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:

• 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

Our main message this year was that we are meeting the needs of our customers and doing business as usual, notwithstanding the financial crisis last fall and the current downturn affecting many of our customers, especially in the dairy and timber industries. We are lending money; our financial results are good; we continue to pay patronage refunds; and the Farm Credit System has not needed any government assistance. This message was well received.

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:

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).

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.

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

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.

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!

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.