Fall 2014

MeetingDemand for

Locally Grown

Fall 2014

FEATURE STORY > 3

Market-focused entrepreneurs are tapping into consumers’ growing appetite for locally grown food.

yiel

dsWho we are: Northwest FCS is a customer-owned

financial cooperative providing financing and related

services to farmers, ranchers, agribusinesses, commercial

fishermen, timber producers, rural homeowners and

crop insurance customers in Montana, Idaho, Oregon,

Washington and Alaska. Northwest FCS provides

approximately $12 billion in loans and is a member of the

Farm Credit System, a nationwide network of borrower-

owned lending institutions that provide approximately

$205 billion in loans to rural America.

Board of DirectorsKaren Schott, Chair, Broadview, MT

Dave Nisbet, Vice Chair, Bay Center, WA

Rick Barnes, Callahan, CA

Christy Burmeister-Smith , Newman Lake, WA

Jim Farmer, Nyssa, OR

Mark Gehring, Salem, OR

Dave Hedlin, Mount Vernon, WA

John Helle, Dillon, MT

Greg Hirai, Wendell, ID

Herb Karst, Billings, MT

Kevin Riel, Yakima, WA

Nate Riggers, Nez Perce, ID

Julie Shiflett, Spokane, WA

Shawn Walters, Newdale, ID

About YieldsYields is produced for stockholders of Northwest FCS, an

Agricultural Credit Association. Comments and story ideas

can be sent to the Marketing Department, c/o Northwest FCS,

P.O. Box 2515, Spokane, Washington 99220-2515.

website: northwestfcs.com

Northwest Farm Credit Services is an equal opportunity

employer and does not discriminate on the basis of race, color,

religion, sex, national origin, marital status, age, disability,

disabled veteran, Vietnam era or other eligible veteran status.

AgVision Financing for the Next Generation > 10

Executive Producers Summit and Succession

Planning Seminar > 13

Protecting Your Security When You Travel > 15

As consumer demand increases for locally grown food – particularly in large, urban markets like Seattle

and Portland – we see a growing number of new producers getting started in agriculture. They’re

interested in farming and learning how to build a business.

Getting involved in the local foods market gives producers the opportunity to connect directly with

the consumer. Most consumers purchasing locally grown products want a connection to the land. They

tend to be more health conscious and appreciate a wider variety of food. People caring more about

where their food comes from is a good thing for agriculture. Unfortunately, some people have never

talked to a farmer before. Connecting with producers helps consumers appreciate farmers and what it

takes to grow food.

At Northwest FCS, we see tremendous opportunity to serve these niche markets. But they’re quite

different from production agriculture. We’ve expanded staff to learn more about these producers’

needs. We know the local foods market is extremely diverse, which presents some challenges. We’re

looking for ways to develop new systems and delivery channels to better address their needs.

The next generation of farmers and ranchers will be more diverse than ever before. They’ll have a

variety of opportunities to bring innovative ideas to agriculture. Our mission is to serve all aspects of

agriculture. Urban farming presents an exciting business opportunity for Northwest FCS and we are

looking forward to establishing the same long term relationships we’ve been privileged to have with

traditional producers.

Locally Grown OpportunitiesPhil DiPofi, President and CEO

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Consumer demand for local foods is undeniable and growing. More Consumer demand for local foods is undeniable and growing. More

and more people want to know where their food comes from. Yet, not and more people want to know where their food comes from. Yet, not

so obvious is what defines “local.” When people hear “local foods,” they so obvious is what defines “local.” When people hear “local foods,” they

often picture small growers selling directly to consumers through often picture small growers selling directly to consumers through

farmers’ markets, farm stands or you-pick farms. Those are definitely farmers’ markets, farm stands or you-pick farms. Those are definitely

aspects of local foods. But, retail grocers and the service industry are aspects of local foods. But, retail grocers and the service industry are

responding to the demand for local foods too. Their challenge is how to responding to the demand for local foods too. Their challenge is how to

provide safe and reliable quantities of small-volume products through provide safe and reliable quantities of small-volume products through

large-volume channels at affordable prices – 52 weeks a year. large-volume channels at affordable prices – 52 weeks a year.

3 | Nor thwest Farm Credit Ser vices

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We recently visited with several Northwest FCS We recently visited with several Northwest FCS

customers who represent a broad spectrum customers who represent a broad spectrum

of the local foods marketplace. Some sell of the local foods marketplace. Some sell

directly to consumers, while others use in-directly to consumers, while others use in-

direct channels to market through regional direct channels to market through regional

food distributors, restaurants and grocery food distributors, restaurants and grocery

stores. The following stories reflect how stores. The following stories reflect how

these market-focused entrepreneurs arethese market-focused entrepreneurs are

tapping into the consumers’ growing appe-tapping into the consumers’ growing appe-

tite for locally produced foods.tite for locally produced foods.

Sol to Seed FarmSol to Seed FarmVisit the University District Farmers’ Market in Seattle and you’re likely to meet Matt and Deanna Tregoning with Sol to Seed Farm. They’re here every Saturday from April to Thanksgiving to sell a bounty of fresh vegetables from their farm in the Snoqualmie Valley, just 30 minutes from the city. The Tregonings have a unique story to tell. Matt works part-time for a title company and Deanna is a full-time nurse. Neither grew up on a farm, but they share a passion for eating healthy and growing their own food. Today, Sol to Seed Farm is well known for their quality and variety of produce. Matt and Deanna grow all their vegetables from seed and manage the farm themselves – without employees – to ensure consistent quality from the ground up.

Matt and Deanna didn’t plan to become farmers. Originally, they were just looking for property to get away from the rat race and grow their own food. But, all that changed in 2005 when Deanna and Matt volunteered for a work share program with Jubilee Farm. In exchange for food, they worked four hours a week. Their passion for the land and farming grew. In 2008 they were able to purchase twenty acres of farm ground through Northwest FCS’ AgVision program for young, beginning producers.

“The land was being leased by a Hmong flower grower and it hadn’t been farmed in years,” says Matt. “The place was a mess, totally overrun. We found a whole car dismantled in the blackberry bushes. But, we knew this valley had some of the best soil in the world. It was important for us to find land with a house, too, because you can’t build in this flood plain. Before we moved in, the first two years were tough. We were both commuting from Seattle and trying to get as much done in the daylight as possible. Now we’re on the farm full time. I think it’s really important to live here so you get to know your land in all seasons.”

Naturally grown to meet consumer Naturally grown to meet consumer demanddemand

Sol to Seed Farm is Certified Naturally Grown, a designation based on the highest ideals of organic farming tailored for

Matt and Deanna have been selling atUniversity District Farmers’ Market for four years.

Deanna reaps the bounty of harvest

5 | Nor thwest Farm Credit Ser vices

small-scale, direct-market farmers. Matt and Deanna use heavy cover crop rotations to build nutrients and amend the soil. Chicken manure is used for fertilizer and the birds come in handy when it’s time to clean out the greenhouses. It’s amazing to see how much produce the Tregonings grow on this small parcel of land.

“We’re actually growing less, but producing and selling more,” says Matt. “We’ve gotten a lot more efficient. When you first start out, you’re trying to grow everything – five different varieties of this or 10 different varieties of that. Then you start to figure out what people really want. Why grow 150 feet of broccoli when you can only sell 100 feet? It doesn’t make sense to grow it if you can’t sell it.”

Sustainable pricingSustainable pricing

Seattle is a great market for local foods with a large, diverse population willing to support local farms. But, Western Washington is also a very expensive place to live and work. To address the challenges, Matt recently served on a diverse, King County steering committee looking for ways to increase local food production and pay farmers a living wage.

“People were shocked when I told them I make $4.50 per hour farming,” says Matt. “Sometimes people think if we’re going to farmers’ markets and getting market prices that we’re making tons of money or driving food prices up. That’s not the case. We can’t sell something for a dollar if it costs us three dollars to produce. We need to find creative ways to bridge the gap. As soon as we step outside farmers’ markets

to sell to restaurants or hospitals, we’re being asked to compete in a wholesale environment. We can’t afford to drop our prices if the economics don’t line up on the production side. It’s a challenge.”

Building customer relationshipsBuilding customer relationships

Matt and Deanna actively use social media – Facebook and Twitter – to build customer relationships and share their story. They share fun photos, healthy recipes and the Tregonings’ sense of humor, like a recent Facebook post about Hank, the “Crazy-Eyed” Jalapeno.

On a more serious note, Matt also writes a Sol to Seed Farm blog. In a recent post simply titled, A Farmer’s Perspective, he shared, “While academia, NGOs, non-profits, et al debate whether Organic or GMO will ‘feed the world,’ the farmers and ranchers producing that food must cope with the reality of economic viability on a daily basis. If you believe that organic prices are too high, you don’t understand the economics of farming. And if you believe that ‘conventional’ or non-organic food production is not as valuable, you don’t understand the economics of an industrial food system.”

Finding balanceFinding balance

Matt and Deanna love to farm, but they also plan to keep their off-farm jobs. It’s tough to deny a living wage with 401K plans and health insurance. So, the Tregonings are finding balance in their lives outside the bustling city with their hands in the dirt. They’ve vowed to keep their workweek to 13 hours a day.

“Living on the farm is a good balance,” says Deanna. “It’s not as stressful as my nursing job. As a health care provider, my role is to take care of people. Clinical medicine is so expensive and you don’t see many healthy people at a clinic. Our farm is all about providing nutritious food to get people on the right track towards healthy living. At the end of the day, that’s what matters most. When you buy from the farm it’s like getting a prescription for healthy, nutritious food.”

Ricky Adams, Northwest FCS Relationship Manager and Matt discuss sustainable growing practices

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New Seasons MarketNew Seasons MarketThree families and 50 friends got together 15 years ago to open a local grocery store in Portland. They envisioned a friendly, fun, neighborly store that would support local farmers and ranchers. From the freshest produce and quality meat, to a curated selection of cheeses and chips, the store would offer products from smaller producers and food artisans in the Pacific Northwest. Today, New Seasons Market has 15 stores and 3,000 employees in the greater Portland/Vancouver area.

Each New Seasons Market is designed and named after the neighborhoods they serve, like Happy Valley, Fisher’s Landing and Woodstock (soon at the corner of Woodstock and 45th). New Seasons carries everything from the essentials to the extraordinary based on the neighborhoods they serve and the relationships they cultivate with ranchers, farmers and vendors. Many of their products are organic or naturally grown, but they offer conventional products too.

We asked the team at New Seasons Market about the local foods movement and their role in the regional food system. Their approach and philosophy may surprise you. New Seasons is all about building partnerships with local farmers and ranchers. Their ultimate goal is to help these producers grow and be sustainable long term. They’re less

concerned about big corporate profits and more concerned about helping producers capture premium prices for the wholesome food they produce.

Producer partnershipsProducer partnerships

“We want a true, authentic partnership,” says Alan Hummel, Meat and Seafood Director. “Our customers have certain standards and small producers may not always understand that. Our job is to help educate and bring our partners along without threatening the confidence consumers have in us. Sometimes there’s not a lot of consistency at first. Small meat producers may not be able to grade out each animal. They only have so many to sell. So, we may get a small pork chop here and a big one there. But over time, we can work with these partners to produce a more consistent product without putting a lot of burden on them.”

New Seasons offers system pricing on their meat. Instead of basing meat prices on the cattle market, like most grocery stores, New Seasons will lock in a price for a certain period

Alan Hummel, New Seasons Market

of time. This gives producers time to produce a high quality product using sustainable practices important to New Seasons’ customers. Producers can also plan out fiscally every year without being at the mercy of the market. It’s truly a partnership.

“We’ll watch the market and have conversations with our partners,” says Alan. “Can we adjust prices down to be a little more competitive once their volume has increased? Or, do we keep prices consistent? Our pricing programs are typically a little above market and don’t fluctuate a lot. We have the same philosophy with our smaller fishermen. If they’ll catch a certain way, handle a certain way and deliver premium quality products we can offer above market prices to meet our customers’ standards.”

Choosing like-minded partnersChoosing like-minded partners

The produce market is rapidly changing and the number of local producers is increasing. More people are growing vegetable gardens and looking for ways to get into farming. Jeff Fairchild, Produce Merchandising Director, spends time talking to growers about the types of fruits and vegetables he’s looking for. He visits farmers’ markets to source products that will increase New Seasons’ selection. At any one time, 70 percent of New Seasons’ produce is locally grown in the Pacific Northwest. Choosing like-minded partners is the key.

“First, quality is absolutely critical to what we do – taste, freshness, value,” says Jeff. “Organic is important too. Then we look for partners who are using sustainable practices. Are they taking care of the land? Are they being socially responsible? How do they treat their labor? Last week we met with a group of potato growers who are planting in wetland bogs. They’re enhancing the wetlands, increasing fertility and decreasing pests. These are the stories we’re looking for. Our customers want to know the grower who raised their produce and why we’re buying from them. That’s the value we bring.”

Supporting Home Grown, local brandsSupporting Home Grown, local brands

If the grocery aisles could sing, you’d hear a chorus of a thousand

stories sung at New Seasons Market. There’s Tyler Long, a young Albacore fisherman in Charleston, Ore. You’ll find his name proudly displayed on the package. There’s

Jacobson Sea Salt (harvested on the Oregon coast) who is teaming up with Bee Local Honey and Quin Candy to offer sweet, salty treats. You’ll hear from Lucy De Leon, whose family migrated across the country working in agriculture before they opened a small restaurant in Portland. Today the De Leons are bringing their popular salsas to the retail market with a little help from New Seasons Market.

“Bring Your Recipe to Market” is a program offered by the Food Innovation Center at Oregon State University in partnership with New Seasons. Local food artisans bring in their ideas. Some have made it to packaging. Others are just in the concept stage. During the 12-week program they learn about food safety, compliance, ingredient labels and packing. Some may team up with a local producer for ingredients during the process. In the end, if they’re successful, their products will be introduced in New Seasons Market.

“We want to work with local producers and artisans who have a great idea and a passion for wholesome food,” says Chris Tjersland, Private Brand and Development Manager. “We’re here to nurture these businesses and help them grow. We may offer their products in one store or all 15 stores, depending on their capacity. We talk a lot about balancing passion with managed growth. There’s no race to the finish line here. Our goal at New Seasons Market is to cultivate good food for generations to come.”

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Chris Tjersland, New Seasons Market

Jeff Fairchild, New Seasons Market

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Country Natural BeefCountry Natural BeefThe story of Country Natural Beef is epic. Ranchers Doc and Connie Hatfield knew there had to be a better way to bring naturally raised beef to consumers. In 1984 they formed a consumer-driven cooperative with 14 like-minded ranching families in eastern Oregon. They planned to focus their sales efforts in the Portland/Salem market. The small venture didn’t require a lot of money back then. Good thing, because these ranching families were strapped. Each member chipped in a few good calves to get the effort started. Today, the Country Natural Beef co-op represents nearly 100 family ranches from Washington to Texas and the Hawaiian Islands. The co-op is 100 percent owned by ranching families who retain ownership of their animals from birth to plate.

John Wilson’s family has been raising cattle in Oregon since the 1800s. After graduating from the University of Oregon, he and his first cousin Jim Wilson, another fifth-generation rancher, formed Beef Northwest Feeders. The Hatfields approached them in 1996. Cattle raised for Country Natural Beef spend their first 14 to 18 months on pasture and rangeland. But, to ensure a consistent, year-round supply with limited resources, they needed someone to feed their cattle for the last 100 days. At the time, the small, naturally raised beef co-op was only processing 40 head of cattle per week.

“We liked the cooperative nature of Oregon Natural Beef, now called Country Natural Beef,” says John. “We shared their vision for creating a brand that would pass additional

revenue back to family ranches for long-term, generational sustainability. We also shared their commitment to caring for the land, water and wildlife habitat, with wide open spaces for ranchers and farmers.”

Growing alliancesGrowing alliances

The alliance between Country Natural Beef and Beef Northwest continues today, though on a much larger scale. Country Natural Beef will process 50,000 head this year. Beef Northwest is now a diversified agribusiness with three cattle feeding operations, two in Oregon and one in central Washington. They’re one of the Northwest’s largest suppliers of cattle to Tyson Foods in Wallula, Wash. and naturally raised cattle to AB Foods in Toppenish, Wash.

“The markets we’ve helped Country Natural Beef reach have been consumer driven,” says John. Everything goes back to the consumer. There’s a certain type of consumer who will spend more for local or grass fed beef. They can afford to spend the extra money. But, it would be very difficult to feed the world this way. With Country Natural Beef we’re trying to build partnerships between smaller ranchers and larger cattle feeders and packers to increase volume and make these products more affordable to consumers who want them.”

John Wilson,Beef NorthwestFeeders

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Consumer preferencesConsumer preferences

Country Natural Beef cattle are fed a healthy ration of grain, alfalfa and potatoes after being raised on grass. Beef Northwest uses by-products from regional potato processing plants, including cooked peelings, excess trim and french fries that miss certain specifications. Potatoes and other natural proteins provide a 100 percent vegetarian diet sought by Country Natural Beef consumers.

Consumer preferences for naturally raised beef have changed. From the original attributes of hormone and antibiotic free, standards have morphed to include environmental audits, animal welfare audits and even a small non-GMO feeding line for beef. To be successful in this niche market, producers must weigh the hidden costs.

“From our viewpoint, a producer going into this type of business has to do enough due diligence to identify the additional costs,” says John. “We’ve seen a lot of businesses in the protein sector fail because they didn’t recognize all the standards they’re required to meet. Doing an in-depth cost analysis of all the input factors is critical.”

Embracing changeEmbracing change

Country Natural Beef producers embrace their loyal customers and prospects. You’ll find these hard-working ranchers in urban grocery stores, like New Seasons Market, multiple times a year. They’ll be cooking samples and listening to customer feedback. They’re likely to share stories about life on the ranch and the rural communities they live in. More than anyone, this consumer wants to make the personal connection. They also want to know exactly how their food is raised and to what standards.

Sometimes niche markets can be fickle. What’s selling today may have a completely different market demand two years from now. It can be frustrating for people in production agriculture both strategically and philosophically. Some would argue that animal welfare audits or non-GMO threaten the beef industry. With certain consumers there’s no reaching status quo.

“Our job is to respond to consumer demands, even if these demands don’t represent all consumers in the market, says John. That’s why Beef Northwest formed an alliance with Country Natural Beef. We believe in joint ventures. We’re better at addressing the opportunities and challenges when we work together. Our experience with Country Natural Beef cattle that receive no antibiotics has raised our level of animal husbandry company-wide. We like to put our assets with other like-minded people to build a better product and find a better way. Over the years, this has been the key to our mutual success.”

Ranchers offer samples of Country Natural Beef

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Financing The Next Generationwith AgVisionHelping young, beginning and small Helping young, beginning and small

producers get started in business ensures producers get started in business ensures

a solid future for agriculture and rural a solid future for agriculture and rural

communities. Our AgVision program communities. Our AgVision program

is specifically designed to help these is specifically designed to help these

producers who may have difficulty finding producers who may have difficulty finding

financing. AgVision offers financing at financing. AgVision offers financing at

competitive rates with loan fee reductions competitive rates with loan fee reductions

plus plus education, technology wavers and education, technology wavers and

business management education.business management education.

If you’re 35 or younger, or if you’ve been farming for 10 years or less, the AgVision program is designed for you. Perhaps you’re a parent with sons or daughters who want to return to the operation. The AgVision program will help them establish credit and gain their independence.

AgVision Program BenefitsAgVision Program BenefitsAll loan types and sizes. Producers can finance real estate including loans to acquire a farm, ranch, timberland or additional acreage. AgVision financing also includes operating expenses, livestock and equipment purchases, or can be used to refinance existing debt.

Less restrictive underwriting standards. Because of age, early stage of business, or operation size, many producers do not have adequate capital and/or equity to secure competitive financing. Customers who may not qualify under normal loan programs may qualify under AgVision standards.

Preferred rates and flexible

terms. All qualifying loans receive preferred rates and/or flexible terms.

Reduced or waived fees.

While each customer and loan is unique, many AgVision customers qualify for a reduction in loan origination and appraisal fees.

Funds for management development and business tools.

Through the AgVision program producers also receive funds to improve their management skills. At the time of the loan, customers are given three $500 vouchers to use towards continuing education, Northwest FCS Business Management Center programs, and technology tools like computers or software.

Business management training. Educational programs include the annual Young and Beginning Producers Conference and financial and management workshops. These programs help AgVision customers increase their knowledge and build relationships with other producers.

One-on-one mentoring. Northwest FCS credit officers work closely with AgVision customers, helping them analyze their income and expenses as they make decisions for the future.

Talk to a Northwest FCS representative today to learn more about the benefits of our AgVision program.

If you’re 35 or

younger, or if you’ve

been farming for

10 years or less, the

AgVision program is

designed for you.

Northwest FCS AgVision customer Stuart Schuttpelz

11 | Nor thwest Farm Credit Ser vices

Business Management Center EventsNorthwest Farm Credit Services is committed to sharing industry knowledge and management lessons to help our customers make sound business decisions. We’ve invested in educational programs, industry insights and business tools to help customers enhance their management skills and support the transfer of leadership and management to the next generation.

Dates/Locations Conferences, Workshops and Symposiums

Nov. 18-19, 2014 Basic Financial WorkshopsTwin Falls, Idaho Understanding financial statements and analysis.

Nov. 19, 2014 Tree Fruit Producer SymposiumWenatchee, Wash. Trends in the fresh produce business and orchard values.

Nov. 19-20, 2014 Advanced Financial WorkshopsMt. Vernon, Wash. Managing growth and capital, profits, cash and risk.

Nov. 20, 2014 Tree Fruit Producer SymposiumHood River, Ore. Trends in the fresh produce business and orchard values.

Dec. 2, 2014 Global Influences, Local Impacts SymposiumTwin Falls, Idaho Breaking down complex global issues with insights for local producers.

Dec. 2-3, 2014 Basic Financial WorkshopsMt. Vernon, Wash. Understanding financial statements and analysis.

Dec. 3-4, 2014 Advanced Financial WorkshopsProsser, Wash. Managing growth and capital, profits, cash and risk.

Dec. 12, 2014 Dairy SymposiumKennewick, Wash. What dairies need to know about markets and risks.

Jan. 6-7, 2015 Basic Financial WorkshopsProsser, Wash. Understanding financial statements and analysis.

Jan. 7-8, 2015 Advanced Financial WorkshopsIdaho Falls, Idaho Managing growth and capital, profits, cash and risk.

Sept. 24-25, 2015 Basic Financial WorkshopsSalem, Ore. Understanding financial statements and analysis.

Featured Programs

Jan. 15-17, 2015 Family Business Succession SeminarPortland, Ore. Transitioning ownership and management to the next generation.

Feb. 10-12, 2015 Young and Beginning Producers ConferenceSpokane, Wash. Market trends, personal finance and family business basics.

Feb. 11-13, 2015 Executive Producers SummitSpokane, Wash. Managing risk through the cycles.

Find out more about BMC programs: northwestfcs.com/resources

Questions? Call: 866.552.9193 Email: bmc@northwestfcs.com

College ScholarshipsApplication Deadline March 1st

Northwest FCS promotes youth education through our college scholarship program. Scholarships are awarded annually to high school seniors, current college students and those pursuing graduate degrees. All scholarships are $2,000 each.

Customer Undergraduate Scholarships – awarded to sons and daughters of Northwest FCS customers

and employees. High school seniors and current college students will be selected based on school and community

involvement, scholastic performance and educational goals.

Customer Graduate Scholarships - awarded to sons and daughters of Northwest FCS customers and

employees. Graduate students will be selected based on their scholastic performance and post graduate career goals.

Land Grant University Scholarships – awarded to full-time undergraduate students seeking a degree in

agriculture, finance, business or related fields at Northwest land grant universities. Students must demonstrate a

commitment to agriculture, leadership and academic achievement.

Minority Scholarships – awarded to minority students studying agriculture, finance or business who have

a passion for helping others overcome bias and recognize different beliefs and values. Recipients are involved in

activities or committees that foster an environment where all have the opportunity to participate.

Visit northwestfcs.com/scholarships for eligibility,

selection criteria and more information.

Application deadline: March 1, 2015. Winners announced May 2015.

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Executive Producers Summit: Managing Through the CyclesManaging Through the CyclesFeb. 11-13, 2015 - Spokane, Washington

OverviewOverview

In today’s markets, managing volatility is one of the biggest challenges facing many agricultural businesses. National experts help you identify, prioritize and mitigate risks facing your operation, delivering practical tools and unique perspectives on successfully managing through the cycles.

Featured Speakers and Key TakeawaysFeatured Speakers and Key TakeawaysAg Trends and Economics that Matter – Dr. Dave KohlUnderstand the ‘Mega Trends’ influencing the future of global agriculture and what you need to know to stay ahead of the cycle. Focus on economic insights that affect your bottom line and the decisions you make every day.

Strategic Risk Management – Dr. Steven SlezakLearn to apply strategic risk assessment frameworks and identify new dimensions of risk in your business. Take home tools to develop a comprehensive risk management plan.

Ag Cycle Drivers and Outlook – Dr. Richard VolpeUnderstand the demographic and economic trends driving agricultural cycles, with a focus on current and future trends in consumer demand and food markets.

Managing Weather Risk – Dr. Eric SnodgrassLearn simple weather forecasting techniques and get the 2015 forecast. Also gain insights on how climate change may impact agriculture over the next 50 years.

Economic Outlook and Interest Rate Forecast – Dr. Ed SeifriedFocus on key indicators and applied information to make smart, informed decisions and learn the latest Wall Street economic trends affecting the future of your business.

Family Business Succession SeminarJan. 15-17, 2015 - Portland, Oregon

OverviewOverview

This interactive program covers strategies and proven processes to help families transition ownership and management from one generation to the next. Featured experts include Dr. Don Jonovic who brings more than 40 years’ experience working with family businesses in transition and Rich Thornton, former IRS Revenue Agent and 30-year tax partner for Moss Adams LLP.

Key TakeawaysKey TakeawaysStrengthen Relationships and Build a Plan - The succession process can strain family relationships. Learn effective ways to communicate and address conflict to ensure relationships remain strong, balancing individual, family and business needs. Build enduring succession plans that balance business and family success.

Financial and Legal Considerations - Understand the financial requirements and potential pitfalls surrounding succession, including retirement funding, business cash flow and family growth. Learn legal considerations and best practices for succession and estate plans, including options for funding and structuring buy-sell agreements.

Tax Planning and Entity Structure - Learn estate tax planning best practices and avoid common mistakes to ensure your plan minimizes taxes without surprise tax bills or unintended consequences.

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Production and sale of local foods has been a marketing

phenomenon for years. Consumers have gotten

accustomed to buying local foods at farmers’ markets,

farm stands and by subscribing to Community Supported

Agriculture farms (CSAs).

A substantial part of the value of

local foods is the “story” that goes

along with the food items—that

extra information about where the

food comes from, how it’s grown and

what special organic or sustainable

farming practices may have been

used. All that information makes the

farm product unique, which makes

for a higher price.

Food Hub SystemsFood Hub Systems

Increased consumer demand creates

the expectation for more local food

in more places, like restaurants,

grocery stores and even schools.

As local food production systems

have matured there has been an

expansion towards wholesale

markets in addition to continued increase in direct-to-

retail sales. Food Hubs can be seen as a local food system

solution for aggregating and distributing local foods.

The working definition of a food hub is quite broad in

scope. There are no minimum or maximum sizes. Nor is

there a prescription that a food hub has to be a for-profit

business. This allows the definition to include non-profit

entities or farmer cooperatives for that matter. One notable

characteristic that distinguishes a food hub from a produce

wholesaler is the mission intent expressed; that a food hub

has a sense of purpose to strength-

en producer capacity and increase

access to markets. Also, a food hub

sources food locally and regionally,

along with the story of the farm,

producer or even the production

methods. The story always stays

with the product.

The Farm Credit System is interest-

ed in how food hubs provide more

opportunities for farmers to sell

their products. Farm Credit institu-

tions have noted the increasing

importance of local foods as a mar-

keting channel for farm producers,

amplifying their presence beyond

direct-to-retail farmers markets,

farm stands, or CSAs. Beyond

providing more market access for

farmers, it is evident that food hubs

are effective in establishing a broader relationship between

a community and the agricultural producers that feed it.

This is good for farmers, consumers, communities, and the

future of agriculture.

15 | Nor thwest Farm Credit Ser vices

Local FoodsHit the Big TimeGary MattesonVP Young, Beginning, Small Farmer Programs and OutreachFarm Credit Council

USDA defines a Food

Hub as “a business or

organization that actively

manages the aggregation,

distribution, and marketing

of source-identified

food products primarily

from local and regional

producers to strengthen

their ability to satisfy

wholesale, retail and

institutional demand.”

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Understanding Food HubsUnderstanding Food Hubs

Understanding how the local foods market sector works is

important not just to farmers and food hub operators, but

also to lenders like Farm Credit who need to understand

where the risks are for the individual farmer, for each

business function in the value chain, and for the sector as

a whole. We expect that consumer driven demand for local

foods will continue to grow in economic significance for

farmers and in cultural significance to communities that will

also benefit farmers.

One way for Farm Credit to estimate the potential of

food hubs is to do a benchmarking study. A typical

benchmarking study collects actual financial results, as

well as operational measures such as how many miles

were driven by delivery trucks, or how many people

were employed. This information is compared to similar

businesses and then analyzed to determine a range of

performance. So the typical benchmarking study process is:

collect-compare-analyze.

Benchmarking StudiesBenchmarking Studies

The value of benchmarking rests in its ability to give the big

picture of the sector being studied, as well as very detailed

information about how each food hub business might be

able to improve financial and operational performance.

Farm Credit’s Food Hub Benchmarking Study for the year

2013 shows that our sample of 49 food hubs across the

country average $1.65 million in sales, source their local

products within 500 miles and about 20 percent sell only

organic products.

53 percent of respondents were organized as a not-for-

profit business and employed an average of five employees.

Grocery stores and restaurants accounted for 65 percent of

sales by food hubs—showing that local foods are moving

into wholesale distribution.

The hope is that additional studies on the Food Hub

industry will not only provide very valuable information to

food hub managers, but will be a tool to utilize when such

businesses are searching for financial assistance or a loan.

A benchmarking study allows business planning to

compare to actual, real results from the industry and

pinpoint how any particular food hub compares to its

peers. Food hub operators, local foods consumers, and

Farm Credit will all benefit from a better understanding of

the nature of how the market for local foods can expand

through wholesale channels.

Across Market SegmentsAcross Market SegmentsNationally, 33 percent of hubs are farm-to-business

operations bringing local food differentiation into wholesale

supply chains serving grocery and food service markets.

Another 28 percent are hybrid food hubs, supplying

wholesale as well as farm-to-consumer markets, such as

direct delivery to large-scale corporate wellness programs.

Food Hub FactsFood Hub Facts• Approximately 222 regional food hubs operate in the

United States.

• Food hubs averaged more than $3 million in 2012

revenue.

• 62 percent of food hubs surveyed in 2013 started up

within the last five years.

• Half of food hubs are for-profit enterprises.

• Food hubs are profitable; more than half operate

independently of grant funding.

Source: “Findings of the 2013 National Food Hub Survey,” Michigan State University.

17 | Nor thwest Farm Credit Ser vices

Protecting Your SecurityWhen You TravelThe year-end holiday season and travel are a package deal in America. For an estimated 100 million Americans, the holidays include a trip at least 50 miles from home. Whether you’re traveling cross country or around the globe, don’t let your guard down because criminals are hoping you will.

Personal electronic devices are a prime target for cyber-criminals. Before departing on your trip, ensure all personal elec-tronic devices have been secured with a password. Remove all sensitive data from your device, delete browser history, cookies and stored passwords and always make sure the device is locked after use. Carry the device with you or leave it with a trustworthy family member or friend if you need to step away. It only takes seconds for a criminal to pick up your device, attack and infiltrate your confidential information. A quick trip to the food court could result in compromised passwords, credit card numbers, bank account numbers, etc.

Additionally, always be aware of your surroundings while using devices in public places. A common practice used by crimi-nals is shoulder surfing. Shoulder surfing is where a seemingly harmless person observes your information while you are using your device. Without noticing, the shoulder surfer can steal a great deal of information without touching your device. Always be aware of the people around you as well as what is being displayed on your device. If the information is personal or confidential make sure you view it in a secure environment with no possibility of shoulder surfing.

Free wireless Internet hot-spots are always in demand when traveling. Connecting to a wireless hot-spot is a great way to burn layover time or finish that last minute gift shopping. It’s important to remember that public/free wireless hot-spots are not secure networks. Connecting to these hot-spots makes your device susceptible to malware and cyber-criminals that can capture your confidential information. In order to minimize these risks, purchase a Virtual Private Network (VPN) app or use your cellular 3G/4G connection on your device instead of public Wi-Fi when possible.

The year-end holiday season should be a joyous time spent visiting and cherishing friends and family. Avoid the Scrooge effect criminals can cause by using security best practices when traveling.

10 Traveling Security Tips10 Traveling Security Tips• Before traveling, securely backup your device and keep the backup in a safe place.

• Only take the electronic devices needed. Leave the rest at home.

• Be careful about how much you post on social media about being away.

• Always set a password on every device and change it every few months.

• Always lock all devices when not in use.

• Always log out of websites after use and close the browser.

• Always keep anti-virus software updated on your devices.

• Use a credit card over a debit card.

• When shopping online, ensure the website URL starts with HTTPS.

• Check your accounts regularly for any unauthorized transactions.

IDAHORobert Ball HamerJeff Bartschi MontpelierCody Bingham JeromeJeff Blanksma, Jr. HammettAdrian Boer JeromeRay Carlson BlackfootConnie Christensen BlackfootCade Crapo St. AnthonyRon Elkin BuhlCarl Ellsworth LeadoreBruce Foster AberdeenDavid Funk HansenLeRoy Funk BurleyBrent Griffin RupertJackie Hillman HamerBrian Huettig HazeltonKen Koompin American FallsBrent Lott Idaho FallsKaren Lustig CottonwoodMarty Lux NezperceDan Mader GeneseeRay Matsuura BlackfootKyle Meyer RathdrumRon Mio FruitlandGreg Moss KetchumKirk Nickerson HoweLisa Patterson HeyburnGreg Payne CaldwellErick Peterson MoscowRoyce Schwenkfelder CambridgeKirt Schwieder Idaho FallsScott Searle ShelleyTodd Simmons TerretonRobert Swainston PrestonRyan Telford RichfieldBernie Teunissen CaldwellDale Thomas GoodingCamellia Thurgood NampaJustin Tindall BruneauRitchey Toevs AberdeenSteven Toone GraceJames Udy American FallsTodd Webb DecloShane Webster RexburgPete Wittman LapwaiMatt Wolff Boise

73 Fort Hall Avenue, Suite AAmerican Falls, Idaho 83211(208) 226-1340

370 North Meridian Street, Suite ABlackfoot, Idaho 83221(208) 782-3800

1408 Pomerelle Avenue, Suite BBurley, Idaho 83318(208) 678-6650

501 King StreetCottonwood, Idaho 83522(208) 962-2280

2225 West Broadway, Suite AIdaho Falls, Idaho 83402(208) 552-2300

2631 Nez Perce Drive, Suite 201Lewiston, Idaho 83501(208) 799-4800

16034 Equine DriveNampa, Idaho 83687(208) 468-1600

102 North State, Suite 2Preston, Idaho 83263(208) 852-2145

1036 Erikson DriveRexburg, Idaho 83440(208) 656-2100

815 North College RoadTwin Falls, Idaho 83301(208) 732-1000

MONTANALes Arthun WilsallDavid Bell Great FallsBill Bergin MelstoneMark Bergstrom BradyAdam Billmayer HogelandBart Bitz Big SandyRyan Bogar VidaKeven Bradley Cut BankSandy Carey BoulderTom Cheetham RedstoneCalvin Danreuther LomaNels DeBruycker ChoteauVicki Eggebrecht MaltaWarren Flynn TownsendConni French MaltaJoe Fretheim ShelbyScott Glasscock AngelaBeth Granger Great FallsGreg Grove MoccasinChad Hansen DillonCraig Henke ChesterCourtney Herzog RapeljeDale Hirsch KinseyCraig Iverson WinnettAlan Klempel BloomfieldSteve Lackman ForsythTim Lake PolsonBryan Mussard DillonCorie Mydland JolietKen Olson RicheyTracey Pearce SheridanRobert Peterson HobsonTrudi Peterson Judith GapShawn Rettig RudyardDave Sattoriva HinghamNancy Schlepp RinglingKim Skinner HallCarmie Steffes PlevnaSteve Swank ChinookKurt Swanson ValierDuane Talcott HammondDale Tarum RichlandBob Taylor DentonKelly Toavs Wolf PointMark Tombre SavageMiles Torske HardinBrian Tutvedt KalispellLarry Tveit, Jr. FairviewBruce Udelhoven WinifredMike Wallewein ConradSteve Wood Sheridan

Tech Plaza, Building 1, Suite 3003490 Gabel RoadBillings, Montana 59102(406) 651-1670

1001 West Oak StreetFarm Credit Building, Suite 200Bozeman, Montana 59715(406) 556-7300

519 South Main StreetConrad, Montana 59425(406) 278-4600

134 East Reeder StreetDillon, Montana 59725(406) 683-1200

501 1st Avenue SouthGlasgow, Montana 59230(406) 228-3900

700 River Drive SouthGreat Falls, Montana 59405(406) 268-2200

1705 US Highway 2 Northwest, Suite AHavre, Montana 59501(406) 265-7878

120 Wunderlin Street, Suite 6Lewistown, Montana 59457(406) 538-7737

502 South Haynes AvenueMiles City, Montana 59301(406) 233-3100

3021 Palmer Street, Suite BMissoula, Montana 59808(406) 532-4900

123 North Central AvenueSidney, Montana 59270(406) 433-3920

OREGONMonet Allen Montague, CAReed Anderson BrownsvilleRoben Arnoldus CoveGlenn Barrett BonanzaJohn Boyer HainesGreg Brink JosephRon Brown Milton-FreewaterGeorge Bussmann SixesWarren Chamberlain ValeJason Chapman Klamath FallsTim Dahle The DallesDan Dawson RoseburgMike DeWall HarrisburgSusan Doverspike BurnsRod Fessler MadrasTom Fessler Mt. AngelJoe Finegan CorneliusBruce Ford HermistonJavier Goirigolzarri RoseburgDennis Harmon Grants PassMatt Insko LaGrandeKenneth Jensen ValeKyle Kenagy RoseburgJeremy Kennel MonmouthAlan Keudell AumsvilleDiane Kunkel PortlandLeland Lage Hood RiverDan C. Lewis GastonSharon Livingston Mt. VernonBill Martin RufusScott McClaran JosephRon Meyer TalentGreg Myers TillamookDavid Neal TangentMary Olson MonmouthLarry Parker HelixAlan Parks Silver LakeAmy Doerfler Phelan AumsvilleJohn Reerslev Junction CityStephen Roth BrothersShannon Rust EchoMarc Staunton MerrillAnna Sullivan HerefordSteve Walker StanfieldEric White Nyssa

3370 10th Street, Suite BBaker City, Oregon 97814(541) 524-2920

2345 Northwest Amberbrook Drive, Suite 100Beaverton, Oregon 97006(503) 844-7920

650 East Pine Street, Suite 106ACentral Point, Oregon 97502(541) 665-6100

2911 Tennyson Avenue, Suite 301Eugene, Oregon 97408(541) 685-6140

300 Klamath Avenue, Suite 200Klamath Falls, Oregon 97601(541) 850-7500

308 Southeast 10th StreetOntario, Oregon 97914(541) 823-2660

12 Southwest Nye AvenuePendleton, Oregon 97801(541) 278-3300

3113 South Highway 97, Suite 100Redmond, Oregon 97756(541) 504-3500

2222 Northwest Kline StreetRoseburg, Oregon 97471(541) 464-6700

650 Hawthorne Ave. S.E., Suite 210Salem, Oregon 97301(503) 373-3000

3591 Klindt Drive, Suite 110The Dalles, Oregon 97058(541) 298-3400

WASHINGTONDave Allan WapatoJeff Bosma OutlookRuss Byerley TouchetRoger Canfield OlympiaBill Clark ChelanMike Cobb EphrataBill denHoed GrandviewRichard DeRuwe DaytonFrank DeVries LyndenScott Eschbach YakimaPatrick Escure QuincyKevin Filbrun PascoSteve Fish Sitka, AKStacy Gilmore PascoAlan Groff WenatcheeLori Hayles PascoIan Jefferds CoupevilleJim Kile St. JohnCris Kincaid PullmanJim Klaustermeyer, Jr. OthelloDave Klaveano PomeroyTristan Klesick StanwoodChris Kontos Walla WallaSteve Krupke ReardanDavid Lange ColfaxJosh Lawrence Royal CityPoppie Mantone BingenDan McKay AlmiraAlan Mesman Mt. VernonJohn Miller ToledoPat Murphy ChehalisBrian O’Leary SeattleEric Olson Anchorage, AKJeff Raap EllensburgSara Rolfs WenatcheeJason Salvo SeattleDerek Schafer RitzvilleJeff Schilter OlympiaDanielle Scrupps RitzvilleBen Smith SequimJerry Smith Benton CityJim Stone LakewoodLori Stonecipher Walla WallaMark Tudor GrandviewJake Wardenaar Royal CityAndy Werkhoven Monroe

265 East George Hopper RoadBurlington, Washington 98233(360) 707-2353

629 South Market BoulevardChehalis, Washington 98532(360) 767-1100

224 North Main StreetColfax, Washington 99111(509) 397-2840

1501 East Yonezawa BoulevardMoses Lake, Washington 98837(509) 764-2700

9530 Bedford StreetPasco, Washington 99301(509) 542-3720

2157 North Northlake Way, Suite 120 Seattle, Washington 98103(206) 691-2000

1515 South Technology Boulevard, Suite BSpokane, Washington 99224(509) 340-5600

2735 Allen RoadSunnyside, Washington 98944(509) 836-3080

1 West Pine StreetWalla Walla, Washington 99362(509) 525-2400

667 Grant Road, Suite 1East Wenatchee, Washington 98802(509) 665-2160

1360 North 16th AvenueYakima, Washington 98902(509) 225-3200

advisors and locations HeadquartersP.O. Box 2515, 1700 S. Assembly St.Spokane, Washington 99220-2515509.340.5300 | northwestfcs.com

local

yields Fall 2014 | 18

P.O. Box 2515Spokane, Washington 99220-2515

New address?Please notify your local Northwest FCS office.

OUR CLASSROOM COVERS FIVE STATES

Northwest Farm Credit Services employees live and breathe agriculture. We’re immersed in the industries

we serve and work hard to stay on top of changes. Fact is, though, ag is so dynamic, the education never

stops. We closely monitor the latest industry trends and are eager to share our insights, through customer

seminars, workshops, and a variety of online tools.

Visit northwestfcs.com/resources to learn more.

Northwest FCS Vice President Michael Stolp presenting at a customer seminar

This institution is an equal opportunity provider and employer.