest Products Association, $500
NY Holstein Association Spring Dairy Carousel, $1,500
MA Community Involved in Sustaining Agriculture, $1,000
Cape Cod Cranberry Growers Association, $4,000
NH Farm & Community Connection Food Passport, $1,000
NOFA VT Organic Farming Conference, $500
UMASS Student Farmer Program, $1,000
Northeast Farm Credit AgEnhancement is a regional grant program funded by Yankee Farm Credit together with CoBank, First Pioneer Farm Credit, Farm Credit of Western New York and Farm Credit of Maine. Since it's 1996 inception, the program has awarded $1,080,800 through 406 grants.
Click here for more information.
Agricultural Preparedness Stakeholder Meeting
Susan Kelley, senior loan officer from the Middlebury office, attended an Agricultural Preparedness Stakeholder Meeting at the American Legion in Vergennes on December 17th. Dr. Julie Smith of UVM and Dr. Steve Van Wie, veterinary emergency preparedness consultant, provided an update of the research and extension activities designed to enhance Vermont’s ability to prevent, prepare for and respond to a bio-disaster.
The project “Cost and Challenges Associated with Developing and Implementing a Community-Wide Biosecurity Plan” has been selected for funding by the USDA National Institute of Food and Agriculture. This project will work directly with four dairy producers to prepare a cost-benefit analysis of a bio-security plan. Stakeholders will help identify incentives to encourage the implementation of recommend procedures on farms.
The program will stress the importance of contact monitoring on the farm and the risk of disease exposure from outside contacts. “Model” biosecurity operating guidelines and protocols will be developed as an “all hazard” plan.
See also this earlier post on bio-security.
The project “Cost and Challenges Associated with Developing and Implementing a Community-Wide Biosecurity Plan” has been selected for funding by the USDA National Institute of Food and Agriculture. This project will work directly with four dairy producers to prepare a cost-benefit analysis of a bio-security plan. Stakeholders will help identify incentives to encourage the implementation of recommend procedures on farms.
The program will stress the importance of contact monitoring on the farm and the risk of disease exposure from outside contacts. “Model” biosecurity operating guidelines and protocols will be developed as an “all hazard” plan.
See also this earlier post on bio-security.
Thursday, December 17, 2009
Financial Records - How good?
Post #4 of 4 in a series of posts about financial records. See the bottom for a list of the 4 posts.
How good do your financial records need to be? How good is good enough?
The answer to that question will vary with the situation. Your loan officer can answer questions about your particular situation. Generally the larger your debts or the tighter your cash flow, the better your financial records need to be. And every borrower should be able to reconcile their checkbook exactly.
We offer a variety of recordkeeping services, both on the farm and in our office. Please contact your local branch office for more information if you are interested.
If your operation is large enough, you might consider employing a financial controller on your staff. We discussed financial controllers in the Fall 2009 issue of Financial Partner magazine (2 MB PDF file).
For some of our largest borrowers, we may require accountant prepared statements. Such operations will probably benefit from a financial controller on staff to work with the external accountant.
This is part of a series of 4 posts on this subject:
Financial Records - Letter to Members
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
How good do your financial records need to be? How good is good enough?
The answer to that question will vary with the situation. Your loan officer can answer questions about your particular situation. Generally the larger your debts or the tighter your cash flow, the better your financial records need to be. And every borrower should be able to reconcile their checkbook exactly.
We offer a variety of recordkeeping services, both on the farm and in our office. Please contact your local branch office for more information if you are interested.
If your operation is large enough, you might consider employing a financial controller on your staff. We discussed financial controllers in the Fall 2009 issue of Financial Partner magazine (2 MB PDF file).
For some of our largest borrowers, we may require accountant prepared statements. Such operations will probably benefit from a financial controller on staff to work with the external accountant.
This is part of a series of 4 posts on this subject:
Financial Records - Letter to Members
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
Financial Records - Cash vs. Accrual
Post #3 of 4 in a series of posts about financial records. See the bottom for a list of the 4 posts.
Every set of financial records needs a statement of operations to summarize income and expenses for the period. Often we refer to this as a statement of income and expenses, or simply an income statement.
A key concept to grasp is the difference between cash basis and accrual basis income statements.
A cash basis statement captures just the transactions that went through the checkbook. An accrual basis statement captures all of the cash transactions plus such additional transactions as are necessary to "fairly" present the results of operations.
What do I mean by that? Here are two examples:
Perhaps you sold something this year but will be paid for it next year. On a cash basis, the income will be recorded next year (when paid). On an accrual basis, the income would be recorded this year (when sold).
Perhaps you purchased and paid for extra feed or supplies at the end of the year, but they have not been consumed yet. On a cash basis, the expenses are recorded in the current year (when paid for), but on an accrual basis they would be recorded in a future year (when consumed).
The key concept in accrual accounting is matching up income and expenses in the same period. Expenses should be recorded in the same period as the corresponding income.
As lenders we generally like to look at income statements on both a cash basis and an accrual basis. Cash flow is important because that is what is needed to repay debt. But accrual income is also important because that is what reflects the true profitability of the enterprise.
Most farmers keep their books on a cash basis, because that is the most common basis for filing income tax returns. That is fine; we are used to working with that. We can usually make such accrual adjustments as are needed for our purposes by asking only a few additional questions, as long as we have good beginning and ending balance sheets.
This is part of a series of 4 posts on this subject:
Financial Records - Letter to Members
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
Every set of financial records needs a statement of operations to summarize income and expenses for the period. Often we refer to this as a statement of income and expenses, or simply an income statement.
A key concept to grasp is the difference between cash basis and accrual basis income statements.
A cash basis statement captures just the transactions that went through the checkbook. An accrual basis statement captures all of the cash transactions plus such additional transactions as are necessary to "fairly" present the results of operations.
What do I mean by that? Here are two examples:
Perhaps you sold something this year but will be paid for it next year. On a cash basis, the income will be recorded next year (when paid). On an accrual basis, the income would be recorded this year (when sold).
Perhaps you purchased and paid for extra feed or supplies at the end of the year, but they have not been consumed yet. On a cash basis, the expenses are recorded in the current year (when paid for), but on an accrual basis they would be recorded in a future year (when consumed).
The key concept in accrual accounting is matching up income and expenses in the same period. Expenses should be recorded in the same period as the corresponding income.
As lenders we generally like to look at income statements on both a cash basis and an accrual basis. Cash flow is important because that is what is needed to repay debt. But accrual income is also important because that is what reflects the true profitability of the enterprise.
Most farmers keep their books on a cash basis, because that is the most common basis for filing income tax returns. That is fine; we are used to working with that. We can usually make such accrual adjustments as are needed for our purposes by asking only a few additional questions, as long as we have good beginning and ending balance sheets.
This is part of a series of 4 posts on this subject:
Financial Records - Letter to Members
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
Financial Records - Reconciling
Post #2 of 4 in a series of posts about financial records. See the bottom for a list of the 4 posts.
An important concept in keeping good financial records is the notion of reconciling. Reconciling involves three things:
- beginning balance sheet
- ending balance sheet
- statements summarizing transactions that occurred in the period between the beginning and ending balance sheets
Transactions in the period between the beginning and ending balance sheets can be summarized in three areas:
- operating transactions (e.g., income and expenses)
- financing transactions (e.g., incurring or repaying debt)
- investing transactions (e.g., acquiring or disposing of capital assets)
The concept of "transaction" includes more than just cash transactions. For example, the purchase of something on credit is a transaction and needs to be entered into your financial records at the time the transaction occurs even if there isn't any exchange of cash at that time.
If you can take your beginning balance sheet, apply the transactions for the period, and come up with your ending balance sheet, then your financial records reconcile.
Having financial records that reconcile does not guarantee that they are correct, but it's a good start. If your financial records do not reconcile, it's certain that there is a mistake somewhere. Either one or both of the balance sheets is incorrect, or there are missing or incorrect transactions in your records.
This is part of a series of 4 posts on this subject:
Financial Records - Letter to Members
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
An important concept in keeping good financial records is the notion of reconciling. Reconciling involves three things:
- beginning balance sheet
- ending balance sheet
- statements summarizing transactions that occurred in the period between the beginning and ending balance sheets
Transactions in the period between the beginning and ending balance sheets can be summarized in three areas:
- operating transactions (e.g., income and expenses)
- financing transactions (e.g., incurring or repaying debt)
- investing transactions (e.g., acquiring or disposing of capital assets)
The concept of "transaction" includes more than just cash transactions. For example, the purchase of something on credit is a transaction and needs to be entered into your financial records at the time the transaction occurs even if there isn't any exchange of cash at that time.
If you can take your beginning balance sheet, apply the transactions for the period, and come up with your ending balance sheet, then your financial records reconcile.
Having financial records that reconcile does not guarantee that they are correct, but it's a good start. If your financial records do not reconcile, it's certain that there is a mistake somewhere. Either one or both of the balance sheets is incorrect, or there are missing or incorrect transactions in your records.
This is part of a series of 4 posts on this subject:
Financial Records - Letter to Members
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
Financial Records - Letter to Members
The following letter is being mailed to members with the next monthly billing statement:
December 17, 2009
Dear Member,
I am writing to you about the importance of good financial records.
Farmers and businesses have always needed good financial records to prepare various tax forms. But they also need good financial records for their lender. That’s us. And the world of lending has changed in recent times, resulting in a need for better financial records from borrowers.
Many of you already provide excellent financial records to us. But in some cases we are requiring better financial records from borrowers than we have accepted in the past. This does not mean that we are questioning the borrower’s character. It simply reflects changing standards of business, and represents good business practices.
I encourage you to think about your financial records as something more important than merely a requirement for paying taxes or applying for a loan. I hope you use your financial records to help you make decisions about your business. Where can you grow? Where can you cut costs? Where in your business are you making or losing money? A good set of financial records can help you decide how to make necessary and timely adjustments when financial circumstances change, as they have for many Yankee customers in the past 18 months.
We can help you improve the quality of your financial records for the tax authorities, for your lender, and most importantly for yourself. Please call your local branch office for more information if you are interested in our recordkeeping services.
As your lender, what do we require for financial records? It will vary with the situation, and your loan officer can answer specific questions. But a good place to start is with a good year-end balance sheet. We will shortly be mailing year-end balance sheet templates to most borrowers. I encourage you to complete that template promptly and as accurately as possible, and to call your loan officer if you have any questions.
Thank you for your patronage. Best wishes for the holidays and for the New Year.
Sincerely,
George S. Putnam
President and CEO
P.S. Please visit our blog (yankeeaca.blogspot.com) for more discussion about financial records.
As promised, here are additional blog posts on this subject:
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
December 17, 2009
Dear Member,
I am writing to you about the importance of good financial records.
Farmers and businesses have always needed good financial records to prepare various tax forms. But they also need good financial records for their lender. That’s us. And the world of lending has changed in recent times, resulting in a need for better financial records from borrowers.
Many of you already provide excellent financial records to us. But in some cases we are requiring better financial records from borrowers than we have accepted in the past. This does not mean that we are questioning the borrower’s character. It simply reflects changing standards of business, and represents good business practices.
I encourage you to think about your financial records as something more important than merely a requirement for paying taxes or applying for a loan. I hope you use your financial records to help you make decisions about your business. Where can you grow? Where can you cut costs? Where in your business are you making or losing money? A good set of financial records can help you decide how to make necessary and timely adjustments when financial circumstances change, as they have for many Yankee customers in the past 18 months.
We can help you improve the quality of your financial records for the tax authorities, for your lender, and most importantly for yourself. Please call your local branch office for more information if you are interested in our recordkeeping services.
As your lender, what do we require for financial records? It will vary with the situation, and your loan officer can answer specific questions. But a good place to start is with a good year-end balance sheet. We will shortly be mailing year-end balance sheet templates to most borrowers. I encourage you to complete that template promptly and as accurately as possible, and to call your loan officer if you have any questions.
Thank you for your patronage. Best wishes for the holidays and for the New Year.
Sincerely,
George S. Putnam
President and CEO
P.S. Please visit our blog (yankeeaca.blogspot.com) for more discussion about financial records.
As promised, here are additional blog posts on this subject:
Financial Records - Reconciling
Financial Records - Cash vs. Accrual
Financial Records - How good?
Wednesday, December 16, 2009
Batter on Deck, Are You Warming Up?
Kelly Langmaid, Loan Officer from the Newport office, attended a Farm Transfer Planning meeting on December 3, 2009. Also in attendance was Rocki-Lee DeWitt, Yankee Director. The meeting — titled “Batter on Deck, Are You Warming Up?” — was held in the Poulin Grain Conference Room. A discussion was led by Rick Hermonot, dairy consultant for First Pioneer Farm Credit. Rick walked the group through a discussion about transferring the farm from one generation to the next. He first discussed establishing the reason for wanting to transfer and emphasized that the wrong reasons can have significant consequences. He talked about traits of transfers he has seen that have been successful and those that have been failures. He discussed defining where you are now and what steps to take to get to where you want to be, using a list of helpful transfer tools. The meeting and lunch were sponsored by the Vermont Agency of Agriculture.
Monday, December 14, 2009
Building Relationships That Last Generations
The tag line on our new web site is "Building Relationships That Last Generations." Passing the farm from one generation to the next is often a challenge. Two Yankee directors have recently addressed this issue in the press.
'It's in your blood' (4 MB PDF file) — Board Chairperson Paul Gingue and his sons are among the farm families discussed in this article in the Danville North Star Monthly.
Passing on the pasture — Director and Audit Committee Chairperson Rocki-Lee DeWitt says, "Yes, there are still lenders out there with capital to lend for this kind of business." That would be Yankee Farm Credit! This article in Seven Days discusses the FARMS 2+2 Program at VTC and UVM. Yes, the Andrew Wood featured in the article is the same one we wrote about earlier on this blog (see this post).
'It's in your blood' (4 MB PDF file) — Board Chairperson Paul Gingue and his sons are among the farm families discussed in this article in the Danville North Star Monthly.
Passing on the pasture — Director and Audit Committee Chairperson Rocki-Lee DeWitt says, "Yes, there are still lenders out there with capital to lend for this kind of business." That would be Yankee Farm Credit! This article in Seven Days discusses the FARMS 2+2 Program at VTC and UVM. Yes, the Andrew Wood featured in the article is the same one we wrote about earlier on this blog (see this post).
BFP Savorvore Section
Every Friday the Burlington Free Press prints a special section about food called "Savorvore." The December 11th edition featured a story about growing sunflowers in Vermont.
There are also stories about ruffed grouse, wine, ginger liqueurs, burgers (lots of stories!), brussels sprouts (sadly only 1 story), and many other foods. If you like cooking or eating, you might enjoy some of these stories. And some of these stories may be related to some of our non-commodity customers or potential customers. After all, what people eat determines what farmers can sell.
There are also stories about ruffed grouse, wine, ginger liqueurs, burgers (lots of stories!), brussels sprouts (sadly only 1 story), and many other foods. If you like cooking or eating, you might enjoy some of these stories. And some of these stories may be related to some of our non-commodity customers or potential customers. After all, what people eat determines what farmers can sell.
Thursday, December 10, 2009
NEK Dairy Farmers Meeting
The NEK Dairy Farmers Group met on November 24th at Walt Gladstone's farm in Bradford, VT. Loan officer Kelly Langmaid from our Newport office submitted this report:
First meeting of the season, beautiful day, tour of the farm by Walt and son Will. Discussed the history of the farm and how they got where they are today. Discussed current issues in the dairy industry including the low milk price, changes they have implemented over the past year due to the low milk price, and foreign labor.
There where 18 people in attendance at the meeting, including the Gladstones. This meeting also invited any farmers from the Orange County area that have expressed interest in starting a similar group in their area.
Meeting and lunch were sponsored by Intervet Schering Plough. Plastic boots were provided by Genex.
Loan officer Morgan Greenwood Rilling from our White River Jct. office also attended the meeting.
First meeting of the season, beautiful day, tour of the farm by Walt and son Will. Discussed the history of the farm and how they got where they are today. Discussed current issues in the dairy industry including the low milk price, changes they have implemented over the past year due to the low milk price, and foreign labor.
There where 18 people in attendance at the meeting, including the Gladstones. This meeting also invited any farmers from the Orange County area that have expressed interest in starting a similar group in their area.
Meeting and lunch were sponsored by Intervet Schering Plough. Plastic boots were provided by Genex.
Loan officer Morgan Greenwood Rilling from our White River Jct. office also attended the meeting.
Wednesday, November 25, 2009
Agrimark Regional Meeting
Ken Buzzell, Senior Vice President of the Newport office, attended the Agrimark Region 12 regional meeting held at the Applecheek Farm in Hyde Park Vermont. Items of discussion were: why the price of milk fell so low in 2009, Agrimark's Operations and Financial Reports and a presentation on what Cabot was doing to promote its products. Quality awards were presented. Dr. Julie Smith from UVM talked about bio-security.
Tuesday, November 24, 2009
VT Small Business Development Center
Ken Buzzell, Senior Vice President of the Newport office, recently participated in a lender forum at the Center for an Agricultural Economy in Hardwick. The class in business planning was offered by the Vermont Small Business Development Center (VtSBDC) and was held on October 14th. About ten people attended, in addition to staff from VtSBDC and lenders. Sarah Isham from VACC, Sam Buckley from the Vermont Community Loan Fund and Megan Dubois from FSA also participated, in addition to Ken. Each spoke about programs offered by their respective companies or agencies with emphasis on what they were, what type of loans they handled and eligibility. A question and answer session followed.
NE Regional Dairy Challenge
Yankee was well represented recently at the Northeast Regional Dairy Challenge. Loan Officer and Farm Tax Specialist Jean Conklin from our White River Junction branch reports the following:
I served as a judge at the Northeast Regional Dairy Challenge held November 5-7 in Glens Falls, NY. Hosted by SUNY Cobleskill, the Dairy Challenge provided the opportunity for about 120 students from 13 colleges, including 2 in Canada, to visit and evaluate one of 3 host farms in Saratoga County. In teams of 5 they made a presentation to a panel of 5 judges who represented all aspects of the dairy industry. I served as lead judge on a judges team which included Kurt Ruppell from Cargill, Dr. Tim Synder from Renaissance Nutrition, Bob Seglowski, DVM, a vet from southwest Vermont and Glenn Taylor a dairy producer from Cassville, NY. Dr. Charlie Sniffen, a Yankee director, also served as a volunteer judge on another team. The Dairy Challenge is sponsored by the dairy industry. The Farm Credit System, including Yankee Farm Credit, is a big supporter. NH and Vermont were well represented with students from UVM, UNH and VTC attending.
The Northeast Regional Dairy Challenge allows students to prepare for the National Dairy Challenge which will be held in Visalia, California in April 2010. This link is to a local newspaper article which provided coverage of the event. For more information please visit dairychallenge.org.
Jean Conklin also serves on the NAIDC Board of Directors.
I served as a judge at the Northeast Regional Dairy Challenge held November 5-7 in Glens Falls, NY. Hosted by SUNY Cobleskill, the Dairy Challenge provided the opportunity for about 120 students from 13 colleges, including 2 in Canada, to visit and evaluate one of 3 host farms in Saratoga County. In teams of 5 they made a presentation to a panel of 5 judges who represented all aspects of the dairy industry. I served as lead judge on a judges team which included Kurt Ruppell from Cargill, Dr. Tim Synder from Renaissance Nutrition, Bob Seglowski, DVM, a vet from southwest Vermont and Glenn Taylor a dairy producer from Cassville, NY. Dr. Charlie Sniffen, a Yankee director, also served as a volunteer judge on another team. The Dairy Challenge is sponsored by the dairy industry. The Farm Credit System, including Yankee Farm Credit, is a big supporter. NH and Vermont were well represented with students from UVM, UNH and VTC attending.
The Northeast Regional Dairy Challenge allows students to prepare for the National Dairy Challenge which will be held in Visalia, California in April 2010. This link is to a local newspaper article which provided coverage of the event. For more information please visit dairychallenge.org.
Jean Conklin also serves on the NAIDC Board of Directors.
NEK Dairy Farmer Meeting
The next meeting of the NEK Dairy Farmers will be on November 24th from 11am to 2pm at Gladstone's Newmont Farm in Bradford, VT. For more information contact Kelly Langmaid, Yankee Farm Credit, phone 802-334-8050.
On Thursday, December 3rd the Vermont Agency of Agriculture is putting on a meeting titled Batter on Deck, Are You Warming Up? It is a farm business transfer planning meeting. The discussion will be led by Rick Hermonot of First Pioneer Farm Credit. The program will begin with pizza at 12:30, followed by discussion and presentation from 1pm to 3pm. The meeting will be held in the Poulin Grain conference room in Newport. Attendance is free - don't miss this opportunity! Please RSVP by December 1st. For more information or to sign up contact Louise Waterman, VT Agency of Agriculture, phone 802-828-6900.
On Thursday, December 3rd the Vermont Agency of Agriculture is putting on a meeting titled Batter on Deck, Are You Warming Up? It is a farm business transfer planning meeting. The discussion will be led by Rick Hermonot of First Pioneer Farm Credit. The program will begin with pizza at 12:30, followed by discussion and presentation from 1pm to 3pm. The meeting will be held in the Poulin Grain conference room in Newport. Attendance is free - don't miss this opportunity! Please RSVP by December 1st. For more information or to sign up contact Louise Waterman, VT Agency of Agriculture, phone 802-828-6900.
Tuesday, November 10, 2009
Bill Gates on Agriculture
Bill Gates recently gave his first major address on agriculture. He spoke at the World Food Prize Symposium in Iowa last month. The World Food Prize was the vision of Dr. Norman Borlaug.
Bill Gates praised the legacy of Dr. Borlaug and spoke about the need for the next Green Revolution, especially in Africa. He said that agriculture needs to embrace both sustainability and technology, including biotechnology. And he emphasized that "the next Green Revolution must be guided by small-holder farmers." He used the word "small" 21 times in his speech. And he announced grants totaling $120 million to nine institutions around the world from the Bill and Melinda Gates Foundation (press release).
Speaking of Dr. Borlaug, Bill Gates said that "he proved that farming has the power to lift up the lives of the poor."
Click here for more information about the symposium. Here is a link to Bill Gates' speech.
Bill Gates praised the legacy of Dr. Borlaug and spoke about the need for the next Green Revolution, especially in Africa. He said that agriculture needs to embrace both sustainability and technology, including biotechnology. And he emphasized that "the next Green Revolution must be guided by small-holder farmers." He used the word "small" 21 times in his speech. And he announced grants totaling $120 million to nine institutions around the world from the Bill and Melinda Gates Foundation (press release).
Speaking of Dr. Borlaug, Bill Gates said that "he proved that farming has the power to lift up the lives of the poor."
Click here for more information about the symposium. Here is a link to Bill Gates' speech.
Tuesday, November 3, 2009
Director Nominations
It's that time of year again when Yankee's Nominating Committee begins selecting director candidates for the elections in April 2010. There will be three elections, one director seat in each region. Each position is for a three year term. If you would like to be considered for nomination, please contact a member of the Nominating Committee at the numbers below or call your local branch.
Region #1 (Chittenden, Franklin, Grand Isle counties, Vt.; Essex, Clinton counties, N.Y.)
Arnold Mercy 802-326-4200
Wynn Paradee 802-524-4202
Mark Wrisley 518-963-4039
Region #2 (Caledonia, Essex, Lamoille, Orange, Orleans, Washington counties in Vt.; Coos and Grafton counties, N.H.)
Richard Hall 802-229-6342
Richard Martin 802-328-4120
Rendell Tullar 603-353-4860
Region #3 (Addison, Bennington, Rutland, Windham, Windsor counties, Vt.; Cheshire and Sullivan counties, N.H.)
David Ainsworth 802-763-8017
Paul Audy 802-388-2348
Bruce Bascom 603-835-6361
If you have any questions about the purpose or the procedures of the Nominating Committee, please contact John Peters, VP Operations at 800-639-3053.
Region #1 (Chittenden, Franklin, Grand Isle counties, Vt.; Essex, Clinton counties, N.Y.)
Arnold Mercy 802-326-4200
Wynn Paradee 802-524-4202
Mark Wrisley 518-963-4039
Region #2 (Caledonia, Essex, Lamoille, Orange, Orleans, Washington counties in Vt.; Coos and Grafton counties, N.H.)
Richard Hall 802-229-6342
Richard Martin 802-328-4120
Rendell Tullar 603-353-4860
Region #3 (Addison, Bennington, Rutland, Windham, Windsor counties, Vt.; Cheshire and Sullivan counties, N.H.)
David Ainsworth 802-763-8017
Paul Audy 802-388-2348
Bruce Bascom 603-835-6361
If you have any questions about the purpose or the procedures of the Nominating Committee, please contact John Peters, VP Operations at 800-639-3053.
Sunday, September 20, 2009
Risk models - more information
In the previous two posts (here and here) I wrote about mathematical risk models and how they contributed to the financial crisis of 2008. This post contains references to more information.
I recommend the following three books, all written before last year's financial crisis:
Against the Gods: The Remarkable Story of Risk, by Peter Bernstein (1996). This is a very readable history of the mathematics of risk. It is surprising how much of this history is from the study of gambling. This book is the source of the graph of monthly changes in the S&P 500 stock index in this post. The illustration on the cover of the book is Rembrandt’s painting of “The Storm on the Sea of Galilee.” Now there’s an example of risk!
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb (2007). Dr. Taleb was a practitioner of mathematical finance, and gives an inside view of the profession. This book was a New York Times bestseller. Dr. Taleb calls the normal distribution the "GIF": the Great Intellectual Fraud (chapter 15).
Dr. Taleb dedicated The Black Swan to the author of the third book that I recommend: "To Benoit Mandelbrot, a Greek among Romans."
The (mis)Behavior of Markets: A Fractal View of Financial Turbulence, by Benoit Mandelbrot and Richard Hudson (2004). Benoit Mandelbrot is a famous mathematician, known for his work with fractals and the Mandelbrot set. He was not originally known for his work with the mathematics of risk. In a twist of fate that we in Farm Credit can appreciate, Dr. Mandelbrot became interested in the mathematics of risk when studying the volatility of cotton prices. He tells that story in Chapter VIII "The Mystery of Cotton."
Dr. Mandelbrot writes that there is a spectrum of risk, from "mild" to "wild." He says that the normal distribution is sufficient for analyzing mild risk, but that there is no mathematics currently available that is adequate for analyzing wild risk. If a mathematical tool is ever to be developed that will help us analyze wild risk, Dr. Mandelbrot believes that it will be found in fractal mathematics.
Of the three books, The (mis)Behavior of Markets is the most insightful. But The Black Swan has the most delightful quote—on p. 225 Dr. Taleb says: "Likewise, the government-sponsored enterprise Fanny Mae [sic], when I look at their risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events 'unlikely.' " Dr. Taleb wrote that in 2007. Here's what happened in 2008.
I also recommend the following newspaper and magazine articles, all published during and after the financial crisis:
“The 1% Panic,” by L. Gordon Crovitz, Wall Street Journal, 10/13/08 (may require subscription to read). Discusses two of the three books mentioned above.
“The End,” by Michael Lewis, portfolio.com, 11/11/08. No math, but an interesting discussion of people.
“Risk Mismanagement,” by Joe Nocera, New York Times, 1/4/09. Discusses one of the three books mentioned above.
“Recipe for Disaster: The Formula That Killed Wall Street,” by Felix Salmon, Wired Magazine, 2/23/09. Discusses more esoteric math than I have written about on this blog.
If you wish to play around with the normal distribution, there is an excellent Excel file that you can download here. I used this file to generate the graph of the normal distribution in this post.
I recommend the following three books, all written before last year's financial crisis:
Against the Gods: The Remarkable Story of Risk, by Peter Bernstein (1996). This is a very readable history of the mathematics of risk. It is surprising how much of this history is from the study of gambling. This book is the source of the graph of monthly changes in the S&P 500 stock index in this post. The illustration on the cover of the book is Rembrandt’s painting of “The Storm on the Sea of Galilee.” Now there’s an example of risk!
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb (2007). Dr. Taleb was a practitioner of mathematical finance, and gives an inside view of the profession. This book was a New York Times bestseller. Dr. Taleb calls the normal distribution the "GIF": the Great Intellectual Fraud (chapter 15).Dr. Taleb dedicated The Black Swan to the author of the third book that I recommend: "To Benoit Mandelbrot, a Greek among Romans."
The (mis)Behavior of Markets: A Fractal View of Financial Turbulence, by Benoit Mandelbrot and Richard Hudson (2004). Benoit Mandelbrot is a famous mathematician, known for his work with fractals and the Mandelbrot set. He was not originally known for his work with the mathematics of risk. In a twist of fate that we in Farm Credit can appreciate, Dr. Mandelbrot became interested in the mathematics of risk when studying the volatility of cotton prices. He tells that story in Chapter VIII "The Mystery of Cotton." Dr. Mandelbrot writes that there is a spectrum of risk, from "mild" to "wild." He says that the normal distribution is sufficient for analyzing mild risk, but that there is no mathematics currently available that is adequate for analyzing wild risk. If a mathematical tool is ever to be developed that will help us analyze wild risk, Dr. Mandelbrot believes that it will be found in fractal mathematics.
Of the three books, The (mis)Behavior of Markets is the most insightful. But The Black Swan has the most delightful quote—on p. 225 Dr. Taleb says: "Likewise, the government-sponsored enterprise Fanny Mae [sic], when I look at their risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events 'unlikely.' " Dr. Taleb wrote that in 2007. Here's what happened in 2008.
I also recommend the following newspaper and magazine articles, all published during and after the financial crisis:
“The 1% Panic,” by L. Gordon Crovitz, Wall Street Journal, 10/13/08 (may require subscription to read). Discusses two of the three books mentioned above.
“The End,” by Michael Lewis, portfolio.com, 11/11/08. No math, but an interesting discussion of people.
“Risk Mismanagement,” by Joe Nocera, New York Times, 1/4/09. Discusses one of the three books mentioned above.
“Recipe for Disaster: The Formula That Killed Wall Street,” by Felix Salmon, Wired Magazine, 2/23/09. Discusses more esoteric math than I have written about on this blog.
If you wish to play around with the normal distribution, there is an excellent Excel file that you can download here. I used this file to generate the graph of the normal distribution in this post.
Risk models - some math
In the previous post I wrote about how the failure of mathematical risk models contributed to the financial crisis of 2008. That post did not include any math. This post is about some of the math.
Modern financial theory purports to be able to calculate probabilities associated with risk with a high degree of precision. There is much more to modern financial theory than I understand, but it is primarily built on the foundation of the normal distribution, also called the bell curve:
The normal distribution is a wonderful piece of mathematics. If you know only two numbers — the mean and the standard deviation — you can calculate all kinds of probabilities with precision.
You may have encountered the normal distribution in high school or college. Even if you didn't study it formally, you may have heard about grading tests "on a curve." This is the curve! The normal distribution describes many phenomena in our world, including the distribution of test scores. For example, the Scholastic Aptitude Test (SAT) is graded according to the normal distribution. Scores on the SAT are calibrated to have a mean of 500 and a standard deviation of 100. There is only a 2.3% probability of scoring 700 or higher (two standard deviations above the mean). That is the kind of calculation that is possible with the normal distribution.
The basic insight of modern financial theory is that changes in the price of an asset (i.e., the volatility of that price) can be modeled using the normal distribution. There will be many small changes clustered around the mean. There will be fewer large changes, far from the mean.
This works a lot of the time. The problem is that it doesn't work all the time. Below is an example of when it doesn't work. This graph shows monthly changes in the S&P 500 stock index (source p. 147):
The changes far from the mean (what are called the "tails" of the distribution) do NOT decrease to virtually nothing as in the normal distribution; they actually increase! A mathematical risk model based on the normal distribution will significantly underestimate the amount of risk in the world, especially in times of high volatility—i.e., in the tails.
So why do financial institutions use mathematical risk models that are ultimately based on the normal distribution? Two reasons. First, it does work well a lot of the time. And second, we don't have any better tools in our mathematical toolbox. There simply isn't any mathematics available that adequately describes risk in times of high volatility, like last fall.
For a list of references with more information, see this post.
Modern financial theory purports to be able to calculate probabilities associated with risk with a high degree of precision. There is much more to modern financial theory than I understand, but it is primarily built on the foundation of the normal distribution, also called the bell curve:
The normal distribution is a wonderful piece of mathematics. If you know only two numbers — the mean and the standard deviation — you can calculate all kinds of probabilities with precision.You may have encountered the normal distribution in high school or college. Even if you didn't study it formally, you may have heard about grading tests "on a curve." This is the curve! The normal distribution describes many phenomena in our world, including the distribution of test scores. For example, the Scholastic Aptitude Test (SAT) is graded according to the normal distribution. Scores on the SAT are calibrated to have a mean of 500 and a standard deviation of 100. There is only a 2.3% probability of scoring 700 or higher (two standard deviations above the mean). That is the kind of calculation that is possible with the normal distribution.
The basic insight of modern financial theory is that changes in the price of an asset (i.e., the volatility of that price) can be modeled using the normal distribution. There will be many small changes clustered around the mean. There will be fewer large changes, far from the mean.
This works a lot of the time. The problem is that it doesn't work all the time. Below is an example of when it doesn't work. This graph shows monthly changes in the S&P 500 stock index (source p. 147):
The changes far from the mean (what are called the "tails" of the distribution) do NOT decrease to virtually nothing as in the normal distribution; they actually increase! A mathematical risk model based on the normal distribution will significantly underestimate the amount of risk in the world, especially in times of high volatility—i.e., in the tails.So why do financial institutions use mathematical risk models that are ultimately based on the normal distribution? Two reasons. First, it does work well a lot of the time. And second, we don't have any better tools in our mathematical toolbox. There simply isn't any mathematics available that adequately describes risk in times of high volatility, like last fall.
For a list of references with more information, see this post.
What went wrong?
The following column appears in the Fall 2009 issue of Financial Partner magazine:
The Financial Crisis of 2008: What went wrong?
What caused last fall’s financial crisis? What lessons can we learn?
In this column, I discuss one of many contributing factors: The mathematical models that financial institutions used to manage risk were not up to the task. Don’t worry, this column isn’t about mathematics. It’s about the risks of thinking we know more than we actually do.
Some things in our world can be calculated with precision and some cannot. Farmers know this intuitively. We can calculate exactly what time of day and where on the horizon the sun will rise three weeks from next Tuesday. (I use “we” loosely. I mean that someone in our society is capable of such a calculation, and the rest of us can look it up on the Internet.) But we cannot calculate with any certainty at all whether that sunrise will be visible or obscured by a cloud.
Can financial risk be precisely calculated like the motions of heavenly bodies? Or is it as unpredictable as the weather?
A typical way to measure financial risk is in terms of the volatility of the price of something. The “something” can be almost anything that can be owned, such as stocks, bonds, commodities or real estate. Or it can be a derivative financial instrument based on such things as stocks, bonds, commodities or real estate. Trillions of dollars of such assets are traded regularly. One can observe the prices at which they trade and measure changes (or volatility) in those prices.
The next step is to estimate the probabilities of future price changes. There is a high probability of small price changes which represent little risk. Conversely, large price changes represent significant risk but occur infrequently.
We can calculate these probabilities using modern financial theory. (Again, I use “we” loosely.) The mathematics involved is well beyond high school algebra, so Wall Street employed an army of mathematics PhDs.
Even those of us who don’t understand higher mathematics often make investments based on information that incorporates the mathematics of modern financial theory, such as public ratings on bonds and other debt instruments. The result is that investors made trillions of dollars of investment decisions thinking that they understood the risk in their portfolios.
Alas, events proved otherwise. Many investments were far riskier than the mathematical models predicted. Large price movements occurred more frequently than expected and the theory underpredicted the likelihood of extreme events. As a result, several large financial institutions suffered unexpected losses that they couldn’t absorb, resulting in failure. And this cascaded through the financial system, causing more failures.
What are the lessons?
Should we tar and feather the mathematicians? Well, no. Mathematics is useful and successfully explains significant portions of our world. But we got ahead of ourselves in thinking that we fully understood the mathematics of risk. One very costly lesson learned is that we should be more cautious when thinking that we understand our world. Another lesson is that many financial institutions should hold more capital. The financial institutions that failed thought they had sufficient capital based on their mathematical models. Unfortunately, they were wrong.
At June 30, 2009, Yankee’s permanent capital ratio was 18.2 percent. While no amount of capital completely guarantees against all events, you should take comfort that this level is considerably higher than most other financial institutions, both inside and outside the Farm Credit System.
More discussion
The following two posts on this blog are also on this topic:
Risk models - some math
Risk models - more information
The Financial Crisis of 2008: What went wrong?
What caused last fall’s financial crisis? What lessons can we learn?
In this column, I discuss one of many contributing factors: The mathematical models that financial institutions used to manage risk were not up to the task. Don’t worry, this column isn’t about mathematics. It’s about the risks of thinking we know more than we actually do.
Some things in our world can be calculated with precision and some cannot. Farmers know this intuitively. We can calculate exactly what time of day and where on the horizon the sun will rise three weeks from next Tuesday. (I use “we” loosely. I mean that someone in our society is capable of such a calculation, and the rest of us can look it up on the Internet.) But we cannot calculate with any certainty at all whether that sunrise will be visible or obscured by a cloud.
Can financial risk be precisely calculated like the motions of heavenly bodies? Or is it as unpredictable as the weather?
A typical way to measure financial risk is in terms of the volatility of the price of something. The “something” can be almost anything that can be owned, such as stocks, bonds, commodities or real estate. Or it can be a derivative financial instrument based on such things as stocks, bonds, commodities or real estate. Trillions of dollars of such assets are traded regularly. One can observe the prices at which they trade and measure changes (or volatility) in those prices.
The next step is to estimate the probabilities of future price changes. There is a high probability of small price changes which represent little risk. Conversely, large price changes represent significant risk but occur infrequently.
We can calculate these probabilities using modern financial theory. (Again, I use “we” loosely.) The mathematics involved is well beyond high school algebra, so Wall Street employed an army of mathematics PhDs.
Even those of us who don’t understand higher mathematics often make investments based on information that incorporates the mathematics of modern financial theory, such as public ratings on bonds and other debt instruments. The result is that investors made trillions of dollars of investment decisions thinking that they understood the risk in their portfolios.
Alas, events proved otherwise. Many investments were far riskier than the mathematical models predicted. Large price movements occurred more frequently than expected and the theory underpredicted the likelihood of extreme events. As a result, several large financial institutions suffered unexpected losses that they couldn’t absorb, resulting in failure. And this cascaded through the financial system, causing more failures.
What are the lessons?
Should we tar and feather the mathematicians? Well, no. Mathematics is useful and successfully explains significant portions of our world. But we got ahead of ourselves in thinking that we fully understood the mathematics of risk. One very costly lesson learned is that we should be more cautious when thinking that we understand our world. Another lesson is that many financial institutions should hold more capital. The financial institutions that failed thought they had sufficient capital based on their mathematical models. Unfortunately, they were wrong.
At June 30, 2009, Yankee’s permanent capital ratio was 18.2 percent. While no amount of capital completely guarantees against all events, you should take comfort that this level is considerably higher than most other financial institutions, both inside and outside the Farm Credit System.
More discussion
The following two posts on this blog are also on this topic:
Risk models - some math
Risk models - more information
Saturday, September 19, 2009
Senate Judiciary Committee Hearing
Senator Patrick Leahy held a hearing of the Senate Judiciary Committee in St. Albans today: “Crisis on the Farm: The State of Competition and Prospects for Sustainability in the Northeast Dairy Industry.” Senator Bernie Sanders also participated:
Senator Leahy dedicated the hearing to Harold Howrigan.
Much of the testimony concerned Dean Foods. Senator Sanders stated that Dean Foods held 70% of the fluid milk market in New England, and 80% or more in many other states.
The first panel of witnesses included Christine Varney, Assistant Attorney General for Antitrust, and Dr. Joseph Glauber, the Chief Economist for USDA. Ms. Varney said that the Dept. of Justice and the Dept. of Agriculture will be holding a series of joint workshops in 2010 to explore issues relating to competition in agriculture, including the dairy industry. (DOJ news release)
The second panel of witnesses included three Vermont dairy farmers (Bill Rowell, Paul Doton and Travis Forgues) and Bob Wellington, economist for Agri-Mark:
The following graph of dairy farm income and expense was on display at the hearing:
One of the policy issues discussed was the Dairy Price Stabilization Program (aka Growth Management Plan) proposed by Dairy Farmers Working Together, the Milk Producers Council of California and the Holstein Association USA.
The hearing was well attended, with many farmers, politicians and media present. Click here for links to all of the statements and testimony.
UPDATE 9/20/09: Burlington Free Press coverage of the hearing:
Milk processors under fire
Dairy industry antitrust issues not new
photo gallery
Roger Allbee's letter to the editor about the hearing
Anne Galloway's coverage of the hearing on vtdigger.org:
Antitrust division to probe complaints about Dean Foods’ alleged monopolistic practices
(includes YouTube video of some of the testimony)
UPDATE 9/21/09: Wall Street Journal coverage of the hearing (subscription may be required to read):
Top Antitrust Enforcer Supports More Scrutiny of Dairy Industry
Kylie Quesnel is quoted.
Senator Leahy dedicated the hearing to Harold Howrigan.Much of the testimony concerned Dean Foods. Senator Sanders stated that Dean Foods held 70% of the fluid milk market in New England, and 80% or more in many other states.
The first panel of witnesses included Christine Varney, Assistant Attorney General for Antitrust, and Dr. Joseph Glauber, the Chief Economist for USDA. Ms. Varney said that the Dept. of Justice and the Dept. of Agriculture will be holding a series of joint workshops in 2010 to explore issues relating to competition in agriculture, including the dairy industry. (DOJ news release)
The second panel of witnesses included three Vermont dairy farmers (Bill Rowell, Paul Doton and Travis Forgues) and Bob Wellington, economist for Agri-Mark:
The following graph of dairy farm income and expense was on display at the hearing:
One of the policy issues discussed was the Dairy Price Stabilization Program (aka Growth Management Plan) proposed by Dairy Farmers Working Together, the Milk Producers Council of California and the Holstein Association USA.The hearing was well attended, with many farmers, politicians and media present. Click here for links to all of the statements and testimony.
UPDATE 9/20/09: Burlington Free Press coverage of the hearing:
Milk processors under fire
Dairy industry antitrust issues not new
photo gallery
Roger Allbee's letter to the editor about the hearing
Anne Galloway's coverage of the hearing on vtdigger.org:
Antitrust division to probe complaints about Dean Foods’ alleged monopolistic practices
(includes YouTube video of some of the testimony)
UPDATE 9/21/09: Wall Street Journal coverage of the hearing (subscription may be required to read):
Top Antitrust Enforcer Supports More Scrutiny of Dairy Industry
Kylie Quesnel is quoted.
Friday, September 18, 2009
Dairy Industry News
Links to recent news items about the dairy industry (subscription may be required for Wall Street Journal links):
EU farmers in white heat over milk prices - Yahoo!News/AP 9/16/09
Farmers Want Industry Probe - WSJ 9/17/09
Hate Calculus? Try Counting Cow Carbon - WSJ 9/18/09
Senate Judiciary Committee hearing in St. Albans 9/19/09
EU farmers in white heat over milk prices - Yahoo!News/AP 9/16/09
Farmers Want Industry Probe - WSJ 9/17/09
Hate Calculus? Try Counting Cow Carbon - WSJ 9/18/09
Senate Judiciary Committee hearing in St. Albans 9/19/09
Thursday, September 10, 2009
Vermont Ag Hall of Fame
Four individuals were inducted into the Vermont Agricultural Hall of Fame on Sept. 2nd at the Champlain Valley Fair:
John Finley (deceased) — former Deputy Commissioner of Agriculture
Millicent Rooney and all of the Rooney and James families — Monument Farms
Everett Harris (deceased) — for his work with FFA
Dr. Henry Atherton — Professor of Animal Science Emeritus at UVM
Congratulations to the 2009 inductees to the Vermont Agricultural Hall of Fame!
This was the 7th annual induction ceremony. Here are all the inductees from 2003-2009 (click to enlarge):
UPDATE: The Champlain Valley Exposition web site has a page about the VT Ag Hall of Fame.
John Finley (deceased) — former Deputy Commissioner of Agriculture
Millicent Rooney and all of the Rooney and James families — Monument Farms
Everett Harris (deceased) — for his work with FFA
Dr. Henry Atherton — Professor of Animal Science Emeritus at UVM
Congratulations to the 2009 inductees to the Vermont Agricultural Hall of Fame!
This was the 7th annual induction ceremony. Here are all the inductees from 2003-2009 (click to enlarge):
UPDATE: The Champlain Valley Exposition web site has a page about the VT Ag Hall of Fame.
Tuesday, September 8, 2009
Musings about "This Milk Problem"
Federal milk marketing orders exist under the authority of the Agricultural Marketing Agreement Act of 1937. The current northeast order came into effect in the late 1930s after farmers voted for it in a referendum. In 1937 UVM Extension published a booklet titled "This Milk Problem" by Harry R. Varney to educate farmers so that they could make an informed vote. (Click on the photo to see a larger view.)The booklet gives a good overview and history of the dairy industry in Vermont as of 1937. Times on the farm were difficult in the 1930s, as they are now. It is interesting to compare and contrast the situation in the 1930s with today. If any reader of this blog would like a copy of this booklet please contact Ruchel St. Hilaire for a paper copy.
The best minds in the northeast have been thinking about "this milk problem" for over 70 years. (Click here for a recent example.) It's still a problem, perhaps now more so than at any time since the 1930s. I certainly do not have the answer to the problem. But that doesn't mean I don't think about it. I have spent most of my life around dairy farmers, and yet there are many things about the marketing of milk that I don't understand. While I don't have answers, I certainly have questions. Please note that the questions below are only "George" questions. They are not "Yankee Farm Credit" questions.
I often hear it said that "the system is broken." I wonder if this is true. It seems to me that the system of federal milk marketing orders was designed to make sure that all farmers receive "equal" prices, adjusted for such things as milk composition and distance to market. No matter how good a job a farmer or his/her cooperative does in marketing milk, all farmers receive the "blend" price. The system was designed to make sure that all farmers benefit when market prices are high. And of course all farmers suffer when market prices are low. Isn't the system working exactly as designed? Maybe we should ask the question: Is it still the right system? Does the current system itself inhibit innovative thinking about marketing?
I also often hear it said that proximity to the Boston and New York fluid markets is a strength of the northeast dairy industry. The booklet "This Milk Problem" discusses the importance of the Boston fluid market in some detail. This was certainly a strength at one time. I wonder if it is still a strength or if it has become a weakness. Perhaps a mortal weakness. Does the northeast dairy industry's strong attachment to fluid markets inhibit innovative thinking when it comes to marketing?
A few observations lead me to wonder about this. First, it was not always this way. Before 1900 fluid milk shipments to Boston were not significant because there was no easy way to transport milk. Butter and cheese production were more important. In the 1890s the largest butter factory in the world was in St. Albans, Vt. ("This Milk Problem" p. 8) If fluid markets were not always king in the past, will they necessarily always be king in the future? Second, New Zealand did not become a world power in the dairy industry by selling fluid milk. They found a way to be profitable with other dairy products. Third, the parts of the northeast dairy industry that have become famous and (often) successful in recent years are not selling fluid milk. Examples: Ben & Jerry's, Stonyfield, Cabot, Jasper Hill and the many onfarm cheesemakers. Whether through old technology (cheesemaking) or new technology (ultrafiltration) maybe the value in milk is in the components. Does the current marketing system allow this value to be fully realized?
One last set of questions. I often hear it said that one goal of food marketing policy is to provide cheap food for consumers. I ask—why? The goal of a marketing policy should be to create and capture value. The organic sector has figured that out, and kudos to them for doing so. Perhaps the conventional sector could learn something about marketing from the organic sector. A question I would ask when formulating a marketing policy is: How does a policy of cheap food help farmers create and capture value?
Well, I'd better stop asking questions, and get back to my day job. I am only a banker. I leave the job of finding markets for the products that farmers wish to produce where it belongs: with the farmers themselves and their processing/marketing co-ops.
Friday, August 21, 2009
Heart Stories
There are both heartbreaking and heartwarming stories occurring on farms in Yankee's territory these days.
An example of heartbreaking:
Politics of the Plate: Selling the Farm
One cannot help but identify with the Borland family in this well-written and moving article. That is especially true for those of us — and this includes many readers of this blog — who have similar stories in our own families, of farming for generations in Vermont or New Hampshire or New York. We understand this story from the inside.
An example of heartwarming:
Inaugural Vt. Cheesemakers Festival to be held Sunday
Most of us have little in common with the Druart family. For starters, most of us did not grow up in France. And yet one cannot help but be inspired by their story, which continues this weekend with the first ever Vermont Cheesemakers Festival at Shelburne Farms. This article is from today's Burlington Free Press, the "Savorvore" section which appears every Friday. I encourage you to read the paper edition today if you can. There are many heartwarming food stories in this section, including profiles of the Dancing Cow Farm and the Champlain Valley Creamery. All of this will be especially interesting to those Yankee employees, directors and guests who were on the farm tour last month at Jasper Hill Farm.
The stories above are an example of what the Austrian economist Joseph Schumpeter called "creative destruction." Ah, leave it to an economist to strip out the emotion and "explain" everything. But don't dismiss the economists' view of the world just because it leaves out emotion. It takes both emotion and reason to understand the world.
These are depressing times on many farms. Try to keep in mind that the future does not hold just peril, it also holds promise. Have courage.
An example of heartbreaking:
Politics of the Plate: Selling the Farm
One cannot help but identify with the Borland family in this well-written and moving article. That is especially true for those of us — and this includes many readers of this blog — who have similar stories in our own families, of farming for generations in Vermont or New Hampshire or New York. We understand this story from the inside.
An example of heartwarming:
Inaugural Vt. Cheesemakers Festival to be held Sunday
Most of us have little in common with the Druart family. For starters, most of us did not grow up in France. And yet one cannot help but be inspired by their story, which continues this weekend with the first ever Vermont Cheesemakers Festival at Shelburne Farms. This article is from today's Burlington Free Press, the "Savorvore" section which appears every Friday. I encourage you to read the paper edition today if you can. There are many heartwarming food stories in this section, including profiles of the Dancing Cow Farm and the Champlain Valley Creamery. All of this will be especially interesting to those Yankee employees, directors and guests who were on the farm tour last month at Jasper Hill Farm.
The stories above are an example of what the Austrian economist Joseph Schumpeter called "creative destruction." Ah, leave it to an economist to strip out the emotion and "explain" everything. But don't dismiss the economists' view of the world just because it leaves out emotion. It takes both emotion and reason to understand the world.
These are depressing times on many farms. Try to keep in mind that the future does not hold just peril, it also holds promise. Have courage.
Wednesday, August 19, 2009
Empire Field Days
The Empire Field Days were held at the Rodman Lott & Sons Farm in Seneca Falls, NY. George Birkett attended Thursday, August 13th and had the following to report: It was an extremely hot and muggy day, but that sure beat the rain! Personally, I though the highlight of the show was the "big iron" demonstrations. A compilation of "whopper choppers" from John Deere, Claas, New Holland, and Kuhn, were on site for the demonstration. There seems to be something enticing about 600+ HP machines gently humming through the rows of corn. According to fellow Farm Credit employees with prior years experience, the attendance at the show was down slightly, inclement weather the two prior days may have been largely responsible. The farmers I spoke with seemed to be in good spirits, despite the current economic trend. All-in-all I would say the show was a success. The biggest hit with the crowd at our booth was definitely the rolly tractor, much interest was displayed for the miniature Claas. I look forward to the next time I have the opportunity to go see a field event of that magnitude.
Friday, July 31, 2009
Norman Borlaug
One of my heroes is Norman Borlaug. Dr. Borlaug had a column in today's Wall Street Journal: "Farmers Can Feed the World."
Norman Borlaug is called by some the father of the Green Revolution of the 1960s, and credited by some with saving a billion lives. According to Wikipedia, he is one of only five people in history to have been awarded the Nobel Peace Prize (1970) and the Presidential Medal of Freedom (by President Gerald Ford) and the Congressional Gold Medal (2007).
In 2000 the Nobel Institute invited Dr. Borlaug to give a special 30th Anniversary Lecture. This speech is long but interesting if you care about feeding the world.
Gregg Easterbrook wrote a long column about Dr. Borlaug in The Atlantic Monthly in 1997: Forgotten Benefactor of Humanity.
UPDATE: Dr. Borlaug died on 9/12/09 at the age of 95. NYT obituary. WSJ column by Gregg Easterbrook.
"Civilization as we know it could not have evolved, nor can it survive, without an adequate food supply."But not to worry:
"Given the right tools, farmers have shown an uncanny ability to feed themselves and others, and to ignite the economic engine that will reverse the cycle of chronic poverty."(I might add that in addition to the right tools, farmers also need the right incentives. Like everyone else, farmers do not relish working for nothing.)
Norman Borlaug is called by some the father of the Green Revolution of the 1960s, and credited by some with saving a billion lives. According to Wikipedia, he is one of only five people in history to have been awarded the Nobel Peace Prize (1970) and the Presidential Medal of Freedom (by President Gerald Ford) and the Congressional Gold Medal (2007).
In 2000 the Nobel Institute invited Dr. Borlaug to give a special 30th Anniversary Lecture. This speech is long but interesting if you care about feeding the world.
Gregg Easterbrook wrote a long column about Dr. Borlaug in The Atlantic Monthly in 1997: Forgotten Benefactor of Humanity.
UPDATE: Dr. Borlaug died on 9/12/09 at the age of 95. NYT obituary. WSJ column by Gregg Easterbrook.
Monday, July 20, 2009
Farm Tour
Yankee Farm Credit employees and directors toured several farms in the Northeast Kingdom on Friday, July 17. Also joining us were Lori Staib and Tim Demars of FPI and Bob Egerton and Elizabeth Borella of CoBank. A big thank you to our hosts, and to everyone in the Newport office for organizing this tour. It was an interesting day, with a variety of agriculture.
Monday, June 29, 2009
Congressional Visits
On June 24th Yankee visited Congressional offices in Washington, DC. Participating were: Chairperson Paul Gingue, former Chairperson Paul Doton, Bob Smith and me. Bob Smith is a senior vice president of First Pioneer Farm Credit who assists several associations with government relations.
We visited people in eight Congressional offices:
Earlier this month President Obama released a proposal for Financial Regulatory Reform. This plan proposes to reform the regulation of financial institutions, but leaves for future consideration any action relating to the GSEs. Farm Credit is not mentioned. We conveyed the message that as this proposal evolves, we believe that Farm Credit can best continue to fulfill our Congressional mandate and meet the needs of our customers if we remain a system of farmer-owned cooperatives, under the regulatory supervision of the Farm Credit Administration and with Congressional oversight remaining with the House and Senate Agriculture Committees.
We also discussed farm labor issues and the dairy industry. We provided each office with a copy of the Northeast Dairy Farm Summary published last month.
UPDATE: Received this photo from Rep. Welch's office:
We visited people in eight Congressional offices:
- Jim Gauthier in Sen. Judd Gregg's office (and briefly met Sen. Gregg)
- Todd Schulte in Rep. Scott Murphy's office
- Sara Dewey in Sen. Jeanne Shaheen's office
- Sen. Bernie Sanders and Janko Mitric
- Rep. Peter Welch and Jake Oster
- Sarah Levin in Rep. Paul Hodes' office
- Adam Robbins in Rep. Carol Shea-Porter's office
- Brian Baenig in Sen. Patrick Leahy's office
Earlier this month President Obama released a proposal for Financial Regulatory Reform. This plan proposes to reform the regulation of financial institutions, but leaves for future consideration any action relating to the GSEs. Farm Credit is not mentioned. We conveyed the message that as this proposal evolves, we believe that Farm Credit can best continue to fulfill our Congressional mandate and meet the needs of our customers if we remain a system of farmer-owned cooperatives, under the regulatory supervision of the Farm Credit Administration and with Congressional oversight remaining with the House and Senate Agriculture Committees.
We also discussed farm labor issues and the dairy industry. We provided each office with a copy of the Northeast Dairy Farm Summary published last month.
UPDATE: Received this photo from Rep. Welch's office:
Monday, June 22, 2009
Growth Management Plan
A "Growth Management Plan" for the dairy industry has been proposed by the Milk Producers Council of California. Here's a brief overview of the plan.
All dairy farms already track their milk production. Each quarter, production would be compared to the same quarter the previous year. If production increased by more than the "Allowable Growth," the farmer would pay a "Market Access Fee" on the farm's entire production that quarter. The total sum of money collected from the Market Access Fees would be distributed to those farms whose production did not exceed the Allowable Growth.
The Allowable Growth and the Market Access Fee would be determined from time to time by the U.S. Secretary of Agriculture in consultation with an advisory board. The Milk Producers Council estimates that Allowable Growth would be 1.5-3% and that the Market Access Fee would be $0.50-0.75/cwt.
The GMP is not intended to increase average milk prices over the industry cycle. It is intended to make the cycle less volatile.
This plan, or a close variation of it, is supported by Dairy Farmers Working Together and the Holstein Association USA (they both call it the Dairy Price Stabilization Plan). The plan calls for compulsory participation by all dairy farmers in the U.S., and therefore would require Congressional action to implement.
Rob Vandenheuvel, General Manager of the Milk Producers Council, explained the GMP at the NEDLT meeting earlier this month. Click here for his presentation. I found interesting Rob's comments on slide 13 ("this is not a supply management program") and slide 18 ("the GMP would actually get us CLOSER to real market signals").
The GMP was also discussed at the Northeast Dairy Summit in March. The plan has been analyzed by Cornell University (click here).
All dairy farms already track their milk production. Each quarter, production would be compared to the same quarter the previous year. If production increased by more than the "Allowable Growth," the farmer would pay a "Market Access Fee" on the farm's entire production that quarter. The total sum of money collected from the Market Access Fees would be distributed to those farms whose production did not exceed the Allowable Growth.
The Allowable Growth and the Market Access Fee would be determined from time to time by the U.S. Secretary of Agriculture in consultation with an advisory board. The Milk Producers Council estimates that Allowable Growth would be 1.5-3% and that the Market Access Fee would be $0.50-0.75/cwt.
The GMP is not intended to increase average milk prices over the industry cycle. It is intended to make the cycle less volatile.
This plan, or a close variation of it, is supported by Dairy Farmers Working Together and the Holstein Association USA (they both call it the Dairy Price Stabilization Plan). The plan calls for compulsory participation by all dairy farmers in the U.S., and therefore would require Congressional action to implement.
Rob Vandenheuvel, General Manager of the Milk Producers Council, explained the GMP at the NEDLT meeting earlier this month. Click here for his presentation. I found interesting Rob's comments on slide 13 ("this is not a supply management program") and slide 18 ("the GMP would actually get us CLOSER to real market signals").
The GMP was also discussed at the Northeast Dairy Summit in March. The plan has been analyzed by Cornell University (click here).
NEDLT Meeting
The Northeast Dairy Leadership Team met in Binghamton, NY on June 2-3.
One of the presentations was by Dr. Scott Brown of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. Dr. Brown presented an analysis of the effect of the CWT program. He estimated that, not counting the CWT herd retirement currently in process, CWT increased the price paid to dairy farmers by an average of approximately $0.66/cwt each year for the period 2004-2008, and he estimated the effect for 2009 to be $0.71/cwt. Some in the audience questioned CWT's continuing effectiveness because markets seem to have adjusted. In other words, the program seems to have a greater effect when it is a surprise. Are farmers stocking up on heifers because they now expect CWT? Click here for Dr. Brown's full presentation.
Another presentation was by Andrei Mikhalevsky of Fonterra, the New Zealand dairy cooperative. Fonterra does business in 140 countries, and so has a good view of world dairy markets. About a year ago, Fonterra launched globalDairyTrade, an Internet-based electronic trading system for commodity dairy products. Currently whole milk powder (WMP) is traded. The Latest Results page shows the results of the latest auction, as well as graphs of WMP prices for the past few years. The surge in world prices in 2007 into early 2008 is obvious. Mr. Mikhalevsky said that Fonterra does not expect world dairy prices to recover before next spring. He also noted that the U.S. and New Zealand would make good partners in the world dairy markets, because their flush seasons come at different times of the year (since one is in the Northern Hemisphere and one is in the Southern Hemisphere). Fonterra sells more than just commodity dairy products; one item that surprised some members of the audience was that Fonterra has developed premium markets in Asia for colostrum. Click here for Mr. Mikhalevsky's full presentation.
Rob Vandenheuvel, General Manager of the Milk Producers Council in Chino, California, spoke to the group about the Growth Management Plan. (Mr. Vandenheuvel was also a presenter at the Northeast Dairy Summit in March.) The GMP deserves a post of its own.
Click here for all of the presentations at the June NEDLT meeting.
One of the presentations was by Dr. Scott Brown of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. Dr. Brown presented an analysis of the effect of the CWT program. He estimated that, not counting the CWT herd retirement currently in process, CWT increased the price paid to dairy farmers by an average of approximately $0.66/cwt each year for the period 2004-2008, and he estimated the effect for 2009 to be $0.71/cwt. Some in the audience questioned CWT's continuing effectiveness because markets seem to have adjusted. In other words, the program seems to have a greater effect when it is a surprise. Are farmers stocking up on heifers because they now expect CWT? Click here for Dr. Brown's full presentation.
Another presentation was by Andrei Mikhalevsky of Fonterra, the New Zealand dairy cooperative. Fonterra does business in 140 countries, and so has a good view of world dairy markets. About a year ago, Fonterra launched globalDairyTrade, an Internet-based electronic trading system for commodity dairy products. Currently whole milk powder (WMP) is traded. The Latest Results page shows the results of the latest auction, as well as graphs of WMP prices for the past few years. The surge in world prices in 2007 into early 2008 is obvious. Mr. Mikhalevsky said that Fonterra does not expect world dairy prices to recover before next spring. He also noted that the U.S. and New Zealand would make good partners in the world dairy markets, because their flush seasons come at different times of the year (since one is in the Northern Hemisphere and one is in the Southern Hemisphere). Fonterra sells more than just commodity dairy products; one item that surprised some members of the audience was that Fonterra has developed premium markets in Asia for colostrum. Click here for Mr. Mikhalevsky's full presentation.
Rob Vandenheuvel, General Manager of the Milk Producers Council in Chino, California, spoke to the group about the Growth Management Plan. (Mr. Vandenheuvel was also a presenter at the Northeast Dairy Summit in March.) The GMP deserves a post of its own.
Click here for all of the presentations at the June NEDLT meeting.
Thursday, June 11, 2009
Cars for sale
Yankee Farm Credit has a few company cars for sale. For more information on the vehicles, please contact Ruchel at 800-639-3053.
$10,000 - 2006 Honda Element EX-P sport Utility, red, 101,500
$9,500 - 2007 Toyota Camry LE, 4 cyl. 88,900 miles, light blue
$7,500 - 2005 Toyota Camry LE, V6, 99,500 miles,red/maroon
Update
We now have the following auto for sale as well:
$7,000 - 2005 Honda Civic LX, 74,000 miles, black
$10,000 - 2006 Honda Element EX-P sport Utility, red, 101,500
$9,500 - 2007 Toyota Camry LE, 4 cyl. 88,900 miles, light blue
$7,500 - 2005 Toyota Camry LE, V6, 99,500 miles,red/maroon
Update
We now have the following auto for sale as well:
$7,000 - 2005 Honda Civic LX, 74,000 miles, black
Wednesday, June 10, 2009
Need to talk to someone about financial stress?
The current recession is placing a lot of financial stress on everyone. Need someone to talk to? Your Yankee Farm Credit loan officer or financial services representative is a resource, of course. Here are additional resources:
Vermont: A Farmers Hotline is available at 800-281-6977 (Rutland), 800-639-2130 (St. Albans) or 800-545-8920 (St. Johnsbury). Click here for more information, including additional programs and individuals you can contact. You can also call 211 (click here for info about Vermont 211).
New York: Call NYFarmNet at 800-547-3276. Click here for more information. You can also call 211 (click here for info about New York 211).
New Hampshire: Call 211, sponsored by the United Ways of NH (click here for info about New Hampshire 211).
UPDATE 8/12/09: Tragically there have been three farmer suicides in Maine recently. The University of Maine Cooperative Extension has created a web page of online resources for Helping Farmers Cope with Stress.
UPDATE 3/05/10: The Vermont Farm First Program is now available to Vermont dairy farmers. It is an Employee Assistance Program (EAP) for dairy farmers.
Vermont: A Farmers Hotline is available at 800-281-6977 (Rutland), 800-639-2130 (St. Albans) or 800-545-8920 (St. Johnsbury). Click here for more information, including additional programs and individuals you can contact. You can also call 211 (click here for info about Vermont 211).
New York: Call NYFarmNet at 800-547-3276. Click here for more information. You can also call 211 (click here for info about New York 211).
New Hampshire: Call 211, sponsored by the United Ways of NH (click here for info about New Hampshire 211).
UPDATE 8/12/09: Tragically there have been three farmer suicides in Maine recently. The University of Maine Cooperative Extension has created a web page of online resources for Helping Farmers Cope with Stress.
UPDATE 3/05/10: The Vermont Farm First Program is now available to Vermont dairy farmers. It is an Employee Assistance Program (EAP) for dairy farmers.
Tuesday, June 9, 2009
Dairy Food Drive
The Vermont Foodbank, Vermont Agency of Agriculture, Ben & Jerry’s and Cabot, along with Vermont Hannaford, Price Chopper and Shaw’s, have teamed up to coordinate a Dairy Food Drive this summer. The purpose of this drive is to help Vermont families in need get nutritious dairy products during the challenging summer months when children are not in school and to help Vermont’s struggling dairy farmers by moving more dairy products from the market and educating consumers about the importance of dairy in our diets.There are two ways to help!
During the months of June, July and August, dairy drives will be held at various locations throughout the state. Just show up and purchase an extra gallon of milk, cheese, yogurt or any dairy product that will be collected in refrigerated trucks on site and distributed by the Foodbank to locations where needy families have access to the products.
Visit one of the following locations from 8 a.m. to 4 p.m. on the days listed to donate dairy to the Vermont Foodbank:
Saturday, June 13th
- Milton Hannaford
- St Albans Hannaford and Price Chopper
Saturday, July 11th
- South Burlington, Shelburne Rd Price Chopper
- Williston Hannaford
- Colchester Shaws
Saturday, August 8th
- Brattleboro Hannaford and Price Chopper
You can also donate today online at the Virtual Dairy Food Drive. It’s quick and easy and will get nutritious dairy products to those who need them most.
Click here for more info about Donate Vermont Dairy and the Vermont Foodbank.
(Thanks to Diane Bothfeld at the Vermont Agency of Agriculture for writing the e-mail that became this blog post.)
UPDATE 6/13/09: Added photos from the St. Albans stores this morning. Above is a Monument Farms refrigerated truck at Price Chopper. Sharron Hancock of our St. Albans office was also at Price Chopper buying groceries and making a donation. Below is a Vermont Foodbank refrigerated truck at Hannafords. Standing next to some donated dairy products on the rear lift is Tom Abbiati, Program Director/Food Resources for Vermont Foodbank.
Tom said that the Vermont Agency of Agriculture was doing a news conference at the Milton Hannaford this morning. Darn, I missed it!
Monday, June 1, 2009
Tax Tips Newsletter
Our June issue of Tax Tips newsletter will be mailed this month. This newsletter is sent to current tax and records clients, if you would like to be added to the mailing list for future editions please contact your local office. We anticipate sending this out quarterly. Below is an excerpt from the newsletter, to read the whole thing click here.
Taxes are Done – Now What? By Mike Farmer, Vice President
Now that your income taxes are completed, what do you do with them? Well a lot of farm businesses need them for obtaining credit. At Yankee, credit customers are required to provide an annual balance sheet and income statement. Most customers provide their federal income tax return as their income statement. This year you may have noticed the Consent to Use forms that we mailed with our annual Enrollments. These Consent to Use forms allow the tax preparers to share your information with the credit staff. Sometimes this is the same person!
For further assistance, please feel free to call a Financial Services Representative at your local office.
Taxes are Done – Now What? By Mike Farmer, Vice President
Now that your income taxes are completed, what do you do with them? Well a lot of farm businesses need them for obtaining credit. At Yankee, credit customers are required to provide an annual balance sheet and income statement. Most customers provide their federal income tax return as their income statement. This year you may have noticed the Consent to Use forms that we mailed with our annual Enrollments. These Consent to Use forms allow the tax preparers to share your information with the credit staff. Sometimes this is the same person!
For further assistance, please feel free to call a Financial Services Representative at your local office.
Monday, May 25, 2009
Summit on the Future of Vermont
The Council on the Future of Vermont held a "Summit on the Future of Vermont" at UVM's Davis Center on Monday, May 11th. The Council spent 18 months interviewing Vermonters about their "hopes, aspirations and visions for the future of the state." (Yankee's Board of Directors was interviewed in August 2008.) The Council wrote a report summarizing its findings: Imagining Vermont: Values and Vision for the Future. The purpose of the Summit was to present and discuss the report, and provide a platform for the people of Vermont to use the report's findings to move forward.Each of the 18 individuals on the Council spoke briefly at the Summit about their observations of the project. One of the Council members was Emily Stebbins of UVM's Finance Office. Emily is the daughter of Yankee director Celeste Kane-Stebbins. Emily noted that her mother was in the audience, thus making this a multi-generational event for her family.
One Council member said that she was impressed with the dedication of the people of Vermont to democracy and as evidence she noted the hundreds of people in attendance at the Summit. I had been thinking myself about the composition of the attendees. There were 514 people registered, which I categorized by affiliation as follows: 16% education, 40% nonprofit, 23% government, 14% private for-profit, 7% other or unknown. It seemed to me that the private for-profit sector was under-represented, and the other sectors over-represented.
Several speakers mentioned Vermont's motto: Freedom and Unity. Freedom and unity are often in conflict, of course, and the motto is about seeking the right balance. I heard a lot at the Summit about promoting unity. I didn't hear much about freedom.
Four people represented Yankee at the Summit: Paul Gingue, Celeste Kane-Stebbins, Pam Simek and me.
The Burlington Free Press article about the Summit: Study: Bright Future for Vermont.
UPDATE 6/18/09: The Summit on the Future of Vermont Final Report is now available (8MB PDF file).
Friday, May 8, 2009
43rd Vermont Maple Festival
The Vermont Maple Festival is an annual event that is attended by 1000's of Vermonters and tourists. People gather from all over to celebrate Vermont's finest- Maple Syrup. It is held every year in the St. Albans park and is usually the last weekend in April. Some of the events that are held at the maple festival include a parade w/ the maple king and queen, a youth talent show, local music, the sap run, maple breakfast, etc… Also there are venders set up selling maple treats such as maple cotton candy, sugar on snow, maple creemees and more. They also have a sugarhouse set up in the park that is in use to show people how the process works to make maple syrup. Yankee Farm Credit and Clarence Brown, Inc. sponsored tours to two local sugarhouses: Cody L'esperance in Swanton; and Matt Playful in Fairfield.
Monday, May 4, 2009
AgEnhancement Grants
Farm Credit Awards $32,500 to 19 Northeast Farm Programs
Farm Credit Northeast AgEnhancement awarded $32,500 in grants to 19 programs in April. (25 organizations requested $101,255 in grant funds)
April AgEnhancement grants bring the total to over one million dollars! Press release forthcoming. Yankee Farm Credit funds the regional program with First Pioneer, Farm Credit of Western New York & Maine Associations and CoBank. Grants usually range from $1,000 to $5,000.
Farm Credit AgEnhancement April 2009 projects funded:
New Jersey Ag in the Classroom, $1,000
Rhode Island Farm Bureau, $1,000
Maine FFA, $1,000
NY Jersey Cattle Club, $2,500
Jersey Cattle Youth Event, $1,500
Vermont Folklife Center, $1,000
NOFA-Massachussets Organic Program, $1,000
NY Wine & Grape Tractor Demo, $5,000
Farm Fresh Rhode Island, $1,000
NY Pork Producers Scholarships, $1,000
New England Apple Association, $1,000
Vermont Feed Dealers Association, $1,000
Genesee Valley Farm Discovery Center, $1,000
University of Maryland Dairy Workshop, $1,000
NY Berry Growers Association, $1,500
Northern Forest Center, $1,000
New Hampshire 4-H Foundation, $1,000
Big E FFA, $5,000
New England Green Pastures, $4,000
Since it's 1996 inception, the program has awarded over $1,016,000 through 371 grants. Funding review deadlines remain August 1, December 1 and April 1. AgEnhancement guidelines and application are posted online at http://www.yankeeaca.com/about/L3/agenhance.htm.
After reviewing the guidelines, organizations are encouraged to e-mail appropriate funding requests, to include:
Cover letter
One-page application
May include supporting information (up to three pages)
Questions may be directed to Bob Smith.
UPDATE 5/11/09: Delivering the grant to Art Whitman of the Vermont Feed Dealers & Manufacturers Association. Looking on is Louise Calderwood, who wrote the grant application. The building in the background is UVM's Davis Center. Art and Louise were at UVM for one meeting and George was at UVM for another meeting, so it made a convenient place to meet.
UPDATE 5/18/09: Delivering the grant to Brent Björkman, Executive Director of the Vermont Folklife Center in Middlebury, Vermont. Brent was kind enough to give a tour of the Center to Ken Button and George. The grant will help support the publication of a book titled Forty-Six Years of Pretty Straight Going: The Life of a Family Dairy Farm. This book by George Bellerose is about the Wyman farm of Weybridge.
Farm Credit Northeast AgEnhancement awarded $32,500 in grants to 19 programs in April. (25 organizations requested $101,255 in grant funds)
April AgEnhancement grants bring the total to over one million dollars! Press release forthcoming. Yankee Farm Credit funds the regional program with First Pioneer, Farm Credit of Western New York & Maine Associations and CoBank. Grants usually range from $1,000 to $5,000.
Farm Credit AgEnhancement April 2009 projects funded:
New Jersey Ag in the Classroom, $1,000
Rhode Island Farm Bureau, $1,000
Maine FFA, $1,000
NY Jersey Cattle Club, $2,500
Jersey Cattle Youth Event, $1,500
Vermont Folklife Center, $1,000
NOFA-Massachussets Organic Program, $1,000
NY Wine & Grape Tractor Demo, $5,000
Farm Fresh Rhode Island, $1,000
NY Pork Producers Scholarships, $1,000
New England Apple Association, $1,000
Vermont Feed Dealers Association, $1,000
Genesee Valley Farm Discovery Center, $1,000
University of Maryland Dairy Workshop, $1,000
NY Berry Growers Association, $1,500
Northern Forest Center, $1,000
New Hampshire 4-H Foundation, $1,000
Big E FFA, $5,000
New England Green Pastures, $4,000
Since it's 1996 inception, the program has awarded over $1,016,000 through 371 grants. Funding review deadlines remain August 1, December 1 and April 1. AgEnhancement guidelines and application are posted online at http://www.yankeeaca.com/about/L3/agenhance.htm.
After reviewing the guidelines, organizations are encouraged to e-mail appropriate funding requests, to include:
Cover letter
One-page application
May include supporting information (up to three pages)
Questions may be directed to Bob Smith.
UPDATE 5/11/09: Delivering the grant to Art Whitman of the Vermont Feed Dealers & Manufacturers Association. Looking on is Louise Calderwood, who wrote the grant application. The building in the background is UVM's Davis Center. Art and Louise were at UVM for one meeting and George was at UVM for another meeting, so it made a convenient place to meet.
UPDATE 5/18/09: Delivering the grant to Brent Björkman, Executive Director of the Vermont Folklife Center in Middlebury, Vermont. Brent was kind enough to give a tour of the Center to Ken Button and George. The grant will help support the publication of a book titled Forty-Six Years of Pretty Straight Going: The Life of a Family Dairy Farm. This book by George Bellerose is about the Wyman farm of Weybridge.
Friday, May 1, 2009
Board Officers and Committees
At the April 30, 2009 Board meeting, the Board of Directors elected the following officers:
Chairperson - Paul E. Gingue
Vice Chairperson - Rocklyn A. Giroux
Also approved were committee assignments:
Executive Committee
Alan J. Bourbeau
Rupert C. Chamberlin
Paul E. Doton
Paul E. Gingue
Rocklyn A. Giroux
Audit Committee
Rocki-Lee DeWitt
Walter M. Gladstone
Paul F. Saenger
Charles J. Sniffen
Stephen H. Taylor
Compensation Committee
Rupert C. Chamberlin
Rocki-Lee DeWitt
Paul E. Doton
Celeste Kane-Stebbins
Paul F. Saenger
Membership/Governance Committee
Alan J. Bourbeau
Rocklyn A. Giroux
Walter M. Gladstone
Celeste Kane-Stebbins
Charles J. Sniffen
Chairperson - Paul E. Gingue
Vice Chairperson - Rocklyn A. Giroux
Also approved were committee assignments:
Executive Committee
Alan J. Bourbeau
Rupert C. Chamberlin
Paul E. Doton
Paul E. Gingue
Rocklyn A. Giroux
Audit Committee
Rocki-Lee DeWitt
Walter M. Gladstone
Paul F. Saenger
Charles J. Sniffen
Stephen H. Taylor
Compensation Committee
Rupert C. Chamberlin
Rocki-Lee DeWitt
Paul E. Doton
Celeste Kane-Stebbins
Paul F. Saenger
Membership/Governance Committee
Alan J. Bourbeau
Rocklyn A. Giroux
Walter M. Gladstone
Celeste Kane-Stebbins
Charles J. Sniffen
Friday, April 17, 2009
Director Election Results
The last of four annual meetings was held last night in Newport. Members completed voting for directors, ballots were counted, and the results were announced before the meeting was adjourned. Elected to three year terms on the board of directors were:
Region 1 - Rocklyn Giroux
Region 2 - Paul Gingue
Region 3 - Stephen Taylor
Congratulations to Rocky, Paul and Steve. And thanks to Clark Hinsdale, Louise Calderwood and Paul Harlow for participating in the elections as candidates.
There were 180 ballots cast this year, which was 17% of eligible voters. This was up from 151 and 15% last year. Thank you to everyone for participating, and a special thanks to employees for organizing and running successful meetings.
Region 1 - Rocklyn Giroux
Region 2 - Paul Gingue
Region 3 - Stephen Taylor
Congratulations to Rocky, Paul and Steve. And thanks to Clark Hinsdale, Louise Calderwood and Paul Harlow for participating in the elections as candidates.
There were 180 ballots cast this year, which was 17% of eligible voters. This was up from 151 and 15% last year. Thank you to everyone for participating, and a special thanks to employees for organizing and running successful meetings.
Tuesday, April 14, 2009
NEK Dairy Farmers
The NEK Dairy Farmers hosted its April meeting at Cowtown in Derby, VT. The special guest was Dr. Max Thornsberry of Richland, Missouri. He is the owner and manager of TNT Cattle Co., a feeder calf operation; and Avanco Feeds, a vet and nutrition firm for beef, dairy, swine and companion animals. Dr. Thornsberry travels the country consulting with dairy producers on calf and heifer development and nutrition.
Dr. Thornsberry discussed calf raising techniques and protocols, stressing the importance of vaccinations, colostrum management, and daily gains. The meeting and the lunch were sponsored by Blue Sea/Richer Dairy Nutrition. The group sends a special thank you to the Nelson family for donating the facilities, and to Blue Seal for sponsoring the meeting.
Dr. Thornsberry discussed calf raising techniques and protocols, stressing the importance of vaccinations, colostrum management, and daily gains. The meeting and the lunch were sponsored by Blue Sea/Richer Dairy Nutrition. The group sends a special thank you to the Nelson family for donating the facilities, and to Blue Seal for sponsoring the meeting.
Monday, April 13, 2009
GSE Financial Results for 2008
When I originally wrote this column for Financial Partner magazine, 2008 financial results were not yet available for the three housing GSEs. Fannie and Freddie have since reported their 2008 results; the Federal Home Loan Banks still have not.
Fannie Mae's assets increased in 2008 to $912 billion. Fannie reported a loss of $59 billion in 2008 and negative equity (!) of $15 billion.
Freddie Mac's assets increased in 2008 to $882 billion. Freddie reported a loss of $50 billion in 2008 and negative equity of $31 billion.
In contrast, the Farm Credit System's assets increased in 2008 to $214 billion. The FCS reported 2008 income of $2.9 billion and positive equity of $27 billion (12.7% of assets).
As a point of reference, General Motors reported a 2008 loss of $31 billion and negative equity of $86 billion.
Fannie Mae's assets increased in 2008 to $912 billion. Fannie reported a loss of $59 billion in 2008 and negative equity (!) of $15 billion.
Freddie Mac's assets increased in 2008 to $882 billion. Freddie reported a loss of $50 billion in 2008 and negative equity of $31 billion.
In contrast, the Farm Credit System's assets increased in 2008 to $214 billion. The FCS reported 2008 income of $2.9 billion and positive equity of $27 billion (12.7% of assets).
As a point of reference, General Motors reported a 2008 loss of $31 billion and negative equity of $86 billion.
Sunday, April 12, 2009
What is a GSE?
The following column appears in the Spring 2009 issue of Financial Partner magazine:
Much has been written in the press the last few months about government-sponsored enterprises or GSEs. What are they? And how do they relate to Farm Credit?
A GSE is a financial institution created by Congress to serve a specific sector of the economy that Congress believes is underserved. The Farm Credit System was the first GSE, created in 1916, to aid farmers and ranchers.
Congress created three subsequent GSEs to aid home buyers: the Federal Home Loan Bank System (FHLB) in 1932; the Federal National Mortgage Association (Fannie Mae) in 1938; and the Federal Home Loan Mortgage Corporation (Freddie Mac) in 1970. The three housing GSEs have grown much larger than Farm Credit. In fact, this graph shows their total assets as of the end of 2007:
GSEs have been in the news because the federal government placed Fannie Mae and Freddie Mac into conservatorship on September 7, 2008. The government took this action because of the weakening financial condition of Fannie and Freddie, which resulted from the bursting of the housing bubble and the subsequent mortgage financial crisis. Fannie and Freddie are now owned and operated by the government.
The FHLB, a system of 12 institutions, is also showing signs of stress, and at least three of its institutions have indicated possible problems with meeting capital standards.
What about Farm Credit?
The Farm Credit System required government assistance in the 1980s, but reported profits every year since 1988. The System recently reported 2008 earnings of $2.9 billion. Capital, as a percentage of total assets, declined in 2008 from 14.2 percent to 12.7 percent due to loan growth. But compare the System’s capital position to the 4.2 percent capital position for the FHLB, the strongest of the housing GSEs, at the end of 2007.
Although Congress created these four GSEs, it did not give each the same oversight and regulation.
We in the Farm Credit System believe that the current regulation of the System is effective and does not need to be changed. If proposals come about in Congress to change our regulation, we may ask for your support to keep congressional oversight with the agriculture committees and regulatory oversight with the Farm Credit Administration.
UPDATE: Please see this post for 2008 financial results for these GSEs.
Much has been written in the press the last few months about government-sponsored enterprises or GSEs. What are they? And how do they relate to Farm Credit?
A GSE is a financial institution created by Congress to serve a specific sector of the economy that Congress believes is underserved. The Farm Credit System was the first GSE, created in 1916, to aid farmers and ranchers.
Congress created three subsequent GSEs to aid home buyers: the Federal Home Loan Bank System (FHLB) in 1932; the Federal National Mortgage Association (Fannie Mae) in 1938; and the Federal Home Loan Mortgage Corporation (Freddie Mac) in 1970. The three housing GSEs have grown much larger than Farm Credit. In fact, this graph shows their total assets as of the end of 2007:
GSEs have been in the news because the federal government placed Fannie Mae and Freddie Mac into conservatorship on September 7, 2008. The government took this action because of the weakening financial condition of Fannie and Freddie, which resulted from the bursting of the housing bubble and the subsequent mortgage financial crisis. Fannie and Freddie are now owned and operated by the government.The FHLB, a system of 12 institutions, is also showing signs of stress, and at least three of its institutions have indicated possible problems with meeting capital standards.
What about Farm Credit?
The Farm Credit System required government assistance in the 1980s, but reported profits every year since 1988. The System recently reported 2008 earnings of $2.9 billion. Capital, as a percentage of total assets, declined in 2008 from 14.2 percent to 12.7 percent due to loan growth. But compare the System’s capital position to the 4.2 percent capital position for the FHLB, the strongest of the housing GSEs, at the end of 2007.
Although Congress created these four GSEs, it did not give each the same oversight and regulation.
- Congressional oversight of the Farm Credit System is by the House and Senate agriculture committees and regulatory oversight is delegated to the Farm Credit Administration (FCA). FCA is an independent federal agency, which was given strong regulatory authorities — such as the authority to place a regulated entity into conservatorship or receivership — as a result of the System’s federal bailout in the 1980s.
- Congressional oversight of the housing GSEs is by the House and Senate banking committees. Before July 2008, two separate entities had regulatory oversight: one for the FHLB and one for Fannie and Freddie. And neither had strong regulatory authorities. In July 2008, due to the worsening financial condition of the housing GSEs, Congress combined regulatory oversight of the three housing GSEs into the Federal Housing Finance Agency (FHFA) and gave the new agency strong regulatory authorities. Less than six weeks later, the FHFA placed Fannie and Freddie into conservatorship.
We in the Farm Credit System believe that the current regulation of the System is effective and does not need to be changed. If proposals come about in Congress to change our regulation, we may ask for your support to keep congressional oversight with the agriculture committees and regulatory oversight with the Farm Credit Administration.
UPDATE: Please see this post for 2008 financial results for these GSEs.
Thursday, April 9, 2009
Vermont Woodlands Association
Ken Button, Senior Vice President from the Middlebury office attended the annual meeting of Vermont Woodlands Association at Vermont Technical College on April 3rd. Jason Gibbs, Commissioner of Forest Parks and Recreation and Jonathan Wood, Secretary Agency Natural Resources addressed the group, among others. The meeting was well attended.
Monday, April 6, 2009
Training for Ag Professionals
The NH Dept. of Agriculture recently sponsored a training day for ag professionals on helping farmers and farm businesses deal with stress. The training was provided by Karen Mastronardi and Wayne Knoblauch of NY FarmNet, affiliated with Cornell University.
One of the training resources discussed was a 4-page guide titled Assist by Caring Today: What you can do to help farm families in distress, published by Kansas State University. Another online resource mentioned in the training was Families for Depression Awareness.
More than 40 people attended the training in Concord, NH on April 2nd, including Jean Conklin, Loan Officer and Farm Tax Specialist from Yankee's White River Jct. office. Yankee Farm Credit, First Pioneer Farm Credit and other ag businesses helped sponsor this training.
One of the training resources discussed was a 4-page guide titled Assist by Caring Today: What you can do to help farm families in distress, published by Kansas State University. Another online resource mentioned in the training was Families for Depression Awareness.
More than 40 people attended the training in Concord, NH on April 2nd, including Jean Conklin, Loan Officer and Farm Tax Specialist from Yankee's White River Jct. office. Yankee Farm Credit, First Pioneer Farm Credit and other ag businesses helped sponsor this training.
North American Intercollegiate Dairy Challenge
The 8th Annual North American Intercollegiate Dairy Challenge was held March 27-28 in the Syracuse, NY area. (press release) Over 120 students from 31 colleges and universities in the U.S. and Canada competed. Teams from the University of Minnesota, Ohio State University, Purdue University and the University of Wisconsin-Madison won top honors. A team from the University of Vermont, coached by Wanda Emerich, won a gold award.Jean Conklin, Loan Officer and Farm Tax Specialist from Yankee's White River Jct. office, serves on the NAIDC Board of Directors. Yankee Director Dr. Charlie Sniffen served as a judge for the event. Farm Credit is a major sponsor for the event, with support from the Northeast AgEnhancement Program and the Farm Credit System Foundation, as well as many individual Farm Credit institutions including Yankee.
Next year's national competition will be held next April in Visalia, CA. Four regional contests will be held before then. The next northeast competition will be Nov. 5-7, 2009 in Glens Falls, NY.
Thursday, April 2, 2009
Alfred Dunklee
The Board of Directors celebrated Alfred Dunklee's long service to Yankee Farm Credit and its predecessors at its meeting on March 31st. Alfred is an avid Red Sox fan, and the celebration included an appropriate cake:
Here is a close-up of the cake before Alfred wielded his knife:
Alfred served on the Board of Yankee or one of its predecessors for 33 years (1974-1983 and 1985-2009). He was Chairman for 17 years (1989-2006). Alfred led the Association through many changes, including the 1989 mergers of PCAs and FLBAs into ACAs, and the 1995 merger of Farm Credit of the Connecticut Valley and Champlain Valley Farm Credit into Yankee Farm Credit.
Over the years Alfred served with many directors and several CEOs. The current crew:
Left to right: Charlie Sniffen, Paul Gingue, Paul Doton, Rupert Chamberlin, me, Rocky Giroux, Celeste Kane-Stebbins, Paul Saenger, Rocki-Lee DeWitt, Alfred, Alan Bourbeau. Missing: Walt Gladstone.
Alfred, thank you for your leadership, guidance and wisdom over the years! Best wishes to you and Martha. See you at Annual Meeting.
Here is a close-up of the cake before Alfred wielded his knife:
Alfred served on the Board of Yankee or one of its predecessors for 33 years (1974-1983 and 1985-2009). He was Chairman for 17 years (1989-2006). Alfred led the Association through many changes, including the 1989 mergers of PCAs and FLBAs into ACAs, and the 1995 merger of Farm Credit of the Connecticut Valley and Champlain Valley Farm Credit into Yankee Farm Credit.Over the years Alfred served with many directors and several CEOs. The current crew:
Left to right: Charlie Sniffen, Paul Gingue, Paul Doton, Rupert Chamberlin, me, Rocky Giroux, Celeste Kane-Stebbins, Paul Saenger, Rocki-Lee DeWitt, Alfred, Alan Bourbeau. Missing: Walt Gladstone.Alfred, thank you for your leadership, guidance and wisdom over the years! Best wishes to you and Martha. See you at Annual Meeting.
Thursday, March 26, 2009
Annual Report Back Cover
We've received many compliments about the photo on the back cover of our annual report this year. The photo was taken by photographer Terry Norris of Shoreham, if you would like to contact Terry his phone number is 802-897-7014.
The sugarhouse and tractor belong to John and Myrdith McKinley from Vergennes.
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