diy greenhouse

Volume 9, Issue 2 A P U B L I C A T I O N O F M I D A T L A N T I C F A R M C R E D I T LEADER I N T H I S I S S U E 4 6 8 10 12 13 14 16 17 18 Future Farms Dare to be Different: An Interview with Cheryl Cook The Farmer’s Guide to the Galaxy: Farmsite Technologies Forging A New Path: Walnut Springs Nursery New Ideas Welcome: Frey Dairy Farms, Inc. Building Your Dreams Photography Contest Scholarship Winners Annual Meeting Wrap Up Election Results Advice For Future Farmers NOTE FROM TH E PRES I DENT “The best way to predict the future is to invent it.” —Alan Kay, Computer Visionary Event Schedule W ho hasn’t wished for a crystal ball at some point in their lives, wondering what the future held for them and their farming operation? If you sat in on any of the management meetings held at Farm Credit, you’d soon realize that one of our primary job duties is as “fortune teller.” So many of our discussions focus on predicting the future—trying to determine which way interest rates will be moving in the next 12 months, wondering what new services our members will need next year. Our job requires that we constantly look into the future, trying to prepare for it so that we can continue to serve our membership. Of course, I don’t have to tell a group of agriculturalists what it’s like to predict the future! I know that your livelihood depends on making an educated guess as to what grain will be selling for in a month, or what interest rates will be this time next year, or whether we’ll have the perfect amount of rain this summer. Farming, like so many occupations, is very much a matter of preparing for the worst and hoping for the best. In this issue, we’ve focused on the future of farming in general. We’ve highlighted members from a variety of industries: a Pennsylvania dairy farmer who reads the latest research in the field and adjusts his management practices accordingly; a member on the Eastern Shore who is distributing a line of GPS tractors; and a nursery in Maryland that uses an environmentally friendly system that recycles rainwater to hydrate the plants. None of these members have a crystal ball either, but they’re willing to take some risks to stay at the forefront of their respective fields. I know that there’s no one path for future success. It is up to each of us to find our own path, and to follow it and make adjustments as necessary. At MidAtlantic, we keep our eyes focused on our ultimate goal: to be a preferred lender in our region, serving rural America. If you attended one of our recent stockholder meetings (highlights on page 16), you know we’ve had an extremely successful four years. I think we’re in a strong position for the future, as well. Speaking of the future, we’ve just completed our annual director and nominating committee election, during which you vote for the people you want to lead your cooperative in the future. The results of the election are printed on page 17. I know one thing about the future: Farm Credit is going to be here for you, no matter what it holds. If you’re planning your farm’s future—whether that means a new facility, new equipment or even a new property—please give us a call. We’d love the opportunity to help you prepare for whatever the future may hold. June 11-12 16-19 Event DelMarVa Chicken Festival Kempton Country Fair Place Salisbury MD Kempton PA July 5 19-22 20-24 22-31 23-31 24-31 26-31 27-29 29-Aug 1 30-Aug 6 31-Aug 6 Event Holiday Baltimore County 4-H Fair Plainfield Farmers Fair Delaware State Fair Cecil County Fair Lebanon Area Fair Kimberton Community Fair PANTS (Penn Allied Nursery and Trade Show) Harford County Fair Washington County Ag Expo Carroll County 4-H/FFA Fair Place MAFC offices closed Timonium MD Stockerton PA Harrington DE Fair Hill MD Lebanon PA Kimberton PA Ft. Washington PA Bel Air MD Sharpsburg MD Westminster MD Aug 2-7 2-7 7-14 11-15 13-14 16-21 17-19 22-28 23-28 Event Goshen Country Fair Schuylkill County Fair Howard County Fair Carbon County Fair Bel Air BBQ Bash Kutztown Fair Ag Progress Days West End Fair Elizabethtown Community Fair Place West Chester PA Summit Station PA West Friendship MD Palmerton PA Bel Air MD Kutztown PA Rock Springs PA Gilbert PA Elizabethtown PA Sept 6 15-17 16-18 17-25 22-24 25 Event Holiday Solanco Fair Oley Valley Community Fair Great Frederick Fair West Lampeter Community Fair Legacy Chase at Shawan Downs Place MAFC offices closed Quarryville PA Oley PA Frederick MD Lampeter PA Hunt Valley MD Bob Frazee President MidAtlantic Farm Credit mafc.com • Volume 9, Issue 2 • 3 Dare to Be Different by Al Schramm For many farms, conventional farming schemes may not be the most profitable options for the years ahead. But new opportunities abound. Farm Link’s day-long 10th Annual New and Beginning Farmer Workshop outside of Harrisburg attracted about 100 young farmers eager to pick up on new ideas and techniques. P ennsylvania Farm Link, a public/private consortium founded to promote and preserve successful family farming, recently held their 10th Annual New and Beginning Farmer Workshop in Harrisburg. Although the focus was on the Keystone state, the opportunities discussed are applicable to the entire midAtlantic region. This year’s keynote speaker was Cheryl Cook, Pennsylvania Deputy Secretary of Agriculture for Marketing and Economic Development. Her message was thoughtprovoking, and Pennsylvania Deputy Secretary her outlook of Agriculture, was anything Cheryl Cook but gloomy. An Industry in Flux The trend toward fewer and larger farms throughout the region will continue, sharpening the competition for markets among those farms pursuing conventional operations. In the years ahead, it will become increasingly more difficult for small farms dedicated to traditional produce to remain profitable. A Cornell University study of the nation’s dairy industry, for example, predicts a decline in the number of dairy farms of up to 85 percent by 2020. Continued growth of milk and cheese demand, as well as increased milk production per cow, are anticipated by the study. The bulk of future milk production, however, will be concentrated in far fewer and much larger enterprises. Similar trends are projected to impact grain production. Cook, with a background in law and in agricultural development and marketing, urges farmers—particularly small farmers—to think innovatively, to make new opportunities for themselves, and to remember: to be successful, farming must be treated as a business, not as a hobby. “The fundamental thing for the small farmer to do to ensure success,” Cook stresses, “is to develop a structured business plan and to follow it. Start thinking less like a farmer and more like an entrepreneur.” Back to Basics “In many ways, the farm products market is more diverse now than ever,” Cook explains, “but much of the opportunity is non-traditional. We need to look to new marketing approaches, and to adding value to basic commodities. The key is to break the mold of conventional thinking and to find a niche that your farm can supply. There are growing markets that are being underserved. Rightly or wrongly, there are consumers worldwide who prefer commodities that have not been genetically modified, and that creates a market opportunity even as the governments wrangle over sound science. BSE and other ‘hot-button’ news stories fuel the growth of organics and heirloom varieties.” Organic produce is currently the fastest growing segment of Pennsylvania agriculture, with horticulture in second place. Specialty produce targeted to various ethnic populations is also gaining swiftly in popularity, particularly in light of the MAFC region’s proximity to the large and growing ethnic populations in Washington, Baltimore, Wilmington, Philadelphia and New York. “Remember,” Cook admonishes, “we’re 3,000 miles fresher than California.” Adding Value “Direct marketing and valueadded processing can give farmers a chance to share in a far larger part of the fifty cents from every farm-product dollar that middlemen now pocket,” Cook notes. Value-added specialties usually sell for premium prices to customers who are willing to pay more for produce that meets their special desires. The downside, however, can be the difficulty of identifying and targeting photos by Al Schramm 4 • Volume 9, Issue 2 • mafc.com your niche market, and then of meeting its demands. Increased regulation and higher labor costs are often the result of producing value-added goods on the farm, but the increased profits they earn can make them well worth the inconvenience. Value-added farm products can be as elaborate and as laborintensive as farm-made cheeses, soaps, jams or jellies, or they can be as simple as a “pickyour-own” field of organic fruits and vegetables. Products can be sold directly off the farm or through farmers’ markets or other retail outlets. Finding Your Niche “Dare to dream,” Cook smiles. “Find something you really love to do, and then work to find the ways to turn that dream into a viable, marketable product and stake your claim. Talk to your local extension agent, to the state or county small business development office, check out the customers and sellers at local farm markets.” The best market research often begins with just asking questions. Pay close attention to what customers are asking for and your battle is half won. More Information on Pennsylvania Farm Link Pennsylvania Farm Link puts a primary focus on Pennsylvania farming, but Farm Link offers a wide range of beneficial programs, workshops and seminars that are of value to farmers in the surrounding states as well. Topics of seminars and workshops include farm finance and taxes, farmland preservation, management techniques, insurance primers, passing the farm from one generation to the next, and other areas of contemporary interest to the farming community. For more information about Farm Link’s programs, log on y to pafarmlink.org. Serving an Underserved Market: Two Case Studies Cheryl Cook says the key to farming in the future will be to “break the mold of conventional thinking and find a niche that your farm can supply.” Here are two case studies of farms that have followed that advice. As you read these, you may notice that both of these operations market their products on the farm; for more information on direct marketing or agritourism ventures, please refer to The Leader Volume 9, Issue 1. Back issues of The Leader can also be found on our website. Some Like It Hot James Weaver put up a single greenhouse and started looking at farming in a whole new light. For Weaver and his family, trial and error revealed product opportunities that may have remained hidden but for his strong talent for marketing innovation and his willingness to try new ideas. In the 1980’s Weaver started growing hot peppers for his roadside stand. The peppers caught fire, and he began hosting a two-day hot pepper festival on his farm to promote his products. He added new varieties. Heirloom tomatoes, pumpkins and other “novelties” were added as the operation expanded. The festival became so popular that it had to be relocated to a public park near his farm. Weaver operates six greenhouses and produces 90,000 transplants each year. He grows more than 200 varieties of hot peppers, 40 varieties of heirloom pumpkins and many types of heirloom tomatoes. In addition, he offers 450 varieties of vegetables set aside for “pick-and-pay” customers who come from all over central Pennsylvania. The hot pepper festival? It has grown so popular that it now draws as many 8,000 pepper lovers to the park every autumn. For more information about the Hot Pepper Festival, log on to their website: pepperfestival.com. Soap Bazaar Wanda Boop and her husband Preston bought a trailer-load of goats almost as a lark. Wanda had a strong background in crafts and herbals that she brought to manufacturing her own line of goat-milk soaps, salves and balms. The goats, a mixed bag of mostly mixed breeds, were a perfect match for Briar Patch Organic Farms. A supplier of certified organic feeds, vegetables, eggs, mulch and goatmilk based products, as well as a breeder of Maremma sheep dogs, the Boops have run as many as 600 head of goats, including large Boers. Boop and her dependable Maremma helpers keep a herd of about 100 goats and use their milk to produce a series of products that she sells both at the Lewisburg Market and off the farm. Boop also markets goats for meat. At last count, Boop is making more than twenty varieties of goat-milk soaps. She also produces some cheeses and a specialty fudge. Other organic farm produce includes a wide list of fresh and dried herbs, free range eggs and a variety of organic vegetables. For more information about the farm, log on to: briarpatchfarms.com. mafc.com • Volume 9, Issue 2 • 5 Farmer’s Guide to the Galaxy by Al Schramm Global Positioning Satellites have made navigation at sea a simple matter, day or night. Now they’re hard at work over the farm field. Both William Starkey and Rebecca Adams are in the cab of the Allis, but neither is steering the tractor as it goes about its task with unprecedented accuracy. It is being controlled by an on-board system that links with satellites 12,000 miles above it. T he art of agriculture hasn’t changed much since humans first planted seeds in the soil. The science of agriculture, however, has advanced to the point where some developments now approach the fantastic, creating what seems to be a scene from the future. Scott Quinn is an agronomist whose company, Farmsite Technologies, provides a wide range of agricultural support services that offer farmers a way to improve their operations and increase both yields and profits. Many of those services use space technology to benefit some very earthbound activities. Sampling to adjust soil chemistry, applications management, leveling, field preparation, planting, cultivating and harvesting— indeed, every farm operation can be made more accurate and faultlessly repeatable by using high-precision GPS tools. Data Harvest But it is not just the hardware that makes the difference. Employing the specialized agricultural software that Quinn installs for his customers, Farmsite’s agricultural management systems can give farmers better tools to increase yields and profits, and also to keep track of every operation more closely and more easily than ever before. That, alone, is a major benefit in these times of increasing ecological awareness. The systems can provide full accountability and detailed audit trails for stock genealogy, crop histories, pesticide and herbicide applications, nutrient management and other areas of growing regulatory attention. “A number of farmers are still resistant to the kind of technology that can save them a lot of money,” Quinn notes. “They feel the learning curve and the costs are too high. However, I can almost always put together a system that will pay its way, and be easy to learn and use effectively as well. You don’t have to be a computer guru to use these systems.” The software systems Quinn installs make best use of desktops, laptops and even hand-held PDAs to make available the full flexibility of in-thefield to in-the-office integration of all the farm’s data needs, as well as linking with various types of automated farming equipment when desired. Look, Ma, No Hands Quinn’s newly formed Ag Technology Group is presenting an especially impressive array of new farming technologies to farmers throughout the midAtlantic region. One system, Auto Farm™, is a large investment that can be recouped in a relatively short time through greatly increased efficiency. The Auto Farm system is particularly suited to large farms with extensive crop fields. William Starkey, chairman of Starkey Farms in Galena, Maryland, and partner with Quinn in Ag Technology A sign of the times. GPS technology adds up to “one giant step” for farming. Group, put an Auto Farmequipped Agco Allis through its paces for The Leader. “With this system,” Starkey declares, tapping commands on the touch screen mounted in the cab, “there are no ‘guess rows,’ there are no overlaps or underlaps when spraying, no doubts about your accuracy at all. Once you set it, the guidance 6 • Volume 9, Issue 2 • mafc.com photos by Al Schramm William Starkey of the Ag Technology Group stands on a tractor fitted with the Auto Farm guidance system. Two disks on the cab roof are part of an antenna system that links the on-board computer to satellites. When sampling, Quinn employs a simple PDA that links to his GPS equipment on the ATV. The data is later downloaded to a computer system for detailed analysis and mapping of nutrient, moisture and soil chemistry contours. Scott Quinn on a GPS-equipped ATV he uses for his field work. The GPS gear permits him to return to precisely the same sampling spot, as well as to create a detailed soil analysis map of the field in which he is working. MAFC’s Rebecca Adams with Scott Quinn in a wheat field. They can fix their location in the Galaxy to within a few inches. is dead accurate—more accurate, really, than a lot of experienced drivers. You can put a fairly inexperienced man in the cab and not worry that he’s going to wander around out there and trash your field.” Indeed, the positional accuracy is less than an inch; it is so accurate, in fact, the system can be used to lay drip tapes and then come back later to cultivate the rows without fear of damaging the irrigation installation. Used to track planting, the guidance at harvest time is accurate enough to eliminate crop damage from mistracking, even when harvesting very fragile crops—with the added benefit of reduced tension and worries for the farmer during picking. “You can work at night as well as during daylight, and fog doesn’t shut you down, either. You get the same accuracy regardless of visibility,” Quinn chimes in with a grin. “Whatever you’ve got to do in your fields, this system can help you do faster, easier and more efficiently than you can do without it. That sounds like a mere boast,” he laughs. “But I’ll stand by it. It really is that good, and that reliable.” Bringing It All Down to Earth Clearly GPS guidance and auto-steering technologies are not tools for every farm. But the underlying technology has applications for farms of every size. Even more than the gollygee-whiz hardware, it is the software systems and on-site services Farmsite provides that can add up to increased farm profits—precise soil analyses, tightened applications management and detailed crop monitoring can increase yields of just about any field crop on just about any farm. “Tell me the size and type of your operation, and I will put together a system to match your needs that will pay for itself in the first year,” Quinn points out. Quinn’s services are provided as a consultant, on an asneeded basis. “Good farm management software is an important asset to managing farm finances at every level,” Becky Adams, MAFC account executive points out. “I would say more farms are now using computers instead of the old-fashioned ledger book, but having structured, agricultural software, set up specifically to meet each farm’s individual needs, that is another matter. Scott’s a farmer at heart,” she grins. “He speaks the language. He appreciates what is needed to turn profits in today’s competitive markets.” Meanwhile, Bill Starkey is lounging on the step of the Allis, looking dreamily at the horizon over the long, orange hood. “Yes, sir, there really is something new under the sun,” he says with a wink, before swinging back up into the cab to fire up the big tractor for another pass. For more information about Farmsite Technologies and Scott Quinn’s products and services, log on to farmsite.com. y mafc.com • Volume 9, Issue 2 • 7 Forging A New Path by Jean Paffenback A family nursery uses best practices to build their business. The bright pink blooms on these New Guinea Impatiens will be “pinched” (removed) to coax even more growth and flowering. A mid the professional awards gracing the main office reception area of Walnut Springs Nursery in Glenwood, Maryland is a framed inspirational message to “follow your dream.” Al Smith, founder and CEO, did just that 30 years ago when he opened the nursery. He continues to live the dream every day as he and his son Cort, president, perfect a vision of a family-run business where customer service and operational efficiencies are the main themes. Less is More When the Glenwood nursery opened in 1994, it was actually the second Walnut Springs location, the first one enjoying a successful reputation in West Friendship, Maryland since 1964. “Two locations means two of everything,” Al says, citing the office and nursery equipment necessary for both operations, not to mention the personal time commitment, and he eventually agreed to Cort’s urgings to consolidate to one location. While swayed by his son’s number crunching, which proved that a consolidation would not jeopardize profits, the elder Smith ultimately wanted to spend more time with his family and felt it important that they spend more time with theirs. His two sons, Cort and Burke, vice president; daughter September, secretary-treasurer; son-in-law Mike Dalton, sales; and nephew David Ahlquist, general manager, lead active lives in addition to their roles at the nursery, and Al didn’t want it to consume them. MAFC account executive Bill Borsa credits Al’s enlightened work ethic as the reason so many of his children followed him into the family business: “A challenge in agriculture today is bringing family members into the business and transferring enthusiasm. The Smiths are an example of how it can work.” Once the decision was made, the Smiths moved all operations, equipment and plant material to the Glenwood location in one year. Welcome to Walnut Springs Nursery. Cort and Al Smith (left and center) behind the front office desk with MAFC account executive Bill Borsa (right). DIY Greenhouse Today Walnut Springs sits on 100 acres with the option to expand onto an additional 100 acres across the street that they recently purchased. The nursery boasts seven acres of growing space and 42 active greenhouses; the main office, irrigation pond, chemical rooms for mixing fertilizer, delivery truck fleet and even an employee fitness facility, which was previously the office, share the premises. It’s quiet this Saturday morning in early March, but already the busy spring season has begun, with employees having doubled from the year-round crew of 50 to the March-May/AugustOctober seasonal team of 90. Between them, they will pot 2.5 to 3 million plants and deliver up to 100,000 daily to the wholesale nursery’s clientele of landscape contractors and garden centers. To ensure that each plant receives the proper care, Walnut Springs observes a six-range system, where a team of six supervisors and an assistant are each assigned a 45,000-square foot photos by Jean Paffenback 8 • Volume 9, Issue 2 • mafc.com range (slightly more than an acre) to maintain. Offering 140,000 square feet of growing space, or more than three acres, is the “big greenhouse,” a structure Al designed. Sheltering one million plants, it consists of ten 40x350-foot greenhouses connected together with a center lean-to (aisle) running its 530-foot length. Al specified openings between every other greenhouse, enabling delivery trucks to drive down the opening to the center lean-to for convenient order pick-ups; the big greenhouse can be entered at each end of the center lean-to as well. Control panels allow different temperatures and climate conditions to be maintained in each greenhouse, a must-have for cultivating 53 varieties of annuals each spring. “Our customers can it was completed and pressed into service for the spring growing season. Al estimates that they saved $500,000 by designing and building their own greenhouse. “Al’s approach to the greenhouse project is indicative of his methodical approach to the whole business. He gathers intelligence, formulates a plan, executes the plan and continues to monitor it once it’s in place,” says Bill Borsa. Even details such as how to occupy employees during the off-seasons were addressed in the fabrication of the greenhouse. For instance, polyethylene was chosen for its affordability over glass to cover the greenhouse, and when it comes time to replace it every four years, employees can do it. The Smith’s can-do attitude is evident in the main office as well, designed by Cort and com- Technology is an important part of the operation. For accounting operations, September selected an application by Doane Software for its nursery-specific functions. She estimates that there are 20 computers in the main office, and anticipates that another upgrade won’t be necessary for several years. Behind the reception area wall of the main office is the driver’s station. There, stacked cubbyholes offer convenient niches to stow maps and cell phones, and a computer for accessing adcmap.com has been a welcome addition for the delivery crew. A user-friendly wall map of Walnut Springs’ 50-square mile sales area pinpoints delivery locations that are color-coded to differentiate landscape contractors and garden centers. As an additional client convenience, Walnut Another user-friendly tool is the wall-mounted weekly schedule Cort developed to provide vital at-a-glance information including plant maturation and fertilizing schedules, and plant shipment dates. A dual-purpose lunchroom and training room features a TV/VCR station where employees view orientation and other informational videos. Changing with the Seasons Al started out in the business offering azaleas, rhododendrons and other perennials, then gravitated to tropicals. Once the market became saturated with these popular varieties, Al switched to an all-annual strategy that he observes today. When competitors began selling the 4.5 inch size pots that Al pioneered, the wily nursery- A late winter landscape belies the lush plant growth within the greenhouses. Pictured here are just three 30’ x 192’ examples of the nursery’s 42 total active greenhouses. Rainwater that collects in 10’ trenches on each side of the greenhouses is ultimately piped into a pond on the nursery grounds, a convenient source of irrigation water. always find a cheaper plant,” Cort says, “but our quality and consistency is the key.” On Their Own The Smiths hadn’t planned to design their own greenhouse. It was only after Al and Cort’s extensive one year search for a unit failed to yield any structures that met their climate control, propagation and shipping requirements that Al hit the drawing board to create his own. The Smiths built the big greenhouse during the winter offseason and within three months, pleted in July 2003. Special care was taken to support Walnut Spring’s emphasis on customer service and efficiency when planning the accounting, inventory, delivery and supervisory operations. To wit, all offices feature internal windows with a view of the front entrance, enabling staff to provide walk-in clients with immediate attention. The front counter has two point-of-sale systems to expedite order pick-ups during busy times, when as many as six employees may be behind the counter assisting clients. Springs can deliver to landscapers at the site of a project. With 14 trucks making two deliveries a day, seven days a week, the driver’s station is a high traffic area of the main office. The supervisors’ office is an open area with 12 desks, one for each of the six range supervisors and their assistants. Every morning, Cort holds a meeting here to review daily and weekly goals as well as any miscellaneous issues. To track weather conditions as well as their numerous nursery responsibilities, each supervisor and assistant has a computer. man added six inch pots to his inventory, touting the benefits of increased coverage to landscape clientele eager to cover more surface area with fewer plants and labor. So it’s no surprise that Al’s unphased by the competition between upscale garden centers and chain stores and any potential impact on Walnut Springs: “With all the development going on, especially with more corporate office parks wanting professional landscaping, we can never be big enough for landscape cony tractor demand.” mafc.com • Volume 9, Issue 2 • 9 New Ideas Welcome by Michelle Kunjappu A dairy farmer focuses on the basics to manage his 1,400 cow operation. Tom Frey, general manager and president of Frey Dairy Farms, Inc., is joined by Andrew Terrell, account executive for MidAtlantic Farm Credit at the farm’s sign. I t will take forward-thinking leaders to guide the nation’s dairies through industry changes in the years ahead. “At some point, in any growing dairy, the owner’s attention must turn from being totally hands-on to coaching and guiding others to get the work done.” says Tom Frey, general manager and president of Frey Dairy Farms, Inc., a 1,400-cow operation near Conestoga, Lancaster County. “It’s much more fun to go out and work on something hands on,” says Frey. “I do some of it. But to keep our dairy business on course, I must stay focused on leadership, employees and information.” Frey’s training in leadership came from several venues, as he was self-employed as a professional hoof trimmer and then worked as director of Christian education at his church for several years before coming back to the farm. These varied experiences helped to teach him how to work with people, believes Frey. “As a leader who was once an employee, I have to think, ‘what was it like when I was the employee? What did I need? What motivated me? What de-motivated me?’” “The employee side is by far the most challenging” part of operating the dairy, according to Frey, who oversees 23 fulltime workers. However, he also is quick to add, “it’s the greatest area for opportunity.” Take It From the Top “It really starts with management,” says Andrew Terrell, account executive at the Lancaster office of MidAtlantic Farm Credit. “It is critical to run a dairy like a business,” says Terrell, who notes that Frey has “a whole series of protocols, standard operating procedures, numbers and statistics, job descriptions and employee incentives” to help manage the farm. One area where Frey feels he has been particularly successful is with the milkers, who milk the cows three times daily. Recently Frey learned the principle that measuring and reporting back performance is integral to performance improvement, so he applied that principle to the milkers. Now, four performance indicators are reported back to the milkers: teat preparation as measured and scored by the computerized milking system, the appearance of the milk filters, fluctuations on a milk temperature graph and the somatic cell count. “They get a point score every two weeks and that ties directly to a cash bonus,” he says. In an effort to communicate often and thoroughly, Frey and a translator meet with the milkers, who are Hispanic, every Tuesday to discuss items like vacation, miscellaneous reminders or even doctor appointments and medical bills, along with guidance in sharpening their skills in milking cows. Never Stop Learning Also to help steer the operation into the future, Frey arms him- self with information. “One of the best things I’ve done for myself is to go to conferences. I pick conferences that are going to be telling me about the latest and the greatest—what’s new, what’s out there,” he says. Frey subscribes to several leading magazines and commits to reading them. “I’ve learned a lot—some guys around here think I read too much because I keep coming up with all these crazy new ideas,” he jokes. One of these ideas is the flushing system used to clean the two 600-stall freestall barns. The old methane digester serves as a reception tank for flushed manure, which overflows into various tanks before it reaches the storage lagoon. Water is taken from just under the surface of the lagoon through screens. The system recycles 200,000 gallons of water a day. “We flush our alleys six times a day because we’ve got the water. It allows us to have all the benefits of flushing, photos by Michelle Kunjappu 10 • Volume 9, Issue 2 • mafc.com which is ease of cleaning the barn, which leads to clean cows, which leads to milk quality,” he said. Focus on Core Competencies Additionally, Frey has learned that specialization pays. All of the heifer calves leave the farm when they are two to three days old and are customraised until they return to the farm at five to six months old. “It’s one of the more difficult jobs on the farm, to keep baby calves alive and thriving. I feel like it made sense for us to get more focused on what we do—that is, we make milk,” he says. This concentration on milk production means that the field work has been done for ten years by the neighbors, according to Frey. The operation includes 800 tillable acres owned and rented. Besides specialization, Frey has also educated himself about the benefits of risk management. Frey first forward contracted milk in 2001 and “I think it makes a lot of sense to use forward contracting as a tool. I don’t doubt that if a person can take the highs and lows of a market, it’s just as good or better. But if there’s a lot of debt, I’ll take that difference for a stable, positive income.” Crop insurance, which Frey has used for the past four to five years, also helps Frey manage risk. “The first time I bought it, I bought only catastrophic insurance, but it was a good investment,” he says. “Then I went to better coverage and I think it is a tremendous help.” Find Good Partners To plan for the future of the farm, “hire good advisors and use them wisely,” says Frey. “They may be expensive, but are they more expensive than your mistakes?” Tom’s grandfather, Armor Frey, milked a small herd of cows and began bottling and selling the farm’s product, from whence grew the familiar Turkey Hill Dairy, maker of various drinks and ice cream. In 1959 Armor Frey formed two corporations and divided responsibility for ownership and management among his children. This separated the milk processing and marketing business (Turkey Hill Dairy, Inc.) and the dairy operation (Frey Dairy Farms, Inc.). “I have very much appreciated MAFC,” says Frey. “I feel they understand our business, what’s involved, and the challenges. I believe, too, that they are tuned in to what’s happening with progressive dairy businesses. I’m very glad we made the change in January of 2003.” y “E-mailing is a wonderful tool for communication,” says Frey, who uses the technology to correspond with the veterinarian, nutritionist, maintenance workers, DHIA, crop consultant or nutrient management planner. Frey meets with both day and evening shifts of milkers each Tuesday. Pictured is Nehemias Toledo. Frey has five men working on night shift and five on day shift. Frey has seen success in using computer-generated statistics to measure the performance of the workers. Top-rated workers are then rewarded with a cash incentive. Pictured is Jose Romero. Tom England has been the herd manager at the farm since 1995. mafc.com • Volume 9, Issue 2 • 11 Building Your Dreams by Jack Curry MAFC’s Country Mortgages program offers competitive, flexible and simple construction loans. hen Mark and Robin Krantz began planning to build their log home on a ridge top facing the Catoctin Mountains near Keymar, Maryland, they wanted a lender who understood their needs and who had the flexibility to bring their first time of building a home to reality. The Krantz’s quickly found MAFC’s Country Mortgages program offered a construction loan that was a perfect match for the unique log home they envisioned. The construction loan package prepared by Adam Cramer, an account executive in MAFC’s Frederick office, was custom tailored to the Krantz’s plans and needs. “Mark and Robin took their time in selecting the two-acre home site which is adjacent to his father’s 130-acre farming operation. They carefully decided on a log cabin type home package from a reputable company,” Adam says. “We structured the loan so that they could begin planting some 18,000 hardwood seedlings on the property even The Krantzs’ comfortable log home is positioned on a two-acre lot so that it provides a scenic view of the Catoctin Mountains. The home has 2,300 square feet of finished living space in addition to an unfinished basement. W before the log home package arrived and we also planned for a significant draw on the construction loan when the package arrived on-site,” he adds. Flexibility and Simplicity Country Mortgages was able to extend the initial construction phase of the loan when inclement weather delayed construction. This allowed the Krantz’s more time to do much of the finish work with the help of friends and family, particularly Robin’s brother, Ben, and her father, Gene Burdette, owner of Burdette Builders. So, other than an understanding of rural properties and their value, flexible and competitive home financing plans, what else makes MAFC’s Country Mortgages program a good source for construction financing? Most construction lenders require borrowers to have a 2030 percent down payment, not including any equity in the lot. Country Mortgages uses the appraised value of the total package—lot and new house— and can lend up to 85 percent of the value. They also realize that it is very common in rural lending for borrowers to have equity sources outside the standard underwriting guidelines, i.e., sweat equity, gift equity and sale by a neighbor or to a tenant. Another very important and time saving feature of MAFC’s Country Mortgages program is that it offers construction loans that can become the permanent financing for the home with only one settlement required. Take Your Time and Plan Adam suggests attending to the following items before applying for a construction loan: 1. Select a licensed and reputable contractor. Check references on the contractor and any sub contractors used. Carefully review your plans and specifications with the builder. Be sure to address any zoning issues. 2. Prepare a construction contract, which includes a draw schedule. Review it carefully. 3. Include a set of house blueprints and specifications and a copy of the construction contract with your application. Adding to Adam’s suggestions, Mark and Robin say homeowners should take their time in every phase of the planning. “Don’t get in a rush, take your time, it’ll be well worth the extra time you spend attending to the details,” Mark says. Laughingly, Robin interjects, “And count on it costing more than you first thought by the time you’re finished. Everybody told us that and even though we didn’t think it would apply to us—it did, but we’re very happy with the results.” Results are what count. Robin and Mark know that as they already are enjoying the mountain view from the great room of their soon to be completed log home—another dream home made possible by y Country Mortgages. 12 • Volume 9, Issue 2 • mafc.com Mark and Robin Krantz (right and left) with account executive Adam Cramer (center). Ready, Aim, Smile!! MAFC wants your favorite shots! Wanted: Your Best Agricultural-Related Photos Click, click, click…we all love taking photos of our favorite things. Send us your Submission Guidelines: • Complete a Photo Submission Form for each photo you send. Three photo(s) maximum per person will be accepted. • No digital photography will be accepted. • Attach the submission form to the photo or to the envelope containing the photo(s). Do not use staples or paper clips. • It is recommended that photos be placed between two sheets of cardboard or other protective material to avoid damage. • For best reproduction, photos should be a minimum of 5x7— however—smaller photos may be submitted. • All photos must be received no later than August 23, 2004. • Photos will not be returned unless requested by sender. SIGNATURE OF CONTRIBUTOR best agricultural-related photos —we’ll look at all the pictures received and the top picks will appear in our 2005 calendar. We’ll also feature some of the entries an in upcoming issue of The Leader. This is the third year we’ve asked for your photos—you’ve really come through with some great shots in the past. Remember, we need pictures from all fours seasons—so if you don’t have that one really great picture yet, you still have time! ¡ MidAtlantic Farm Credit Calendar Photo Submission Form YOUR NAME (PLEASE PRINT) PHOTOGRAPHER’S NAME ADDRESS CITY PHONE PLEASE BRIEFLY DESCRIBE THE PHOTO (LOCATION, WHAT IS IN THE PHOTO, ETC.) STATE ZIP Mail to: MidAtlantic Farm Credit 2005 Calendar 680 Robert Fulton Highway Quarryville, PA 17566 I/we hereby give MidAtlantic Farm Credit or its agents permission to use the attached photograph(s) including the names and likeness of individuals appearing in the photograph(s) in the 2005 calendar, the quarterly magazine The Leader, or any other lawful purpose. I/we understand that MidAtlantic Farm Credit will make every reasonable effort to return photographs, but that it cannot be responsible for loss or damage. mafc.com • Volume 9, Issue 2 • 13 Meet the winners for 2004: DelMarVa Region Katie Mason Recipient of $2,000 scholarship Katie is a high school senior that aims high—her ultimate career goal is to serve as Secretary of Agriculture. Currently a student at Kent County High School, Katie plans to attend college in the fall to study agricultural science. In one of her application essays, Katie says her goal is to “make it possible for the family farm to continue…I want to make a difference in the agriculture industry by influencing legislation to help farmers.” While you’re there, Katie, be sure to put in a good word for Farm Credit! Katie’s parents are Tom and Alice Mason of Chestertown, Maryland. The Future Looks Bright by Donna Dawson and Sandy Wieber Ashley Adams Recipient of $1,000 scholarship Ashley is a high school senior at Sussex Central High School. Like a lot of students, she is still looking at several career options, but they all have one thing in common: improving the world around her. “I may one day bioengineer a new corn crop that would mature faster…I may research the implications of crop rotation and…discover different crops that could add more nitrates to the soil” she said in her essay on career goals. We’re betting she’ll be successful at whatever she pursues. Ashley’s proud parents are Thomas and Teresa Adams of Georgetown, Delaware. T alk about a great crop year! This year, MAFC received almost 100 applications for our nine scholarships. As usual, the nine recipients are truly outstanding, talented individuals. We wish all of our winners the best of luck in their academic pursuits. MAFC is proud to offer this scholarship program to the children of members or members themselves as it promotes education among our youth and helps ensure a qualified workforce in the future. Look for information on how to apply for our 2005 scholarship program in upcoming issues of The Leader or visit our website at mafc.com. Melanie Sherman Recipient of $500 scholarship Looking for a new bedtime story for your grandchildren? Melanie Sherman may just be the person to write the book you’re reading in the future. Currently a high school senior at North Dorchester High School, Melanie would like to write a series of non-fiction educational books for children, or write non-fiction for a newspaper or magazine. To prepare for those goals, Melanie will attend college in the fall and major in English. Her parents are George and Debra Sherman of Hurlock, Maryland. 14 • Volume 9, Issue 2 • mafc.com MidMD Region Erin Magness Recipient of $2,000 scholarship Erin is no stranger to winning, having won top honors in both dairy judging and dairy bowl competitions in the past few years. In fact, Erin is a member of the 4-H dairy judging team that will be traveling to Europe to represent the United States later this year. Currently a senior at North Harford High School, Erin plans to attend college to study biological systems engineering. Her focus will be on land and water resource engineering. Congratulations on your latest win, Erin! Erin’s parents are Daniel and Patricia Magness of White Hall, Maryland. Penn Region Elaine McGuiney Recipient of $2,000 scholarship We don’t know how to ask if it’s raining in Mexico City, but Elaine McGuiney does, as she is a sophomore at Penn State University pursuing a double major in meteorology and Spanish. Elaine has a full schedule for the next two years, and is looking forward to studying abroad in Spain during the spring of 2005. Closer to home, she has been inducted into The National Society of Collegiate Scholars, and is a member of Phi Eta Sigma and Phi Kappa Phi. She also was nominated to participate in the 2004 International Mission on the Environment in Brazil. Elaine is the daughter of Robert and Cheryl McGuiney of Kempton, Pennsylvania. Matthew Baile Recipient of $1,000 scholarship Matthew is a senior high school student at Francis Scott Key High School. He would like to attend college to study biology—with a concentration in biotechnology. “I have seen first-hand how biotechnology has enabled farmers to be even more environmentally friendly. I look forward to participating in biotechnology research that will make a difference in this world,” he said in one essay. We look forward to that, too, Matthew, and wish you the best of luck! Matthew’s parents are Melvin and Joan Baile of New Windsor, Maryland. Ruth DeVault Recipient of $1,000 scholarship Ruth is currently enrolled at Kutztown University studying in the field of elementary education. She has been on the Dean’s list while in college. While she is not studying agriculture, she is committed to giving her future students a better understanding of where their food comes from. “I think we need our future generations to appreciate the value of their food; not only the work that went into producing it, but also the importance of assuring our farmland does not disappear,” she said in one of her essays. We whole-heartedly agree, Ruth, and wish you lots of luck in the classroom. Ruth’s parents are George and Melanie DeVault of Emmaus, Pennsylvania. Jessica Hildebrand Recipient of $500 scholarship Jessica is currently a senior high school student at Walkersville High School, but she already has a huge commitment to her community: having recently joined the Woodsboro Fire Company, she is considering a future career as a Fire Marshall. Jessica is also committed to the importance of cooperatives for agriculture today, saying in her essay that “cooperatives are essential and beneficial to the future of agriculture…the profit goes back where it belongs; in the hands of the farmers to be used where it may be needed.” Jessica’s proud parents are Marlin and Julie Hildebrand of Woodsboro, Maryland. Jessica Matejik Recipient of $500 scholarship Jessica has taken a love of the animals on her parent’s farm and has translated that into a goal of being a veterinarian. Before she begins a private practice, however, Jessica hopes to join the Army Veterinary Corps, setting up veterinary clinics in less fortunate countries. Currently a high school senior at New Hope-Solebury High School, Jessica has been very successful academically, and has participated in the Pennsylvania Governor’s School for Agricultural Sciences. Jessica’s parents are Karen and Joseph Matejik of Mechanicsville, Pennsylvania. mafc.com • Volume 9, Issue 2 • 15 New Holland: Carol Breneman of Washington Boro, Pennsylvania won the handmade quilt. Annual Meeting Wrap Up Over 1,175 members and guests attended MAFC’s annual stockholder’s meetings. New Holland: Pennsylvania’s Secretary of Agriculture, Dennis Wolff (center) with MAFC board chairman, Wilmer Hostetter (left) and MAFC president, Bob Frazee (right). Photo courtesy of Lancaster Farming. Shoemakersville: Gloria Faust of Andreas, Pennsylvania won one of two tubs of flowers. Shoemakersville: Jessica Matejik, Mechanicsville, Pennsylvania is presented her scholarship by Wilmer Hostetter, MAFC board chairman. Edgewood: Member Leonard Hutschenreuter, Sr. took home the May flowers that were awarded as a door prize. Edgewood: Erin Magness accepted her scholarship award from board chairman Wilmer Hostetter. Walkersville: Ruth Ridgely let out a joyful cry upon being the winner of the quilt door prize drawing. President/CEO, Bob Frazee, discussed 2003 results and highlights for 2004. Photos taken in New Holland and Shoemakersville by Donna Dawson. Photos taken in Edgewood and Walkersville by Holly Porter. Walkersville: Mary Stull accepts her patronage check from account executive Michelle Trumpower. MAFC returned over $19.8 million to its membership in April. 16 • Volume 9, Issue 2 • mafc.com MidAtlantic Farm Credit, ACA Consolidated Balance Sheets (dollars in thousands) unaudited March 31, 2004 December 31, 2003 Assets Cash Loans Less: allowance for loan losses Net loans $ 3,566 1,456,307 30,393 1,425,914 10,365 18,295 5,082 2,947 3,561 $1,469,730 $1,215,143 3,638 7,214 123 6,501 5,869 5,835 1,244,323 $ 5,159 1,455,755 30,383 1,425,372 8,668 18,295 5,013 2,915 11,834 $1,477,256 $ 1,215,951 3,941 6,053 11,435 6,293 5,408 9,177 1,258,258 2004 Election Results BOARD OF DIRECTOR ELECTION (All terms are 3 years) Accrued interest receivable Investment in AgFirst Farm Credit Bank Premises and equipment, net Deferred tax asset, net Other assets Total assets Liabilities Notes payable to AgFirst Farm Credit Bank Accrued interest payable Patronage refund payable Allocated surplus payable Postretirement benefits other than pensions Minimum pension liability Other liabilities Total liabilities Commitments and contingencies Members’ Equity Capital stock and participation certificates Retained earnings: Allocated Unallocated Accumulated other comprehensive income (loss) Total members’ equity Total liabilities and members' equity Central Maryland Election Region Robert N. Stabler Ralph L. Robertson, Jr. Chesapeake Election Region No positions were vacant Delaware Election Region Walter C. Hopkins Fred West Keystone Election Region Mervin Sauder Marva Election Region Fred R. Moore, Jr. 8,619 79,393 145,268 (7,873) 225,407 $1,469,730 8,534 79,529 138,808 (7,873) 218,998 $1,477,256 Consolidated Statements of Income (dollars in thousands) unaudited For the three months ended March 31, 2004 2003 NOMINATING COMMITTEE ELECTION (All terms are 1 year) Interest Income Loans Other Total interest income Interest Expense Notes payable to AgFirst Farm Credit Bank Net interest income Provision for (reversal of) loan losses Net interest income after provision for (reversal of) loan losses Noninterest Income Loan fees Fees for financially related services Equity in earnings of AgFirst Farm Credit Bank Noninterest income other Total noninterest income Noninterest Expense Salaries and employee benefits Occupancy and equipment Insurance Fund premium Other operating expenses Total noninterest expense Income before income taxes Provision (benefit) for income taxes Net income $19,891 3 19,894 10,954 8,940 — 8,940 339 43 2,353 597 3,332 3,139 460 357 851 4,807 7,465 (30) $ 7,495 $19,730 3 19,733 12,401 7,332 580 6,752 265 30 — 183 478 2,950 344 395 832 4,521 2,709 — $ 2,709 mafc.com • Volume 9, Issue 2 • Central Maryland Election Region Steven W. Wilcom Steven L. Wilson Chesapeake Election Region Dale O. Collins William M. Knight, Jr. Delaware Election Region Edwin J. Alexander Earl H. Passwaters Keystone Election Region Stephen R. Burkholder Earl S. Weaver Marva Election Region Susan B. Arnold Charles H. Wilkins 17 Who Says You Can’t Start Farming Now? By Sandy Wieber MAFC’s board gives young farmers some direction for the future I f you want to farm in the future, MAFC can help with a wide variety of programs and services specifically designed to help young people start farming today. For more information on our young farmer programs, visit our website at mafc.com, where we have an entire section devoted to the topic. If you sign up for more information on our website, we will send you a packet including information on special loan programs tailor made for people starting out, as well as a list of resources for your state. But remember, that’s just the beginning of our resources. We recently turned to another of our resources—our board of directors—and asked them what advice they would give a person just starting out in agriculture. Here are some of their responses. Tech Talk Think you can operate a farm like your father did? Think again, say many of our directors. “You have to accept changes in technology,” says Wheatley Neal, a grain farmer from Federalsburg, Maryland. “And that means changes in everything—there are technological improvements in seed, in plants, in equipment—even in the financial services available. A smart farmer in the future will take advantage of all of these improvements, and be one of the first to adapt to them.” Director Ralph Robertson of Westminster, Maryland, agreed that technology will be key in the future: “You don’t have to learn it all on your own,” he says. “Attend educational seminars—they’re a great way to learn and network with other people in the same boat.” Dairy farmer Gary Grossnickle of Walkersville, Maryland, says that learning can take place anywhere: “Take advice and listen to other farmers, especially those who are successful,” he says. “And, of course, read read read—it’s the best way to stay on top of things.” Almost all of the directors questioned suggested that it’s important to watch your debt load, especially as you’re just starting out. “It’s a good idea to rent your land to get started,” says Rodger Wagner, a dairy farmer from Oley, Pennsylvania. Mervin Sauder of Lititz agrees: “You need to watch your cash flow,” he says, “and work very closely with your loan officer. Give them all the information they need—you want them to be a partner in your operation.” Not surprisingly, many directors suggested that young farmers contact Farm Credit. “It’s a good idea to have a strong relationship with your lender, and MidAtlantic will take the time to build that,” says John J. Hastings, a vegetable, grain and poultry producer from Laurel, Delaware. “The cooperative concept is an important one,” adds Ralph Robertson. “It helps not only with returned earnings, but it also helps promote agriculture in a way that private businesses will not. And there’s a real opportunity for you to get involved with them—keep the cooperatives strong and viable.” It Won’t be Easy “If you’re considering full-time farming,” says Jack Crum, from Walkersville, Maryland, “you have to be prepared for a fulltime commitment. If you can’t do that, don’t start. I’m a firm believer that good things take time and effort, and bad things happen quick and easy. It will take commitment to succeed.” Zeke Collins, a grain and poultry farmer from Salisbury, Maryland, agrees: “If you’re going to go into farming, think long and hard about it first. Do a lot of pencil pushing, and be sure to work closely with an accountant,” he says. Be prepared also to promote yourself, which means marketing your products and sometimes changing them. “The ability to evaluate niche markets will be key,” says Doug Scott, of Hurlock, Maryland. “You’ll have to look at what’s available to you, and choose the opportunities that best fit your operation.” Sometimes that means turning a lemon into lemonade: Fred West, who is a poultry and grain farmer in Frankford, Delaware, says that the downside of increasing urban sprawl can be an upside if you look at direct marketing opportunities. And diversification is always a good risk management tool, no matter where you live. A Little Help Seventy-five percent of our responding directors suggested that young farmers partner with more experienced farmers, both to learn the business and as an opportunity to buy a working operation. “Plan ahead,” advises Leon Stoltzfus, a hog farmer in Gap, Pennsylvania. “You don’t have to start out on your own right away—either work for someone who is already established, or go into partnership. That minimizes your risk, and allows you to continue learning while you’re farming.” Don’t assume that you have to be a “next generation” farmer. “Find someone who needs what you can offer,” suggests Dale Ockels, of Milton, Delaware, “That could be a parent, but it could also be a neighbor, or someone that you don’t even know yet! Tell people you’d like to start farming, and ask them for advice. You may get a great lead from them, that will help you get on your feet.” If you have any other questions on how to get started farming, please visit our weby site at mafc.com. 18 • Volume 9, Issue 2 • mafc.com MidAtlantic Farm Credit, ACA J. Robert Frazee, CEO MidAtlantic Farm Credit Board of Directors Robert N. Stabler Chairman Dale J. Ockels Vice Chairman Zeke E. Collins Gary L. Grossnickle John J. Hastings Dale R. Hershey Walter C. Hopkins Wilmer L. Hostetter M. Wayne Lambertson Howard A. McHenry Fred R. Moore Jr. D. Wheatley Neal Mehrle H. Ramsburg Jr. Ralph L. Robertson Mervin Sauder Douglas D. Scott Lingan T. Spicer Leon A. Stoltzfus L. Ronald Wade Rodger L. Wagner Fred N. West Volume 9, Issue 2 A P U B L I C A T I O N O F M I D A T L A N T I C F A R M C R E D I T LEADER Published quarterly for stockholders, friends and business associates. The Farm Credit Administration does not require the association to distribute its quarterly financial reports to shareholders. However, copies of its complete report are available upon request. The shareholders’ investment in the association is materially affected by the financial condition and results of operations of AgFirst Farm Credit Bank and copies of its quarterly financial report are available upon request by writing: Patti Trotter AgFirst Farm Credit Bank P Box 1499 .O. Columbia, SC 29202-1499 Address changes, questions or requests for the association’s quarterly financial report should be directed to: MidAtlantic Farm Credit, ACA by calling 800.333.7950 or writing MidAtlantic Farm Credit P.O. Box 770 Westminster, MD 21158-0770 Questions or Ideas If you have any questions or ideas for the editorial staff of The Leader, contact Donna Dawson at 800.477.9947, e-mail her at ddawson@mafc.com or write her at MidAtlantic Farm Credit, 680 Robert Fulton Highway, Quarryville, PA 17566. This publication is for you, our reader. We’d love to hear from you! MidAtlantic Farm Credit P.O. Box 770 Westminster MD 21158-0770 PRSRT STD U.S. POSTAGE PAID PERMIT NO. 7175 BALTIMORE, MD A Helping Hand Sometimes, the next generation needs a bit of help before they can go full speed on their own. This issue of The Leader focuses on how farming will change in the future, and how young farmers can prepare today to navigate any bumps in the road. Farming in the Future