Minot: 852-1265 | Bottineau: 228-3731 | Carrington: 652-2836 | Crosby: 965-2265 | Rugby: 776-5863 | Williston: 774-0055
Bowbells Crop Insurance: 377-3703 | Ward County Crop Insurance - 852-5432
ISSUEIN THIS
What A Difference A Year Makes
Farm Credit ServicesProducts & Services
FCS Offers A Wide ArrayOf Products & Services
Margin Protection 2018
2017 Tailgate Tour Schedule
Meet Mark Knorr Man On The Run
Crop Insurance Reminders
Crop Insurance Helpful Hints
Rural Community Grant Fund
Livestock Risk Protection
Pat-NOW Community FundAwards Local Area Grants
Drought Management
Employee News
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large portion of western North Dakota is lacking moisture. Crop insurance
specialists are busy taking loss claims for 2017.
A lot of cow/calf operators have trimmed their herds. Pastures are
short and the hay supply is even shorter. Many of you have received calls from the livestock industry begging for hay. Hay prices are very high. Producers are debating whether buying hay to keep the whole herd will be worth it. Very soon we will be announcing a special loan program for ranchers to help maintain your base cattle herd that you have worked so hard to build. Look for more program information coming soon. Contact your loan officer for more details.
Farmers coming in the front door are telling me they have somewhere between an average crop to
a poor crop. In the next month, we will know. Crop prices have improved, but that only helps if you have something to sell.
The increased prices should help your multi-peril crop insurance coverage if you have Revenue Protection, which most Farm Credit Services of ND customers have. Our insurance companies have been put on notice they will be busy this fall.
Most of you will weather this storm just fine. I urge you to come and visit with your Farm Credit Services representative early if you have any questions or concerns. We have many options to help you cope with the changes in farm income. Farm Credit Services of ND expects to be here during the good times and the challenging times. This year we seem to have both.
What a difference a year makesHERE FOR YOU DURING THE GOOD TIMES AND THE CHALLENGING TIMES.
• Claude Sem •
FALL 2017 3
A
REAL ESTATE LOANS Long-term credit for land, land improvements, buildings and facilities.
OPERATING LOANS Short and intermediate credit for operating purchases, family living and feeder livestock.
TERM LOANS Intermediate term credit for capital purchases such as machinery, breeding livestock, irrigation systems and vehicles.
LEASING SERVICES A financing alternative for cash flow, tax advantages and other considerations: lease livestock, facilities, farm equipment, vehicles, computers, irrigation systems and specialty equipment.
YOUNG & BEGINNING FARMER LOANS Programs and resources to help finance young or beginning farmers or ranchers.
FAMILY FARM PROGRAM Designed especially to assist farmers in bringing the next generation into the business. A partnership between the seller, buyer and FCS, which provides a low cost plan to transfer the farm from one generation to another or from one farmer to another.
LIFE & DISABILITY INSURANCE Affordable life and disability insurance coverage to protect your family’s income, home and acreage in the event of illness, injury or death.
Products & ServicesCROP INSURANCE Multi-peril, revenue protection and hail insurance policies that can help protect your investment against crop loss or damage.
APPRAISAL SERVICE Certified real estate and chattel appraisers experienced to give quality rural appraisals.
ESTATE PLANNING Through an alliance, we can provide you with information and advice to help you make decisions on transferring farm assets and meeting retirement goals.
FUNDS HELD Park excess funds in this account and earn interest until you make a withdrawal.
FARM CASH MANAGEMENT A flexible product that links your revolving line of credit with an AgriBank money market investment or it can simply serve as a standalone money market investment account alternative.
ELECTRONIC BANKING Simple, convenient and secure access to your account information 24 hours a day, 7 days a week through telephone or internet service.
CREDIT LINE CHECK WRITING A convenient way to access your pre-approved line of credit simply by writing a check.
DISBURSEMENT CARD Disburses funds straight from your operating loan to pay farm expenses.
FarmCredit ServicesALL THE PRODUCTS& SERVICES TO MEET YOUR NEEDS
Farm Credit Services of North Dakota provides short, intermediate and long-term credit to farmers, ranchers and ag-related businesses.
FCS of ND also offers life and disability insurance, crop hail insurance, multi-peril crop insurance, real estate fee appraisals, and expertise in estate planning.
We offer the most comprehensive credit and insurance packages tailored for the agricultural industry. Here is a list of the products and services we offer. Be sure and visit with our staff to see how they can work for you!
64 INSIDE FARM CREDIT SERVICES
FALL 2017 5
s this article is written, producers have put seed in the ground with hopes of a
good harvest, are taking care of the crops and livestock, and are in the haying process for winter feeding. These steps are all part of the business
of growing food for the world. As physical and often repetitive as these steps may be, there is a large part of your business that involves taking care of things that are ever-changing and that we may not consider part of the daily needs. Following are examples of products and services provided by FCS of ND that will assist you in those ever-changing needs by working with the Loan Officers and Insurance Specialists in a Farm Credit Services office near you.
Along with providing the operating loans that most producers use on an annual basis, term loans can be used to assist with stretching out your cash flow to accommodate a capital purchase of machinery and equipment, livestock, vehicles or other items that depreciate faster. The typical duration of these loans is 2 to 5 years with some extended maturities depending on the item. Fixed rates are still attractive for loans in this category, and the variable rate is competitive with the local market.
When the planned or unforeseen long-term need for credit arises, a real estate loan can assist you with purchasing and improving the land, building facilities or to use existing RE equity to improve the cash flow needs when a shorter term option will not work. The minimum
term for a real estate loan is 5 years, with typical terms of 10 to 20 years or longer depending on the cash flow plan for your operation. Interest rate options range from the variable rate and both adjustable and fixed rate options up to 30 years.
When your tax representative feels a loan is not right for your needs, leasing options are available for farm equipment, vehicles, specialty equipment and facility expansion. A typical lease has a first payment due at time of possession, followed by a series of annual payments, with a buyout option when the term of the lease expires with typical terms 3 to 5 years.
Life and Disability Insurance are some of the products used to protect your wealth in the event of illness, injury or death. Estate planning can help you plan how to transfer your assets and meet your retirement goals. These products are offered through an alliance with Freedom Financial Group.
Crop Insurance in the form of multi-peril crop insurance, hail insurance or livestock risk protection are other risk management tools to help protect the annual investment you have in your production. We have many years of experience with our agents throughout FCS of ND to assist you in determining the best option for your business.
Money management tools available, and most often used at FCS of ND, are funds held, farm cash management and credit line check writing.
Funds held gives you the ability to park excess funds in a loan account (not to exceed that loan’s available commitment) to be used for upcoming payments or later withdrawal, while earning interest.
Farm cash management is a flexible product that is an investment in AgriBank bonds or AgriBank Money Market investments that earn a competitive interest rate. You will receive detailed monthly transaction statements and are allowed to access your FCM anytime with no limits or fees on transactions with a liquid asset. This product can be linked to your existing revolving line of credit or can be a stand-alone account. (This investment is not insured by or a direct obligation of the U.S. government.)
Credit line check writing is available to qualified accounts that will allow you to write checks for operating needs that will be deducted directly from your pre-approved line of credit.
As another year of production comes full cycle, remember to use the tools available to you from FCS of ND to ensure your risk management and financial needs are met for the next year and beyond.
A
FCS OFFERS A WIDE ARRAY OF PRODUCTS & SERVICES
• Todd Erickson •
6 INSIDE FARM CREDIT SERVICES
argin Protection insurance (MP) is a privately-developed product that first became
available in 2016. MP is an area-based insurance plan that provides coverage against an unexpected decrease in operating margin (revenue less input costs), caused by reduced county yields, reduced commodity prices, increased price of certain inputs, or any combination of these perils.
Because MP is area-based (average for a county), an individual farm may have a decrease in its margin, but not receive an indemnity. The margin protection plan can be purchased by itself, or in conjunction with a Yield Protection (YP) or Revenue Protection (RP) policy. If a producer buys a YP or RP policy, they will receive an MP premium credit because indemnity payments from one policy can offset payments from the other so this combination lowers the risk of loss under MP. Important: If a producer buys another policy, it must be from the same Approved Insurance Provider that issued the MP policy.
M
MARGINPROTECTION
2018DAVE PAUL,
VP UNDERWRITING AT QBE NAU
THE LAST DAY TO PURCHASE A
MARGIN PROTECTION POLICY
FOR CORN, SOYBEANS AND
SPRING WHEAT IS SEPT. 30, 2017.
MP IS ENTERING ITS 3RD YEAR WITH SOME EXCITING CHANGES IN STORE FOR THE 2018 CROP YEAR.
• The RMA expanded MP for corn and soybeans to Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
• The maximum coverage level available was increased to 95 percent. A producer may choose coverage from 70 percent to 95 percent of their expected margin.
• Protection factors are now offered from 0.80 to 1.20.
• The program was updated to add a harvest price option (HPO) for all MP crops. Like many popular revenue-based policies, if the harvest price is greater than the projected price, the expected margin and the trigger margin are recalculated based on the higher harvest price.
• The calculation of deductibles and trigger margins has been revised.
CORN EXPANSION AREA SOYBEAN EXPANSION AREA
In addition to the expansion into corn and soybeans, in North Dakota MP is available for spring wheat in all counties.
SO HOW DOES MP WORK? MP provides coverage that is based on an expected margin per acre for each applicable crop, type, and practice.
CALCULATING AN MP TRIGGER (WITHOUT THE HPO)
• The expected revenue per acre is the expected county yield multiplied by a projected commodity price; and
• The expected cost per acre is the dollar amount determined by multiplying the quantity of each allowed input by the input’s projected price.
HARVEST MARGIN = HARVEST REVENUE – HARVEST COSTS
FALL 2017 7
EXPECTED MARGIN
(Expected Yield x Projected Price) – Expected Cost
(180 bu/ac x $4.00) - $313.60/ac = $406.40/ac
CALCULATING AN MP INDEMNITY
• The harvest revenue per acre is the final county yield multiplied by the harvest price; and
• The harvest cost per acre is the dollar amount determined by multiplying the quantity of each allowed input by the input’s harvest price.
HARVEST MARGIN = HARVEST REVENUE – HARVEST COSTS
MARGIN DEDUCTIBLE
Expected Revenue x (1-Coverage Level)
(180 bu/ac x $4.00) x (1-95%) = $36/ac
TRIGGER MARGIN
Expected Margin – Margin Deductible
$406.40/ac - $36/ac = $370.40/ac
EXPECTED MARGIN
(Expected Yield x Projected Price) – Expected Cost
(180 bu/ac x $4.00) - $313.60/ac = $406.40/ac
MARGIN DEDUCTIBLE
Expected Revenue x (1-Coverage Level)
(180 bu/ac x $4.00) x (1-95%) = $36/ac
TRIGGER MARGIN
Expected Margin – Margin Deductible
$406.40/ac - $36/ac = $370.40/ac
For wheat, the final county revenues and final county yields are determined generally around April 1 following the crop year. If an indemnity is due, the Approved Insurance Provider issues any payment around May 1 of the following crop year. For corn and soybeans, the final county revenues and final county yields are determined before April 16 following the crop year. If an indemnity is due, the Approved Insurance Provider issues any payment before May 16 following the crop year.
MP LOSSES ARE PAID WHEN FINAL AREA YIELDS ARE AVAILABLE, IN THE SPRING OF THE FOLLOWING YEAR.
arm Credit Services and local high school football teams are “teaming up” for the fifteenth year hosting “Home Field Advantage” tailgate parties. WOW!
Fifteen years!
Farm Credit Services sets up the Pat-NOW grill and “tailgates” at local high school football games. Game-goers can purchase a hamburger or hotdog, chips and pop with all
F
August 24th: Glenburn* vs Minot High JV
August 25th: Velva* vs Harvey/Wells County
September 15th: Kenmare* vs Velva
September 15th: Westhope/Newburg/Glenburn* vs Langdon
September 29th: Berthold* vs Kenmare
* Designates the home team
2017 Tailgate Tour Scheduleproceeds being donated back to the home team. To date, through our 2016 grilling season, Farm Credit Services has donated over $66,000 to designated school organizations in local communities.
Let’s give them the “Home Field Advantage!” We look forward to grillin’ up a burger or hotdog for you!
8 INSIDE FARM CREDIT SERVICES
joke about the fact that I didn’t learn to walk until
I was 40 years old on the farm, because I ran,”
says Mark Knorr with a spring in his voice that
suggests, despite having learned the art of walking, you
won’t find him sauntering or strolling anytime soon. “When
the door opened, I ran out to take care of the livestock. I
ran across the yard to do everything I was doing. You’re
trying to do the work of two or three people all the time.”
With around 5,400 tillable acres of wheat, soybeans,
corn, canola, pinto beans and sunflowers on the family
farm south of Sawyer and stakes in irrigated operations in
Turtle Lake and Arizona, one thing Mark has never learned
is to sit still and collect dust.
Growing up, life on the farm was defined by work. Lots
of work. “We started out with chores, feeding livestock,
hauling lots of little square bales of hay before the round
balers were invented. When you start hand-milking a few
cows and hauling bales that are heavier than you, so heavy
you can’t even pick them up, you have to roll them, you
physically become a workaholic at an early, early age.”
Whether armed with a strong work ethic or afflicted
with workaholism, Mark graduated from North Dakota
State University in 1977 with a degree in animal science
and immediately returned to the family farm, partnering
with his two brothers in its operation.
His brothers’ interests would move away from the
livestock and grain operation as they pursued other
business ventures, but Mark’s interest would focus on
grain, and he would run with it.
“You just keep putting pieces together,” explains Mark,
“it’s an ongoing process that every farmer goes through.”
When larger purchases became available from family
members, he would purchase land that they owned or pick
up available ground they had been renting to expand his
own operation when they went on to different interests.
“Sometimes those costs don’t fit into a normal
budget, and they can put extra pressure on cash flow.
That’s one of the things I can look back and be thankful
for, having the opportunity to be involved with Farm
Credit Services and having capital available to expand the
operation. I think, over the years, that’s been the biggest
benefit, just having access to a good line of capital for
operating, purchasing equipment, and purchasing land, to
have access to lenders that understand agriculture and
can see the value of expansion.”
As the farm grew slowly over time, Mark’s life sprinted
ahead in other ways. Through a relative working in Minot,
he made the acquaintance of Carol, a recent NDSU
pharmacy graduate from Fessenden. They were married,
and before long their three children, Becky, Lisa, and
Brian, were out playing on the land Mark’s father had
broken out of sod, back before it ever produced a grain
crop. They learned the value of crop insurance from the
drought cycles in the 80s. When beef cattle hit the $1,000
mark, they sold out of livestock for good, lessening the
workload to focus on family and crop agriculture.
The little square bales Mark had muscled around at
the age of five had ballooned into immovable rounds. The
simple formula of good soil, seed, water, and sun became
quantified, multiplied by the benefits of in-season nitrogen
top-dressing, and charted out on a moisture-mapped
variable-rate application prescription.
“Agriculture seems now to be light-years away from
where we were 50 years ago,” says Mark. “When we
first started, we thought 30 bushels an acre was a great
crop for wheat. I remember when I first approached the
100-bushel mark on wheat and brought my dad back out
from his retirement to ride in the combine and see that we
could actually achieve a yield like that.”
Hay bales and bushel expectations weren’t the
only things to grow. When the opportunity to invest with
his nephew on an irrigated operation near Turtle Lake
MAN ONTHE RUN
MEET MARK KNORR
“I
• Reminders •
FALL 2017 9
presented itself, the opportunity for growth, and capital
demands, were sizeable. What started out as only six
sprinkler pivots expanded to 34 pivots and approximately
4,000 acres under irrigation over the course of five years, all
through Farm Credit financing.
“There are so many different angles to agriculture
today,” says Mark of financing the Turtle Lake venture.
“Farm Credit’s capability of financing more than just crop
inputs is an invaluable resource to me. I was drawn to Farm
Credit by their favorable interest rates and willingness to
finance farm operations. One of the things that has helped
Farm Credit attract agricultural interests is their Pat-NOW
philosophy, being able to help lower their interest rates
upfront for borrowers, competing with other outside sources
of financing.”
Today, Mark doesn’t need to run like he did while
helping bring up a young family and growing operation, but
that doesn’t mean he’s slowing down. Neither is anything
else, with the kids pursuing their own interests. Becky, the
oldest, pursued pharmacy like her mother and works at
Mayo Clinic in Rochester, MN. Lisa went into hospitality and
tourism management. She and her husband live in Surrey
with their two children, Mark and Carol’s only grandchildren.
The youngest, Brian, works as a civil engineer in Minot,
working his own acreage on the farm and helping his dad
when he can.
For a man who didn’t learn to walk until he was 40,
Mark, his family, and his operation have certainly found
their stride.
End of the insurance period The end of the insurance period is the earlier of the date of harvest, or the calendar date set by RMA guidelines. Listed below are the calendar dates for the commodities in our areas.
SEPT. 30TH: Silage corn, dry peas
OCT. 15TH: Forage, potatoes
OCT. 31ST: Wheat, canola, flax, barley, oats, rye, dry beans, mustard
NOV. 15TH: Sugar beets
NOV. 30TH: Sunflowers
DEC. 10TH: Grain corn, soybeans
These are the deadlines to report a loss on any of your crops that are not harvested by these dates.
Harvest remindersAPPRAISALS NEEDED: If you intend to put any crop to a different use, other than how it is insured, you must notify your agent immediately so a notice can be filed and an adjuster can come out to do an appraisal. Without taking these steps any crop that is destroyed without consent will receive a “0” production count in your APH and you don’t want that.
If at any time you feel your crop is not harvestable or there isn’t enough of a crop there to warrant combining you need to contact your FCS Insurance Specialist right away. A Notice of Loss will be filed and an insurance
adjuster can come out and do an appraisal. If you accept that appraisal the crop can be released and you may do whatever you choose with it, like bale it or graze it.
CLAIMS: Production and Revenue claims need to be reported by unit or section within the required timeline. Do not wait until you are completely done harvesting. A deadline of 15 days from the end of the insurance period applies in most cases. The end of the insurance period is the earlier of harvest of that crop or the date designated by your policy. Claims can be denied by your Insurance provider due to a delayed notice.
Keep good production records! Maintain a load log of production as it comes off the field. Mark scale tickets with the field name/section number if hauling to the elevator. Mark bins if commingling production from other units. Remember, keeping good production records will make any claims you may have go much smoother.
Grain from past years cannot be stored with current year grain until the past production has been measured by an adjuster. So give your agent a call if you intend to commingle grain between years.
If you suspect you may have quality issues with any of your crops you need to contact your FCS Insurance Specialist right away. There is no harm done in opening a claim just in case. Claims can be withdrawn at any time but if we miss reporting deadlines a claim can be denied.
10 INSIDE FARM CREDIT SERVICES
ho would have
guessed after the
winter we had, we
would be talking about drought
conditions. Soil conditions vary
greatly across the state. “You can drive 25 miles north
of Minot and 25 south and you would see very different
conditions,” says Nick Dreyer, FCS Insurance Specialist in
Minot. Farmers are reporting that their canola is spotty and
the fast advancing wheat is short. The Minot area is several
inches below its normal rainfall totals for the year and now
we’re in the hottest, driest part of the year. The damage to
the earlier season crop is irreversible and that brings us
to a reminder about Multi-Peril Crop Insurance Production
Losses. “We are expecting many more production claims
than we have seen in a long time,” says Brian McIntyre,
ARMtech Insurance Sales Representative. As we enter
harvest and you are questioning whether you have a loss
or not, the best advice is to call your agent. “We can tell you
what your guarantee is very quickly. When in doubt call,
because every year I see someone who has a production
loss, didn’t call and it’s too late,” says Dreyer. There are
deadlines for every crop to get your claim in, for example,
wheat is October 31st, soybeans is December 10th, so
don’t wait. There are some grace periods and special
exceptions for Revenue Protection losses, but it’s better
to have a claim filed and withdraw it, rather than waiting.
“Keeping good records is an important part of helping
us during the claims process. The use of load records
becomes beneficial to the producer,” says McIntyre. FCS
Crop Insurance Agents can also explain how Enterprise vs.
Optional Units effects your claim. If you have Enterprise
Units on canola, for example, all of your canola production
in that county will have one guarantee. You could have a big
loss on one field, but if your other canola fields are good,
you may not have a loss. On Optional Units, every section
with that crop has its own guarantee. Revenue Protection
vs. Yield Protection can also make a difference in your loss.
Below is an example of a wheat loss situation for both RP
and YP when the wheat price increases at harvest.
W
HELPFUL HINTSCROP INSURANCE
AS WE ENTER HARVEST
AND YOU ARE QUESTIONING
WHETHER YOU HAVE A LOSS
OR NOT, THE BEST ADVICE IS
TO CALL YOUR AGENT.
REVENUE PROTECTION:
Acres – 100Wheat APH – 50 bushelsCoverage level – 75%Base price - $5.65Harvest price - $6.50Harvested Production – 25 bushels/ac
50 APH x 75% x 100 acres x $6.50 = $24,375 revenue guarantee. 25 bu/ac x 100 acres x $6.50 = $16,250. $24,375 - $16,250 = $8,125 indemnity.
YIELD PROTECTION:
Acres – 100Wheat APH – 50 bushelsCoverage level – 75%Base Price - $5.65(No Harvest Price in YP Plan)Harvested Production – 25 bushels/ac
50 APH x 75% = 37.5 bu/acre guarantee x 100 acres = 3,750 bushel guarantee. 25 bu/ac x 100 acres = 2,500 bu. harvested production. 3,750 – 2,500 = 1,250 x $5.65 = $7,063 indemnity.
WHEN IN DOUBT- CALL
MINOT VOCATIONAL ADJUSTMENT WORKSHOP NEW VEHICLE FOR KALIX HUMAN CONNECTION PROGRAM
TIOGA SENIOR CITIZENS CLUB VEHICLE THEY WILL USE FOR MEALS ON WHEELS, PROVIDING TRANSPORTATION FOR AREA SENIORS
PORTAL INTERNATIONAL FIRE DEPARTMENT REPLACE WATER TANKER TRUCK
BAKKEN OIL RUSH MINISTRY PURCHASE AND RENOVATION OF TWO BUILDINGS
COLUMBUS RURAL FIRE DEPARTMENT REPLACE A WATER TANKER TRUCK
ECKERT YOUTH HOMES FITNESS PARK FOR AT-RISK YOUTH
$25,000
$10,000
$6,000
$5,000
$5,000
$5,000
arm Credit organizations in western North Dakota announced grant awards to worthy programs that will improve lives in local communities through the
Rural Community Grant Fund.
The fund was established as a partnership between Farm Credit Services of Mandan and Farm Credit Services of North Dakota – the two largest providers of agricultural loans in western North Dakota – and AgriBank Farm Credit Bank, their St. Paul, Minn.-based funding bank, to help communities impacted by mineral development.
Grants support critical community needs such as healthcare, safety, access to housing, education and economic development.
“The number of grant requests has grown substantially,” said Claude Sem, CEO of Farm Credit Services of North Dakota. “It is great to know so many communities in oil impacted areas who need financial assistance to support their programs and services are able to benefit from our resources. We are proud to give back to those communities.”
The Rural Community Grant Fund is accepting applications for programs that meet the needs of communities in western North Dakota. Interested parties should apply at www.farmcreditnd.com or www.farmcreditmandan.com before August 31, 2017.
Grant FundSUPPORTING WESTERN NORTH DAKOTA COMMUNITIES
LIGNITE FIRE PROTECTION DISTRICT FIRE AND RESCUE UTILITY TERRAIN VEHICLE $5,000
TIOGA MEDICAL CENTER ENZYME IMMUNOASSAY ANALYZER
MOHALL AMBULANCE SERVICE NEW DEFIBRILLATORS
WILLIAMS COUNTY 4-H EDUCATIONAL EQUIPMENT
$5,000
$3,500
$3,350
BOWBELLS PARENT TEACHER ORGANIZATION CHILDREN’S READING PROGRAM AND EQUIPMENT$2,000
LATEST GRANT FUNDS
RURALCOMMUNITY
FALL 2017 11
F
12 INSIDE FARM CREDIT SERVICES
he recent cattle market
fluctuations have hit the news
as drought forced sales and
competition increases from pork and
chicken. The projected opening up of
the market in China has the potential to
enhance our local livestock markets. The
U.S. and world economy continue to impact prices as well,
so how can both cow/calf operators and feeder livestock
operations ensure profitability. Using the futures markets
with hedges and options can be an effective strategy,
but for a rancher looking for a simple tool, Livestock Risk
Protection (LRP) may be the answer.
By now, most of you have probably heard of LRP. If you
already use this price protection tool, you know the comfort
it brings to have profits locked in for your operation. If you
don’t use LRP, stop in and see one of our loan officers or
insurance specialists. They can walk you through how the
program works and show you the benefits of this excellent
risk management tool.
LRP is protection for declining market cattle prices.
It is an insurance product administered by the Risk
Management Administration (RMA) and you can think of
it as MPCI insurance for your cattle prices. Each trading
day, LRP prices are listed on the RMA website at www.
RMA.usda.gov. These prices change daily depending on
how markets move. Endorsements, or the length of the
price protection, can be offered from 13 week to 52 week
increments. Weight classes are available for younger calves
up to 599 pounds, backgrounded calves from 600-900
pounds, and also finished cattle. Both steers and heifers
are available to be covered, but coverage for heifers is not
available if they are bred at the time of the LRP purchase.
When you purchase LRP, you are putting a floor on your
cattle prices. The great thing for all producers is that you
can insure anywhere from 1 to 2,000 head per year, so no
matter your size operation, you can take advantage of this
excellent risk management tool.
An example from this time last year will give you a good
idea of how this product will work. Let’s say last August 14,
2016 you decided to sell your weaned 599-pound steers
in November, 2016. You could have purchased a 13-week
endorsement for $220.19/cwt, which would have cost you
$3.37/cwt, leaving you with a net coverage of $1,299/head.
As you probably know if you are a cattle producer, prices
fell. This LRP endorsement would have paid you $24.77/
cwt or $148.37/head! Because cattle basis is relatively
insignificant to the ND market, you should have gotten close
to $195/cwt for your steers, ensuring the gross income of
$1,299/head. NDSU’s budget for a cow/calf operator is
$654/cow, so if you are close to that amount this would
have resulted in a profit of $645/head!!!
The question then is what is available now. As noted
above, the prices change daily, but as of August 8, 2017,
13-week coverage prices available for steers up to 599
pounds ranged from a $1.41 to $1.59. The heifer price had
a range of $1.28 to $1.44. If you were looking for heavier
steers in the 600-900 pound, those prices were $1.28 to
$1.44.
What is your breakeven for 2017 for your cattle
operation? When you know that, stop and see your loan
officer or insurance specialist. They can show you the
current price protections available and help you customize
your risk management options. The calves do have to be
on the ground and coverage is in effect only if you own
the calves at least 30 days prior to the LRP endorsement
expiration date.
TLIVESTOCK RISK PROTECTION
• Dan Beyer •
CallCandidates
for
FARM CREDIT SERVICES OF NORTH
DAKOTA WANTS YOU! If you are interested in
running for a position on the
Board of Directors, please contact
Kathy Berg, VP Human Resources,
at [email protected] or by
calling 800-264-1265.
FALL 2017 13
arm Credit Services of ND is proud to announce the latest Pat-NOW Community Fund (PNCF) grants awarded to local area businesses and
organizations.
“Our local and rural communities in northwest North Dakota face challenges every day, and at Farm Credit Services we believe it’s important to give back to these communities,” says Claude Sem, CEO.
The year to date total funds awarded in 2017 is $50,181.00.
The Pat-NOW Community Fund of $100,000 is funded annually by Farm Credit Services of ND. Applications will be reviewed three times a year and grants will be considered for up to $10,000, or possibly higher based on special request. The next two grant sessions end in August and November 2017. For more information on the PNCF, and for the online application, visit our website atwww.farmcreditnd.com.
F
PAT-NOW COMMUNITY FUND AWARDS LOCAL AREA GRANTSDURING THE FIRST REVIEW SESSION ENDING APRIL 2017, THE FOLLOWING GRANTS WERE AWARDED:
BOTTINEAU RODEO CLUB:OUTDOOR RIDING ARENA
$5,000|
|
BURKE COUNTY STRAIGHT SHOOTER 4-H CLUB: ARCHERY PROGRAM
$4,181|
|
CITY OF FLAXTON: PLAYGROUND EQUIPMENT
$2,500|
|
FESSENDEN BOWDON FFA ALUMNI: GARDEN TRACTOR PURCHASE
$2,000|
|
MAX PUBLIC SCHOOL:MAX PUBLIC SCHOOL GREENHOUSE
$5,000|
|
NDSU FOUNDATION & ALUMNI ASSOCIATION: NEW SEED CONDITION FACILITY
$25,000|
|
ROLETTE COUNTY SHERIFF’S OFFICE: BULLETPROOF VESTS, TASERS, & OTHER EQUIPMENT
$2,500|
|
SERENE CIRCLE: CHAIRS FOR EDUCATIONAL/SUPPORT GROUP MEETINGS
$1,500|
|
WARD COUNTY SHOOTOUT:SPONSORSHIP IN MULTI-SPECIES LIVESTOCK SHOW IN JUNE 2017
$2,500|
|
14 INSIDE FARM CREDIT SERVICES
DROUGHTMANAGEMENT
rought management is one of
those terms that both producers
and lenders are hoping to avoid
long term. The Palmer Drought index as
of August 8 showed that every county in
our service area is in at least a moderate
drought and eight counties have at least
some area identified as extreme drought. By the time
this article comes to publication, hopefully moisture has
returned in time to help row crops and replenish hay and
pastureland. However, if that has not happened, the quote
by Benjamin Franklin “If you fail to plan, you plan to fail” is
appropriate here.
Proactive management is critical when trying to
manage the risk in your operation, and Farm Credit Services
of ND is here to help. There are certainly differences if you
produce crops versus cattle, but what is not different is the
importance of early and often communication with your
loan officer and insurance specialist.
For the crop producer, you have already made your
decision on your MPCI options by March 15 of this past
year. It is noted in other articles within this magazine, but
at any point if you suspect a crop loss, contacting your
insurance specialist is important to do timely – and it costs
nothing to turn in a claim. With potentially lower crop
production, if you have carryover crop or have new crop
production, taking advantage of price rallies to market
your commodities could prove to be a wise strategy.
For cattle producers, there are a number of government
based (mostly FSA) disaster assistance programs that
include the following:
• HayNet and Grazing Net – An Internet based
program to help producers connect with each
other to move hay or offer grazing land
• Emergency Conservation Program (ECP) – Can
provide funding assistance for water conservation
D• Dan Beyer •
• Livestock Forage Disaster Program – Provides
compensation for grazing losses due to drought
• Livestock Indemnity Program – For livestock
deaths due to adverse weather equal to 75% of
the market value.
Contacting FSA is the place to start for finding out if
these programs can work for you.
With potentially lower income, holding off on capital
purchases may be prudent. Dealers continue to be
aggressive in selling equipment, but adding unnecessary
debt with potential losses looming should be avoided. Here
is where your relationship with your loan officer is critical –
they can work with you to come up with a positive solution
that helps ensure your long term success.
Farm Credit Services of ND is in a strong capital
position to continue to be your lender in good times and
bad. We have experienced staff who know how to work
with producers and provide positive solutions. Agriculture
producers face many perils, but together we can help you
succeed and produce the food, fiber and fuel for the world.
FALL 2017 15
TODD ERICKSON accepted the position
of AVP-Marketing on January 1, 2017,
after having been Branch Supervisor for
one of the two Minot branches since 2013.
He began his career with FCS of ND in October 2003 as a
Loan Officer and was previously with Target for 15 years.
Todd graduated from Columbus High School and earned
degrees in Accounting and Business Administration-
Management from Minot State University. He and his
wife, Della, have been married for 30 years and have two
sons and one grandson. Todd enjoys hunting, golfing and
spending time with his family at the cabin or on the farm.
Employee News
COLE HANSON was hired as the 2017
summer intern. Cole grew up in Minot
and graduated from Minot High School
in 2014. He was active in FFA throughout
high school and participated in a variety of CDE’s such
as livestock judging, meats judging, farm and ranch
management, ag mechanics and food and sciences. Cole
was the chapter Secretary and Treasurer in his junior
and senior years respectively. He attended Minot State
University for one and a half years and transferred to North
Dakota State University in the spring of 2016 where he is
currently a senior majoring in Ag Economics and minoring
in Crop and Weed Sciences. Cole is a member of the Saddle
and Sirloin Club, Ag Business Club and Judging Club. In his
spare time, he enjoys hunting and fishing.
CHELSIE BERNDT was hired this spring
as a Customer Service Representative
(CSR) in the Minot Branch. Chelsie grew
up on her family ranch in Towner, the XC
Ranch which is celebrating its 76th year of operation, and
currently resides there with her son helping her parents
operate the ranch. Prior to working for Farm Credit
Services she was employed with Town and Country Credit
Union working in the Mortgage Department as well as
American Bank Center working in the Commercial and
Ag Department. Chelsie graduated from Towner High
School and attended college at Dickinson State University
earning a degree in Equine Management. In her spare
time, Chelsie enjoys working at the ranch with her family,
working with her horses and traveling to various barrel
racing jackpots, going to the lake, playing with her son
and their two dogs, and baking.
KEITH SENEY accepted the Insurance
Specialist position in the Minot Branch.
This position was previously held by James
Dufner who transferred to the Credit Service
Department in the Minot office. Keith is a Minot native, born
and raised. Before joining Farm Credit Services, he was the
General Manager for Allied Van Lines/Jobbers Moving and
Storage in Minot for over 10 years. He and his wife, Candy,
have two sons and three grandchildren and will celebrate
their 34th wedding anniversary in August. Keith’s hobbies
include motorcycle riding, traveling and spending time
with his family and grandkids spoiling them every chance
he gets.
MICHAEL LEHN recently joined Farm
Credit Services in the Minot Branch as a
Loan Officer right out of college. He grew
up on a small cattle farm in Andover, MN
where they raised Herefords and produced corn and alfalfa
for feed. Michael is currently the 7th generation on the
farm, but will reestablish his roots as the farm is running
out of room to grow because of housing development. He
grew up hunting, fishing and playing hockey for Anoka,
MN. Michael attended North Dakota State University and
University of Wisconsin River Falls where he acquired
a degree in agribusiness with an emphasis in finance.
Michael is excited to be part of FCS of ND and is looking
forward to meeting all the new faces.
Presorted StandardU.S. Postage PaidPresort Plus, LLC
3100 10th St. SW • Box 70Minot, ND 58702
MULTI-PERIL CROP INSURANCE
HAIL INSURANCE
LIFE INSURANCE
LOANS
LEASES
APPRAISALS
Minot852-1265
Bottineau228-3731
Carrington652-2836
Crosby965-2265
Rugby776-5863
Williston774-0055
Bowbells Crop Insurance
377-3703
Ward County Crop Insurance
852-5432 FCS OF ND IS AN EQUAL OPPORTUNITY PROVIDER AND EMPLOYER.
FINANCINGRURAL
COMMUNITIESFOR OVER100 YEARS.