Financial Management for Community Entrepreneurship

On January 25, 2010, John Peters, Vice President of Operations, and Lisa Young, Records and Tax Specialist, attended a course at UVM. They met with the Financial Management for Community Entrepreneurship class being taught by Professor Grace Matiru, Ph.D. John's presentation dealt with the role that an applicant's financial records play in the credit decision process. He discussed the relationship between an applicant's financial records and the Five C's of Credit. Lisa's presentation provided the students with an understanding of the importance of developing and following a business plan - and then adjusting that plan as circumstances change. She used real life examples to emphasize the importance of financial records and business plans.

NH Risk Management Workshop for Agricultural Professionals

On January 14, 2010, about 60 agriculture professionals from NH gathered for an update on risk management issues in Concord, NH. Jean Conklin, Loan Officer and Farm Tax Specialist, from the White River office, and Shantel Thomas, Crop Insurance Agent, from the St. Albans office attended the meeting to represent Yankee. Farm Credit East was represented by David Bishop and Carol Zintel of the Bedford office.

Topics covered included:

· recent and proposed legislation impacting NH farmers;

· Good Agricultural Practices (GAP) and its implementation on the farm;

· updates from NRCS, FSA and the NH Coalition for Sustaining Agriculture;

· Risk Management Agency (RMA) Opportunities and Programs and with an update by Shantel Thomas of Crop Growers, LLP; and

· dairy industry outlook and a dairy products and marketing panel which included presentations by Shirley Tullar of Berway Farm in Lyme, NH which has recently started bottling grass fed milk and Robin Chesmer of The Farmer’s Cow in Connecticut.

Lorraine S. Merrill, NH Commissioner of Agriculture, Markets and Foods, addressed the group about the Keep Local Farms initiative.

A Thrifty Dairyman

Arthur H. Packard, Sr. was president of Vermont Farm Bureau from 1928 to 1953, and a legend in Vermont agriculture. (Click here for more information about Arthur Packard.  He is in the Vermont Agricultural Hall of Fame.)

In his August 1949 column Mr. Packard quoted "a thrifty but smaller Vermont dairyman":

"I think Vermont farmers should cut out all unnecessary cost in the production of milk. I favor keeping the investment in the dairy plant and farm machinery at the lowest point consistent with getting the job done."

The farmer that Mr. Packard quoted was Harold Putnam of Cambridge, my father, then 34 years old. He had 30 cows at the time, and 15 youngstock. I recently reminded my father (now 95 years old) of this quote. He laughed and said, "Well, that advice hasn't gone stale yet, has it?"

Below is Mr. Packard's column from my father's scrapbook (click on the image to enlarge):

2009 Patronage Refund

The following letter is being mailed to members today:

January 14, 2010

Dear Member,

I am writing to you about the Association’s patronage refund program.

Since 1995 Yankee Farm Credit has paid a patronage refund of at least 1.00% (100 basis points) of member average loan volume. On two occasions, the Association paid more than 1.00% — 1.125% for 2006 and 1.20% for 2007. In both of those years, the Association’s financial ratios were favorable and this allowed a larger patronage refund.

The planned 2009 patronage refund is 0.80% (80 basis points) of member average loan volume. There are two reasons for this reduced patronage refund:

• Credit quality deteriorated in 2009, reflecting the financial difficulties facing many of our borrowers, particularly in the dairy industry. Consequently we recorded a provision for loan losses of $1.8 million, more than double the previous largest amount. This reduced the Association’s net income, which is the source of patronage refunds. Net income was also lower in 2009 than it could have been because we kept interest rates low.



• The Association’s loan volume increased in 2009 by 13% over 2008, primarily due to additional loans to existing customers to finance operating shortfalls. This is the most annual loan growth that Yankee has seen since its inception in 1995. This unusual growth reduced the Association’s capital ratios, and the Association failed to meet all of its capital goals for 2009. Conserving capital by reducing the patronage refund is prudent financial management.

Net income for 2009 (unaudited) was just over $5.0 million, and the planned patronage refund is $2,573,000 or 51% of net income. We plan to pay the 2009 patronage refund on or about March 25, 2010, which is the usual timing. As is true every year, there are two conditions that must be met before we pay patronage refunds to members: successful completion of the Association’s audit and receipt of the Association’s patronage refund from CoBank. We expect both conditions to be met by mid March.

The 2009 patronage refund will be paid 100% in cash, the same as in previous years.

Thank you for your patronage. Best wishes for the New Year.

Sincerely,

George S. Putnam
President and CEO

NH Women in Agriculture

Loan Officer/Farm Tax Specialist Jean Conklin, from the White River Jct. office, attended the New Hampshire Women in Agriculture Conference held at Antioch University New England in Keene, NH on January 9, 2010. The topic of the conference was Balancing Farm and Family, and also included a discussion of a formation of a Women in Agriculture Network in NH, similar to the WAgN groups in Vermont and Pennsylvania. The event was sponsored by UNH Cooperative Extension, NHDAMF and RMA. This day-long conference featured the following presenters:

· Kathy J. Soder, PhD, Farmer, Wife, Mother and Research Animal Scientist, USDA-ARS, State College, PA
· Annette M. Higby, Attorney, Randolph, VT
· Shelby Colwell, Crop Growers, LLP
· Lorraine S. Merrill, Commissioner, NHDAMF
· Tara Sad, Environment and Agriculture Committee Chair, NH House of Representatives
· And a farmer panel of local NH Women.

In the 2007 Census of Agriculture, NH has the 2nd highest percentage of farms owned/operated by women in the US, second only to Arizona.

Keep Local Farms

The Keep Local Farms program announced an arrangement with Hannaford Supermarkets yesterday to support northeast dairy farmers. Beginning February 1st Hannaford customers can make a voluntary contribution at the checkout register which will be pooled and paid to dairy farmers. More info:

Hannaford Supermarket pledges to help local farmers - WCAX article 1/12/10
Hannaford to help New England farmers - Burlington Free Press article 1/13/10

This marks a major new direction for Keep Local Farms. The program kicked off last September with initial support from UVM and Harvard. Interested persons can also support the program online.

Keep Local Farms is a joint initiative of the New England Family Dairy Farm Cooperative, the Cooperative Development Institute, the Vermont Dairy Promotion Council and the New England Dairy Promotion Board. Yankee director Walt Gladstone is president of the New England Family Dairy Farm Cooperative, and was present at yesterday's media event in South Burlington. The print edition of today's Burlington Free Press has a photo with Walt and others, but the photo is not online.