What We Offer

The following column appears in the Fall 2010 issue of Financial Partner magazine:

What We Offer

At our annual meetings last spring I talked about something that your board of directors and management added to our planning process this year. We tried to capture in three short phrases the most important things that Yankee offers to its customers. Here’s what we came up with:

1. Readily available capital
2. Competitive interest rates and services
3. Employees who represent our values

What do we mean?

Readily available capital

We are proud to be part of the Farm Credit System, which has been serving rural America since 1916. Within the Farm Credit System, Yankee’s relationship with CoBank helps us meet the credit needs of our customers. The Farm Credit System, CoBank and Yankee are all well-capitalized and profitable, which enabled us to operate throughout the financial crisis of 2008 without a hitch.

Competitive interest rates and services

Our interest rates are competitive, even after our October 1st increase of 0.25% in variable interest rates. Our rates look even better considering patronage refunds. We have paid patronage refunds every year since 1995.

Our financial services are also competitive, and include recordkeeping, income tax preparation, appraisal services, credit life insurance and crop insurance.

Employees who represent our values

It is our employees who make Yankee special. We have a talented group of employees, ranging from recent college graduates to veteran employees with more than 35 years of experience. One of the values we talk about is the importance of relationships and our pride that we are “Building Relationships That Last Generations.”

It’s about the customer

We exist to serve our customers, and to a considerable extent we are a reflection of our customers. Earlier this year I heard U.S. Secretary of Agriculture Tom Vilsack say that “the value system of this country is centered in Rural America.” Our customers represent those values. We at Yankee are fortunate indeed to work with such outstanding customers.

A final word

This is our final issue of Financial Partner magazine. Next year we will replace the magazine with quarterly newsletters. One reason for making this change is our desire to be more “local.” Keeping our business in our local economy is a win/win situation for everyone. For our 2009 annual report cover, which featured Monument Farms, we switched to a local designer and printer. We were very pleased with their work and we’ll be using the same designer for our newsletter. Look for our first newsletter in March.

We will also continue to communicate via our web site (http://www.yankeeaca.com/) and our blog (yankeeaca.blogspot.com). Please stop by either of those two Internet sites and let us know what’s on your mind. You can also send e-mail to me directly at george.putnam@yankeeaca.com.

Click here for the complete Fall 2010 issue of Financial Partner magazine (3 MB PDF file).

Ag Career Day

Rob Guay and Kyle Lussier attended the 2nd Ag Career Day at Miner Agricultural Institute. The idea is to get “youth interested in careers in Ag related careers in Clinton County.” The event brought over 250 area high-school students through a series of stations in which they were engaged in discussions with professionals in agricultural related fields or participated in presentations relating to agriculture. The interactive stations included presentations on careers in forestry, watersheds, soil sampling and pH, vegetable farming, alternative energy and the Ag economy. The event was a great success in which a large number of both students and chaperones/parents interested in agriculture were given the opportunity to explore the various possibilities which are present in the agricultural field. It's a great event which reinforces that you don’t need to shovel manure to work in agriculture… there are other Ag jobs which offer college bound students an opportunity to work in Ag.

The event has grown considerably from the initial session. Plans are to hold it every two years for high-school kids in order to give them two chances to go in their high-school career. Organized by Cornell University Cooperative Extension, 4-H and Miner Institute. Sponsored by a long list of area businesses including YFC.

4-H Foundation of New Hampshire

Ken Nelson, Senior Loan Officer from the White River Junction office, recently represented Yankee at the 52nd Annual Meeting of the 4-H Foundation of New Hampshire. This year the meeting was held October 19, 2010 at Alan’s Restaurant in Boscawen, NH.

The 4-H Foundation helps support the many 4-H programs in New Hampshire which involve over 20,000 youth and 2,500 adult volunteers in all aspects of 4-H. Over the past year, the Foundation has provided financial support of more than $100,000 to help fund these programs.

During the meeting thanks and recognition was given to the people who have volunteered their time and talents working with 4-Hers over the years. Special recognition was given to four women who have each worked with the 4-H youth for more than 40 years. Quite an honor for these exceptionally dedicated people.

Several 4-Hers made presentations highlighting projects they have worked on or educational trips they have taken over the past year. Two teens spoke enthusiastically about their participation in a program designed to provide various activities, entertainment, life skills training and many other types of support to New Hampshire children who have a parent or parents in the military. 4-H partners with several other organizations in this program titled Operation: Military Kids (OMK). There are more than 4,000 children in New Hampshire’s military families at the present time. This is one of the many projects that the 4-H Foundation supports.

Yankee Farm Credit supports the 4-H Foundation of New Hampshire as an “Achiever” donor.

CoBank's Outlook Newsletter

CoBank publishes a monthly newsletter called Outlook. Each issue features an interview with an expert on a topic of interest. Following is a list of this year's issues:

Jan - Assessing Inflation Risk, Todd Buchholz
Feb - The Case for Free Markets*, George Melloan
Mar - Double-Digit Growth — No Matter What, Michael Treacy
Apr - Economics and Population Growth, Robert Fogel (Nobel prize 1993)
May - Outlook for the Eurozone, Judy Shelton
June - Tax Policy and the U.S. Economy, Leonard Burman
July - Protectionism vs. Free Trade, Douglas Irwin
Aug - Keynes, Hayek and the Great Stimulus Debate*, Russ Roberts
Sept - Russia's Future in the World Economy, Bruce Parrott

*mentioned in previous blog posts

The September issue includes a special report on the outlook for the U.S. livestock sector including dairy. The livestock sector is being heavily influenced by current events in the crop sector, including Russia's recent embargo on wheat exports.

Interest Rate Changes 10/1

The following letter is being mailed to members with the next monthly billing statement:

September 16, 2010

Dear Member,

I am writing to let you know that all variable interest rates to members will increase by 0.25% effective October 1, 2010.

There are two primary reasons for this increase. First, market interest rates for short-term debt have increased slightly in recent months. This has increased our cost of funds. Second, the risk profile in our loan portfolio has increased in the past two years as a result of the general economic downturn which has affected nearly every industry we serve. More risk calls for higher interest rates to compensate for the increased possibility of default and loss.

We understand that many of our borrowers are facing difficult times. We lowered our variable interest rates considerably during the financial crisis of 2008, to the lowest rates in our history. We waited as long as possible before increasing rates, but we now find it necessary to increase rates to maintain the Association’s strong financial position. We believe that this modest increase of 0.25% for all borrowers, our first general interest rate increase since July 1, 2006, is appropriate given the increased level of risk in our loan portfolio.

Please feel free to ask your loan officer any questions you may have about your interest rate.

Thank you for your continued patronage and best wishes for your financial success.

Sincerely,

George S. Putnam
President and CEO

Health Benefits of Maple Syrup

You always knew that maple syrup was good for you, right? Recent research indicates that this might indeed be true. A researcher at the University of Rhode Island's College of Pharmacy has found numerous anti-oxidant compounds in maple syrup:

URI pharmacy researcher finds beneficial compounds in pure maple syrup

Click here for the scientific abstract. The research used Canadian maple syrup, but I'm sure that maple syrup from Vermont, New Hampshire and New York has the same benefits!

Liberty Hyde Bailey

Liberty Hyde Bailey was an influential leader of the Country Life Movement in the late 1800s and early 1900s. He founded Cornell University's College of Agriculture and was its first dean. In 1908 President Teddy Roosevelt selected Prof. Bailey to chair a National Commission on Country Life.

The 1909 Report of the Commission on Country Life was influential in the development of many institutions that we know today. It led to the Smith-Lever Act of 1914 which created the Cooperative Extension Service. It profoundly affected the evolution of 4-H. And it led to the creation of the Farm Credit System in 1916.

Much of Prof. Bailey's work built on the foundation of the land grant university system—see the earlier post about Justin Smith Morrill. Cornell University is New York's land grant university. It has both a Morrill Hall and a Bailey Hall.

Cornell further honors Prof. Bailey with the Liberty Hyde Bailey Leadership Society. Several northeast Farm Credit employees are members of this society, including Geoff Yates of Yankee Farm Credit. Many employees of northeast Farm Credit are graduates of Cornell University, including Yankee's Geoff Yates, Loren Petzoldt, Kelly Langmaid and Clara Hall.

The influence of Cornell University on Farm Credit is strong and it began with Liberty Hyde Bailey.

Justin Smith Morrill

Justin Smith Morrill was born 200 years ago in Strafford, Vermont. He represented Vermont in the U.S. Congress for 44 years, first as a representative (1855-1867) and then as a senator (1867-1898).

Senator Morrill is known as the father of the land grant university system. He authored the Morrill Land-Grant Colleges Act which provided federal funding for land grant colleges and universities. But he never attended college himself. Many land grant universities today have a Morrill Hall in honor of Senator Morrill, such as this one at UVM.

Senator Morrill is in the Vermont Agricultural Hall of Fame.

In 1848-1851, before he became a Member of Congress, Mr. Morrill constructed the Morrill Homestead in Strafford. This has been a National Historic Landmark since 1960, and is well worth a visit. There is a modest fee for the house tour, but the self-guided grounds tour is free and there is an interesting interpretive display about Senator Morrill's life and accomplishments in the carriage barn. The site is open only part of the time, so be sure to check the official web site for hours of operation.

The grounds of the Morrill Homestead are beautiful, and one of the many interesting things they contain is this:

The map of the grounds identifies it only as a "kettle." The photo above is from the Friends of the Morrill Homestead web site and the caption there says only: "This cistern is a favorite hangout for frogs in the summer." I think it is a potash kettle.

Back on the subject of land grant universities, many employees of northeast Farm Credit are graduates of one of the land grant universities in New England, New York and New Jersey. It is no surprise that Yankee Farm Credit has many UVM graduates, as well as graduates from the University of New Hampshire, the University of Maine and Cornell University. Elsewhere in northeast Farm Credit, there are also graduates of Rutgers University.

Most land grant colleges and universities are public institutions, but there two exceptions. Cornell University is part public and part private. The other exception may surprise you—the Massachusetts Institute of Technology. Yankee Farm Credit is pleased to also have a graduate of MIT on its staff, Farm Tax Assistant Randy Smith in our Newport office.

Progressive Dairyman Poll on Dairy Policy

Vermont's three Members of Congress have sponsored two bills on dairy policy (see Dairy Policy Bills). There are also other dairy policy proposals under active consideration. Some have been introduced as bills in Congress and some have not.

Progressive Dairyman magazine recently provided a roundup of the various proposals and conducted a poll. The following link is a good place to start, then follow the links from there for more detail:

PD POLL: Dairy Reform [Updated July 2]

The proposals included in the Progressive Dairyman poll were:

• Federal Milk Marketing Improvement Act of 2009 (S.1645) aka the Specter-Casey Bill
• Farmers Union proposal
• Holstein USA Plan (Dairy Price Stabilization Plan)
• NMPF Plan (Foundation for the Future)
• Dairy Growth Management Initiative
• Dairy Price Stabilization Act of 2010 (H.R.5288) aka the Costa Bill
• Ration-all
• Strategic Dairy Reserve

(Progressive Dairyman did not include the DPI Plan or S.3531.)

The "Holstein USA Plan" aka the Dairy Price Stabilization Plan is the plan favored by Dairy Farmers Working Together (see Growth Management Plan).

Progressive Dairyman has a concise side-by-side summary of three of the above plans (Specter-Casey, the Dairy Price Stabilization Plan and the NMPF Plan): Part 1 from the 7/21/10 issue and Part 2 from the 8/11/10 issue.

The results of the PD poll were: Specter-Casey 67%, NMPF 15%, Dairy Price Stabilization Plan 12%, all others 6%. However, the magazine editors felt that the results were skewed by a Pennsylvania consumer write-in campaign as they explain here.

This raises an interesting question. How should we decide dairy policy? Should we be influenced by a consumer write-in campaign? Or...Should we trust the experts?

Should we trust the experts?

No one can know everything, and when we are confronted with a problem outside of our comfort zone we often defer to the judgment of experts in that area. Are the experts necessarily better?

The latest CoBank Outlook newsletter features an interview with Prof. Russell Roberts of George Mason University about the economist Friedrich Hayek. (Related posts: Keynes vs. Hayek - The Non-Rap Version and Keynes vs. Hayek - The Rap Version.)

The Outlook newsletter quotes Prof. Roberts as follows:

"The underlying insight of Hayek is to be skeptical of the ability of experts and individuals to steer complex systems."

Long-time readers of this blog may recall a post two years ago that discussed similar thoughts by the physicist Richard Feynman: What is science?

"Learn from science that you must doubt the experts."
"Science is the belief in the ignorance of experts."
"The experts who are leading you may be wrong."

Hayek and Feynman were both PhD's. Hayek won the Nobel prize for economics in 1974. Feynman won the Nobel prize for physics in 1965. So, there you have it. Two experts advising us to be skeptical of experts. Surely there's a little humor in that.

There was not much humor, however, in the financial crisis of 2008. That crisis provided a clear example of the dangers that Hayek and Feynman were talking about. A year ago I wrote about the dangers of relying too much on experts, in this case "experts" armed with mathematical models: What went wrong?