Inside this Today’s Growing
Yes, harvest season has arrived, and with it come those most enjoyable aspects
of fall…sunny days and cool nights, the changing colors, pumpkin carving and
weekend football games to name just a few. We wish everyone a safe and
successful fall harvest, and we hope you’ll find just a few minutes during this
busy time of year to relax and enjoy this latest issue of Partners. Inside, you’ll
find bios on this year’s GreenStone scholarship winners, information on the
upcoming Holiday Card Contest, and a feature article on an aspiring entrepreneur.
Happy reading…and as always, your comments and ideas are welcomed.
FEATURES IN EVERY ISSUE
9| A Big Dream... 2| CEO Comments
Rockie Rick would like to own a winery
someday, and he made a start last year.
3| Market Outlook
He bought 10 acres of land and planted 7| Director’s Corner
9| Young, Beginning, and
12| Scholarship Awards Small Farmer Focus
GreenStone Farm Credit Services
recently awarded $2,000 scholarships 15| News Update
to six outstanding students.
4| What Employees Want
by Dr. David Kohl
5| Lessons from a Clean Closet
by Barbara Dartt
13| Recreational Land Financing
by Larry Johnson
by Jim Schiller
F all 2007 is here, replacing a
relatively hot and dry
funds continuously accessible now and into the foreseeable
future—it’s a great system that many times we take for granted.
summer. The bright colors and cool The general economy continues to feel the effects of a
nights make it a welcome change. decline in the housing industry. The significant slowdown in
The four seasons in my opinion are a new construction sends a major ripple throughout the
significant advantage for us living in economy. The Federal Reserve also met on September 18 and
the great states of Michigan and lowered the target Federal Funds rate by one-half percent, thus
Wisconsin (one may contest that on affecting short-term interest rates and lowering the prime rate.
some winter days). GreenStone has in turn lowered its variable rate by one-half
Fall also marks the harvest season when agriculture percent effective October 1, as our short-term funding costs
measures results. This year we will see different results for have been reduced. The rate cut was the first in more than
different parts of the territory. Some will see significant losses four years and was double the quarter-point reduction many
from drought; some will see reduction in yields from drought, economists had expected.
and others that received the timely showers will have average- Financial Performance
to-good yields. We all know that agriculture is a cyclical Your GreenStone organization continues with an
industry and that we need to manage risk and prepare for the excellent year of financial performance. All of our financial
down cycles. Fortunately, better crop insurance products are disciplines are meeting or exceeding targets. Strong financial
available that can mitigate production and revenue risk. performance in the agricultural sector continues to spur
Hopefully, if you are in one of those drought areas, you have demand for credit. GreenStone’s loan volume as of August 31,
taken advantage of that risk management opportunity. 2007 is up 16.8 percent over August 31, 2006. Credit quality
It is fortunate that many of our customers have built remains sound, and financial services revenue is strong. More
additional liquidity over the past few years to help survive the detail can be found in our quarterly reports which are located
down cycles. GreenStone remains strong with good financial on our web site at www.greenstonefcs.com.
resources and staff expertise second to none to make sure that
we provide reasonable alternatives for those customers in need.
Agriculture continues to be the bright spot for the
Interest Rates economies of Michigan and Wisconsin. It is a significant boost
Short-term interest rates continue to be volatile. Recent for the Michigan economy as it is more closely tied to the auto
headlines about the sub prime lending activity of some finan- industry. We should all take pride and feel good about our
cial institutions caused investors to sit on the sidelines which connection to this dynamic industry. Renewable energies,
ultimately caused a liquidity crisis for those lenders. The biotechnology, enhanced genetics, etc., will continue into the
Federal Reserve immediately took action to lower the discount foreseeable future. It is good not just for us but future
rate 50 basis points which calmed the marketplace quickly. In generations as well.
my opinion this liquidity issue was more a perception than Best wishes for a successful harvest. We value your business
reality and should work its way through the system over the and welcome your comments and questions.
next few months.
The good news for the Farm Credit System is our funding
source. It was not affected, and our bonds with GSE status,
AAA ratings, overall System strong capital position, high asset
quality, and favorable investor perception make our source of Fall 2007 PARTNERS |2
the fact of the matter is that the U.S. Ethanol industry is
expected to add another 1.1 billion bushels of capacity in the
next crop year. The resulting stocks-to-use ratio could possibly
be history’s tightest. That being said, corn values are likely
making a seasonal bottom. You should expect a similar price
pattern to last year, where a low was made on September 15,
and a subsequent contract high was in place in mid-February.
USDA’s soybean balance sheet looks like this: 64 million
acres planted versus 74 million last year, yielding 41.5 bushels
per acre compared to last year’s yield of 42.7, resulting in a
production number of 2.625 billion bushels and a final carry-out
number of 220 million bushel. Some private forecasters project
even lower carry-out numbers. Such carry-out stock numbers
By Ken Lake would indicate that a seasonal low is in place for soybeans and
call for a market rally to $9.50 to $10.50 by spring.
The explosive wheat market has been more subdued of late
I n the summer issue of Partners Magazine I wrote that
the bullish May 12 USDA corn supply and demand
numbers were not a surprise. The fact that the trade had, at
as we have seen more normal weather forecasts for both
Australia and Argentina. We see continued interest from
buyers like Morocco and Algeria indicating that demand still is
the time, gotten the sense that U.S. corn farmers were about to
not being rationed even at current record values. That being
plant less corn in favor of soybeans had already caused July
said, a major top will be forming in the wheat market if more
and December corn futures to peak, a classic “buy-the-rumor,
regular rains begin to fall in the major wheat growing areas of
In USDA’s August Supply and Demand report, they pegged
Recent cattle markets have garnered around $92 in the cash
the nation’s corn crop at 13.054 billion bushels with a yield of
market. South Korea recently banned imports from another
152.8 bushels per acre, giving us a carryout for the 2007-2008
U.S. beef packing plant after discovering rib bones during
crop-year of 1.516 billion bushels. Private forecasters have
recent inspections. The long term view of the cattle market
spent the past thirty days performing yield checks on the corn
remains bullish...tightening supplies of fed cattle should
fields throughout the country. FC Stone reported this week a
produce a sustained rally to $99 to $102.
corn yield of 152.9 bushels per acre and production at 13.062
Cash hogs have been lower in all regions. Iowa and
billion bushels. Informa surprised us when they reported a
Minnesota hogs were down at $61.42. Cash prices continue to
bigger yield of 156 bushels per acre and production of 13.323
suffer amid the seasonal increase of producer offerings, while
billion bushels. Ag Resource Corp pegs total production at a
the shortened Labor Day work week added additional hogs to
smallish 12.978 billion bushels. I think it’s safe to say that
daily operations. Daily slaughter and production rates are now
even though there is disagreement among trade analysts, the
reaching multi-month highs. From a value standpoint, you
old axiom of “a big crop gets bigger” likely holds true this year
should see neutral to slightly bearish hog futures. Producers
and we will eventually find better than expected yields once
are advised to wait for technical rallies to begin hedging fourth
the combines roll. That is unless you are a resident of
Michigan or Ohio. In those states, because of drought, they
have seen a reduction from the previous year of their corn
crops of about 25% and 10% respectively. Only the non-corn Ken Lake is the Origination Services Coordinator for Michigan Agricultural
belt state of Virginia saw a more dramatic drop in corn yield Commodities Inc., Lansing, Michigan, and a licensed commodities broker
registered with the National Futures Association.
this year than Michigan. The opinions stated herein are not necessarily those of GreenStone FCS.
While analyzing corn supply and demand, final yield and
carry-out, regardless of who is right about the final numbers,
3| PARTNERS Fall 2007
WHAT EMPLOYEES WANT by Dr. David Kohl
You are the CEO of your farm or ranch business. You interact with a number of employees and you are wondering:
“What do they want?” The following elaborates on a survey of workers and job seekers that asked: “What is
important when your employer communicates with you?”
F irst, employees want insight on how to be more
effective, shown by 52 percent of survey respon-
• Additionally, 45 percent of respondents want an
explanation of the business’ vision and 41 percent
dents. If it’s the younger generation, they desire feedback want to be engaged on a personal level. They used to
often, since they are the generation that grew up with call this “management by walking around”.
computer games that provided instantaneous feedback. Something I have learned from athletics is that every
A grunt or grumble from the supervisor is not acceptable good head coach has good assistants who provide
with this group. input and respond with feedback.
• Many want to know how they fit into the company’s
vision, purpose, or mission (47 percent). A CEO is a ACTION STEP
storyteller, constantly presenting views of where the Want to turn the younger generation off?
company is going and how the workforce fits in. This Bureaucracy, meetings, and a sense of not making a
becomes very critical in times of change in direction of difference will suppress their motivation and
the company or when unexpected circumstances occur. productivity. Assess your business and make it a
• Many younger people seek advancement either point to minimize these types of turn-offs.
through responsibilities or accountability on special
projects that they can call their own, which move the
Dr. David M. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural
and Applied Economics at Virginia Polytechnic Institute and State University (Virginia Tech), Blacksburg, Virginia. He has conducted more than 3,000 work-
shops and seminars for agricultural groups such as bankers, Farm Credit, FmHA, and regulators, as well as producer and agribusiness groups. He has pub-
lished four books and over 400 articles on financial and business-related topics in journals, extension, and other popular publications.
The opinions stated herein are not necessarily those of GreenStone FCS.
Fall 2007 PARTNERS |4
A CLEAN CLOSET
By Barbara Dartt
T he work was long overdue—my bedroom closet shelves were
dripping with unfolded, haphazard clothes. Shoved onto the
racks were things I hadn’t worn for years. The excuses finally ran out and
I spent the better part of a day unclogging, sorting, bagging and hauling
Once it began, the process was actually satisfying . . . and the results
have been surprising. I hadn’t realized how the messy closet had been
“infecting” the rest of my bedroom. I was inspired to pare down the stack
of books by my bed and uncover the chair. I also find myself promptly
putting away folded clothes and encouraging (in the most supportive
tones, of course) family members to put their stuffed animals and toys in
their own rooms.
I now enjoy a clean closet and can easily find clothes each morning.
As a bonus, because I invested in the process and did the work, I am also
motivated to maintain the feeling of tidiness and order. Someday I’m sure
my self-contained cycle will hit a bump and I’ll again find myself with a
cluttered closet. Meanwhile, I am enjoying the fruits of my labor.
The Closet’s Lessons
Every process needs periodic review—sorting, comparing and eradicating
Sometimes, outside forces compel us to examine our processes. By
January 1, 2008, any Michigan dairy producer not signing an affidavit
ensuring they have stopped using bST will receive less for their milk.
Michigan dairymen are closely examining their processes—reproduction,
feeding, culling—to determine how to preserve as much milk as possible
when this technology goes away.
5| PARTNERS Fall 2007
When no outside force prompts us to “tidy up,” though, the “EMPLOYEES WHO ARE ASKED TO PERFORM
gradual creep of messy shelves can build until what used to be
cluttered and unacceptable becomes the new standard. On one
AT A HIGH LEVEL AND SUPPORTED IN THAT
cropping operation we work with, fertilizer, chemicals, fuel PERFORMANCE CAN TAKE PRIDE IN THEIR
and freight costs combined have gone up 44% since 2004. At
the same time, revenue per acre has gone up about 13%. Total WORK. INVOLVING EMPLOYEES, HOLDING
acres have not increased. As we discussed these trends, we
talked about how much these expenses increased due to THEM ACCOUNTABLE AND PROVIDING “ATTA-
escalating costs and how much they had inflated due to
BOYS” FOR GOOD WORK REQUIRE LEADER-
differing production practices. In today’s climate, input prices
can be an easy excuse—too easy. Do we really know that our SHIP FROM FARM MANAGERS AND OWNERS.”
cost structure has increased simply due to prices? If they have,
are there ways we can shift practices like fertilizer timing,
spray products or tillage techniques to reduce usage? If the Today’s price for most agricultural commodities is very high.
expense and revenue trends noted above continue, this crop It could be easy to rest on those laurels and accept some
producer will cease to be competitive some time soon. complacency in our businesses. In Michigan, however, we
don’t have to look far for examples of businesses that allowed
Complacency in one area can easily spill over into other parts
complacency to sneak in and take up residence. If GM had
of your business.
cleaned their closet, maybe they would not be in such a
Imagine a situation where Jeff, the skid steer driving barn
cleaner, consistently beats up freestall loops without any
consequences. Scott, the mechanic/welder, repairs them—on a
Barbara is a Planning Coach with Salisbury Management Services, a company
weekly basis. When Scott goes back to the shop to change the with offices in Michigan, Idaho, Minnesota and Wisconsin. SMS was founded in
oil or fix a chain, is he going to be conscientious with the 1979 to provide high quality management consulting services to agriculturally
related family businesses. Dartt assists business owners with financial analysis,
parts and supplies? It would be pretty logical for him to think business succession, operational and long-term planning as well as other chal-
that if Jeff is allowed to abuse equipment and facilities, he lenges unique to family-owned businesses. Barbara can be reached at
firstname.lastname@example.org or at 269-382-0539.
doesn’t need to be careful with wrenches, oil or belts. Soon, a
culture of carelessness has permeated the business. Just like
my messy closet “infected” my bedroom.
“IN TODAY’S CLIMATE, INPUT PRICES CAN
BE AN EASY EXCUSE – TOO EASY.”
Getting people involved invests them in maintaining the
If Jeff and Scott assist a manager in developing a new system
that provides accountability and consequences, it is much
more likely that loops will stay repaired AND that shop supply
costs will be controlled. Employees who are asked to perform
at a high level and supported in that performance can take
pride in their work. Involving employees, holding them
accountable and providing “atta-boys” for good work require
leadership from farm managers and owners.
Fall 2007 PARTNERS |6
MEET DAVE MCCONNACHIE
Your Region II Director
Dave McConnachie, in partnership with his father and younger
brother, operates a 3,300 acre cash crop farm near Deckerville,
in Michigan’s Sanilac County. The farm, which Dave has been
involved with for more than 30 years, produces a combination
of sugar beets, dry beans, soybeans, wheat and corn. Dave
began farming with his father when he was 18, at which time
the farm was actually a dairy. Some ten years later, the group
transitioned into cash crop farming. Dave and his wife Sally, who have been married 27
years, have two children, Andrea and Shelley. While their daughters have moved away from
home and are not involved in the operation, Dave has three nephews who do work full-
time on the farm and who are being included in transitional plans. Dave, who was just
re-elected this past summer to a three-year term on the GreenStone FCS Board, has been a
Farm Credit Board of Director for nine years, originally starting with Farm Credit Services
of East Central Michigan.
7| PARTNERS Fall 2007
What do you enjoy most about being a ready to retire, many will most likely need to sell or rent their
ground to another already existing farmer. I just really see that as
director of GreenStone FCS?
a problem…the lack of people in the younger generation with
More than anything, I really like the opportunity to be
the desire or the ability to get involved in farming.
involved with the other directors and management in helping
establish direction and make decisions on issues that impact the How would you describe the value GreenStone
Association. Just a couple of examples are the recent mergers FCS brings to its customers?
we’ve completed…first with the four associations in Michigan Well, Farm Credit has been around for a long, long time.
and then with northeast Wisconsin. The key reasons we followed While we’ve seen a lot of mergers and name changes in the
through with those mergers were really to benefit the members banking industry, the Farm Credit name has remained consistent
of our entire Association. Being involved in those types of and reliable. I can also say in general that our loan officers are
decisions is what I truly enjoy about being on the Board. typically more tenured and knowledgeable about agriculture
Of course, I’ve also enjoyed the opportunity to meet and than those at the competition. So for me, having a name and a
interact with the other board members, as well as the loan officer that consistently remains the same is a plus and
management and staff…GreenStone just has a lot of really good really helps set Farm Credit apart from the others.
people associated with it, and that makes being a Board member GreenStone always has been, and remains today, dedicated to
enjoyable. loaning money to farmers…it’s what we’re about and helps drive
What would you say is the most important everything we do.
issue facing farmers today? The overall economy at least in Michigan is
Well, I like to look a little further out on the horizon than obviously struggling. Do you feel the state can
some do, so my answer is really going to come from looking
some 10 to 15 years into the future. I think the biggest issue is
use the agricultural industry to improve our
finding an answer to the question of who is going to take over economic outlook?
for today’s aging farmers. In my particular area, I can look I’m not sure there’s a perfect answer for what we can do other
around and see that more than 50 percent of the farm families than to have agriculture continue to do what we’re doing. We’re
have children who will not be involved in the future of those doing a good job in agriculture here in this state…and that helps
farms. Take my own two daughters for instance…they have left in some way, because the more money we make the more taxes
and are not coming back to the farm. In my opinion, our farms we pay. Also, the many ethanol plants and other renewable
energy projects in our state could also turn out to be a positive.
I happen to be a real fan of ethanol and other renewable energy
“I THINK THE BIGGEST ISSUE IS FINDING AN sources…yet, I think it’s still undetermined how this is all going
to shake out.
ANSWER TO THE QUESTION OF WHO IS
I think our second and third industries in this state—
GOING TO TAKE OVER FOR TODAY’S AGING agriculture and tourism—are doing really well. However, our
number one industry—manufacturing—is still struggling and
FARMERS. IN MY PARTICULAR AREA, I CAN I’m not sure how we can go about turning that around.
We simply need to continue to be successful in what we do in
LOOK AROUND AND SEE THAT MORE THAN agriculture and hope that our elected officials make good
50 PERCENT OF THE FARM FAMILIES HAVE decisions and spend our money wisely.
CHILDREN WHO WILL NOT BE INVOLVED IN
THE FUTURE OF THOSE FARMS. ”
today are only going to get bigger and bigger, and that is mostly
because in many cases the next generation under the current
farmers is not going to farm. Therefore, when today’s farmer is
Fall 2007 PARTNERS |8
A big dream
Young, Beginning, and Small Farmer Focus
& ten acres
grapes... By Dick Lehnert
A merican wine and wineries
have been on the rise since the
Quite a few people in Michigan are
doing that. In 2004, the Michigan
1970s, in all states but especially Grape and Wine Council, which
Michigan, which has plenty of fruit promotes Michigan wine, set a goal
credentials upon which to build. for growth, suggesting acreage could
From a handful of wineries in 1970, grow eightfold to 10,000 acres by
Michigan’s industry has grown to 2024 and have a billion dollar impact
about 50—each with its own special on the state’s economy in wine sales
ambiance that seems to go with wine and tourism.
and its sophisticated image of crystal Rockie, age 29, and his wife Allison
glasses, oak barrels and splendid are not starry-eyed neophytes, however.
scenic views. He grew up on his family’s 300-acre
Rockie Rick would like to own a farm near Baroda in southwest
winery someday, and he made a start Michigan, where his parents, Dave
last year. He bought 10 acres of land and Judy, grow apples, peaches and
and planted wine grapes. cherries, just as Rockie’s grandfather
9| PARTNERS Fall 2007
had done before them. The area has planting year, a trunk is established up Growing wine grapes takes labor, and
excellent fruit sites, slopes with good to the lowest trellis wire, about 30 inch- Rockie says he spends about 20 hours a
sun exposure and air drainage, and 10 es above the week in the vineyards. He wants to
years ago the family tore out some peach ground, he said.
acreage—prime fruit sites—to plant 30 Then each year,
acres of wine grapes. four shoots are
Rockie decided to buy prime sites and selected and fas-
continue on that path. Moreover, he tened to the lowest
planted the hardest-to-grow, highest wire. Shoots grow
quality grapes, the cold-tender vinifera upward from those
varieties that make the most desirable canes. Fruit will
wines. So far, he has planted five acres of be borne in a zone
Gewurztraminer and Riesling and is just above the
planning to plant the other half to wire.
Merlot. Each year, old
“These grapes take the very, very best horizontal canes
sites,” he said. are pruned out in
What good are wine grapes without a March and April
winery? Rockie has a contract to sell the and four new
grapes to Tabor Hill, one of Michigan’s shoots from last
pioneering wineries. Demand for grapes year’s growth are
is growing as Michigan wine sales positioned and
increase by about 15 percent a year, he trained. These
Rockie standing among his
said, so selling good quality wine grapes are the fruiting now two-year old vines.
isn’t a problem. canes. Some
There is quite a lot of work involved pruning is also needed in August, mostly
in wine grapes, and so far Rockie and to remove foliage that shades the fruit. expand acreage in the future and will
Allison have done most of it themselves, It’s important to have enough leaves to need to hire more help.
but they do hire some help during peak produce sugars but not so many it Currently, farm labor and immigration
work times, espe- are key issues tied together, and the
cially harvest. future supply of orchard workers is in
It costs about “W ’
INE GRAPES DON T YIELD AS MUCH doubt.
$5,000 an acre for “With our trellis system, we can
the vines and the
AS ONCORD JUICE GRAPES BUT THEY mechanize,” Rockie said. “We can go
trellis system on
which they grow,
ARE HIGHER VALUE THEY YIELD THREE that way if we need to.”
Mechanical harvesters are routinely
Rockie said. The TO FIVE TONS PER ACRE AND SELL used for juice grapes now, and mechanical
vines are planted pruning systems are being developed.
5.5 feet apart in FOR $500 TO $2,000 A TON , Wine grapes don’t yield as much as
rows 9 feet apart, Concord juice grapes but they are higher
and they grow on a DEPENDING UPON THE VARIETY .” value. Rockie said they yield three to five
post and tons per acre and sell for $500 to $2,000
wire trellis. covers the fruit, he said. Sometimes, the a ton, depending upon the variety.
He uses a growing system called rising shoots need to be controlled by The other half of Rockie and Allison’s
vertical shoot positioning. In the hedging as harvest nears. time is spent on another business they
Story continued on pg. 11...
Fall 2007 PARTNERS | 10
started a year ago, a winery tour busi-
ness called Fruitful Vine Tours. It’s
described on their Web site,
They operate two 14-passenger “limo
coaches.” Customers, either in groups
that hire a limousine or individuals who
“hop on,” take a wine tasting tour of
wineries in southwest Michigan.
“This is more than just transportation,”
Rockie said. Those who take the tours
get an introduction to wine growing and
wine making as well.
To start the wine grape business,
Rockie turned to GreenStone Farm
Credit Services and Financial Services
Officer Karl Kincade.
“I was a new grower without much
collateral or capital,” Rockie said. “It
probably didn’t hurt that he had
financed both my father and my
Rockie was not totally without capital,
however. While GreenStone lent him the
mortgage money to buy the land, Rockie
put 20 percent down and has self-
financed the vineyard—so he’s built
plenty of collateral. He’d like to buy
more land, plant more grapes, build a
house on the property—and, of course,
there’s the dream of the winery.
Chances are, this young grower will be
seeing more of Karl Kincade in the years
Featured right are some snapshots of
Rockie’s winery tour business—Fruitful Vine
Tours. More information can be found on
their Web site, www.fruitfulvinetours.com.
11 | PARTNERS Fall 2007
GreenStone Farm Credit Services recently awarded $2,000
scholarships to four students from Michigan, who were chosen
by the College of Agriculture and Natural Resources at Michigan
State University; and two students in Wisconsin, chosen by a
committee of GreenStone FCS representatives.
This year’s scholarship recipients are:
Nicole DeFere Cody Kurzer
The daughter of Darin and The son of Ray and Candra
Shelly DeFere of Sturgeon Bay, Kurzer of Sebewaing, Michigan,
Wisconsin, is studying Animal is studying Biosystems
Science with a pre-veterinary Engineering at Michigan State
emphasis at the University of University.
Molly Gilbert Kayla Lehman
The daughter of Ronn and The daughter of Mark and Cindy
Mary Gilbert of Sturgeon Bay, Lehman of West Branch,
Wisconsin, is studying Michigan, is studying
Horticulture at the University Agribusiness Management at
of Wisconsin-River Falls. Michigan State University.
Eric Carson Ryan Rademacher
The son of Tom and Shirley The son of Thomas and Ann
Carson of Hesperia, Michigan, Rademacher of Eagle, Michigan,
is studying Dairy Management is studying Agribusiness
at Michigan State University. Management at Michigan
These students were chosen to receive the scholarships based on their academic performance, demonstrated leadership skills,
and community involvement through various organizations. GreenStone Farm Credit Services congratulates these fine students
and wishes all of them well in their future studies.
Fall 2007 PARTNERS | 12
Recreational Land Financing
RECREATIONAL LAND? By Larry Johnson
I magine for a moment that hunting season is nearing and you learn that the
land you’ve always been able to use has been sold and you are in need of a new
place to hunt. One of your options is to buy your own piece of heaven and eliminate
the worry of having a good place for your hunting activities. But, how do you do this?
What do you look for? How do you finance the purchase? These are all good questions
that need to be answered before buying your own piece of property.
There are several factors that any purchaser of recreational land should look at
before they sign on the dotted line. Among these are the features of the property, your
intended use, management, legal issues and financing. Let’s take a closer look at each
of these issues.
When looking for recreational property, one of the more important factors is to
determine just what you intend to do on the property. Do you plan to use it just for deer
hunting or for multiple uses, such as snowmobiling, off-road vehicle riding, bird watching or
just enjoying the great outdoors? Ask yourself what you plan to do, and whether the property
meets these goals.
The features of the property also need to be considered. Some of the features
you need to consider include the diversity of the wildlife that inhabits the
property. Take some time to walk the property thoroughly, taking note of the
wildlife that is there. Are there signs of deer, bear, upland game or small
game? Once you’ve done this, consider if the diversity matches what you
expected. Also, you should determine if the property has any of the
conveniences you consider important. Does it have access to any utilities?
Does it have a cabin, existing deer stands or camping areas? What are the
land uses for neighboring properties? These all can affect your usage of the
property in the future.
Maintaining recreational property can be very time consuming, depending
on your planned usage. Many deer hunters are becoming more involved in
Quality Deer Management (QDM) efforts. These efforts may require time to
plant food plots and investment in equipment and inputs, such as seed and
fertilizer. If the property is located in an area where many other land
13 | PARTNERS Fall 2007
owners are involved in QDM practices, you may need to be land sold by the use of land contracts. A land contract is an
involved as well. agreement between a buyer and seller outlining the terms of
Another area of management that should be considered is transfer of the property once the contract has been fulfilled.
timber management. If the property has a substantial amount Some lenders are able to provide mortgage financing for the
of timber, forestry management may need to be considered to purchase of the property, but terms can vary widely. Most
properly maintain the forest for the future. Working with a lenders offer repayment terms of up to 30 years, with interest
qualified forester will help the landowner determine if and rate lock periods ranging from one to five years. These are
when timber harvesting may take place to sustain the forest adjustable rate mortgages allowing the lender to change the
and potentially provide some additional income from the property. interest rate at the end of the fixed-rate period. GreenStone
It is important that you consider any legal issues that may be Farm Credit Services, which specializes in the financing of
presented with the purchase of recreational land. Some of the these types of properties, has fixed-rate loans of up to 30 years
things to consider are whether a clear title will be conveyed available for the purchase of recreational land.
upon transfer of the property, will you have legal access to the Other things that should be considered when financing
property, are there any rights being retained by the current or recreational land include closing costs and other fees, how
previous owners that you need to know about, and how do much down payment is required by the lender, what are the
you plan to hold title to the property. Title in real estate is payment frequencies available, what can you afford, and the
important, as any unpaid liens will allow someone else to quality of your credit. Down payments required by lenders can
claim an interest in the property and may cause you additional vary from 15 to 50 percent, depending on the lender’s credit
expense in clearing the title. Most lenders require that a clear parameters. Obviously, the lower the down payment the less
title be conveyed at closing, and they generally work closely cash the buyer needs to have at closing. Conversely, this creates
with the borrower and a title company to be certain that the a larger mortgage with larger payments. Closing costs can
title is properly conveyed. increase the amount of cash the borrower needs to have at
Access to property can be an issue. If there are not any closing. Most lenders require that the borrower pay for the
public right of ways that join the property, it is necessary for cost of the appraisal, application fees, processing fees, and
you to obtain easements from adjoining property owners filing fees. Talk to your lender about what these costs will be
allowing you to travel over their property to yours. In some at the time you apply for the loan and again a few days before
cases, landowners have sold to a third party the rights to mine closing. This will relieve some stress along the way. Many
minerals, harvest timber or to use the land for other uses. The purchasers of recreational property are wage earners with
purchaser needs to know if these rights have been transferred monthly incomes. Many lenders will structure payments to be
to a third party as they may affect the future usage of the monthly to match the flow of income to the borrower. Other
property. Lastly, the purchaser should determine how title to payment options may be available such as quarterly, semi-
the property will be held. Are you going to own this as an annual or annual payments. Talk to your lender about those
individual? Do you have a couple of friends who are joining options that fit your situation. The last consideration is the
you in the purchase of the property? Or, are you quality of your credit. The stronger your credit score, the more
planning to start an entity such as an LLC or Partnership to likely you are to receive the loan to purchase the property.
own the property? Also, do you plan to have your spouse as The purchase of that little piece of heaven can be rewarding for
part of the ownership? Answers to these questions depend on the buyer who looks at the situation as a business decision versus
your situation and it is recommended that you consult with an emotional decision. Hopefully this information will help make
your attorney to determine the best approach. your purchasing decision more of a business decision.
One of the most important aspects of purchasing recreational
property revolves around financing. Some people have been
Larry Johnson is the Manager of AgriConsumer Lending, Leasing and Trade
able to purchase recreational property from their savings, but Credit at GreenStone Farm Credit Services. A graduate of the University of
many of us are not in that position. So, how do you finance Nebraska, Johnson has spent eight years with Farm Credit and 35 years in the
financial services industry. You may e-mail him at email@example.com,
recreational land? There are several options available depending or for more information on GreenStone Farm Credit Services, visit
on the situation. There have been many parcels of recreational www.greenstonefcs.com.
Fall 2007 PARTNERS | 14
They’re more than lucky! 2007 Board Tour
GreenStone customers Bob and Terry Beagle of As part of the annual GreenStone Board of
Clayton, Michigan, have become avid horseshoe Directors strategic planning session held this past
pitchers and world class competitors in the sport. August, GreenStone FCS directors and senior
They both have won state championships in management had the opportunity to tour four
Michigan. Terry defeated the number one agricultural facilities in western Michigan.
women's player in the world at the Michigan/ GreenStone Farm Credit Services would like to
Ontario Friendship Tournament back on June 23 thank Michigan Turkey Producers in Wyoming;
in Kalamazoo, Michigan. She ranks sixth in Hogquest, LLC in Martin; Cornerstone Ag
Enterprises in Grand Junction; and Scenic View
Dairy, LLC in Fennville, for their hospitality and
willingness to showcase their operations.
GreenStone FCS Holiday
Card Coloring Contest
The time has come to
announce the annual
Holiday Card Coloring
Contest at GreenStone
FCS. Children 12 and
under who are related
to a GreenStone
FCS customer may
Bob and Terry Beagle with two of their many horse enter their artwork
shoe pitching trophies. for a chance to win a
$150, $100, or $50 U.S.
Michigan among all men and women pitchers.
Bob took third place in his class at the National
Horseshoe Pitchers Association of America World In addition to receiving the $150 U.S. Savings
Tournament on July 23 in Ardmore, Oklahoma. Bond, the first place winners will have their
The competitive classes are determined by artwork reproduced as the cover on their respective
average ringer percentages from cumulative branch’s Holiday Greeting cards. Entry forms are
tournaments. Bob averages 29 and Terry averages now available at your local GreenStone FCS
62 ringers out of every 100 pitches. branch and are due back by Wednesday, October
They started competing in professional 31, 2007. See your local branch for more details
tournaments just five years ago. They also farm or visit www.greenstonefcs.com to get your entry
700 acres of soybeans and wheat in Michigan's form today.
Lenawee County. Congratulations to Bob
15 | PARTNERS Fall 2007
Want Peace November 20 is the sign up deadline
of Mind? for purchasing a new fruit crop
insurance policy or for making
Protect your investment with changes to your existing policy.
There’s no doubt that farming is a risky business. That’s why for years,
GreenStone FCS has been helping producers manage their risk with Crop
Insurance. Our experienced Crop Insurance specialists can help tailor a policy
that meets your individual needs and will protect your financial future.
Make the decision today that
will protect you for tomorrow!
Visit your local GreenStone FCS branch or call
EOE 1-800-444-FARM • www.greenstonefcs.com
GreenStone FCS Board Appoints Officers
and Committee Members
The GreenStone Farm Credit Services Board of Directors has Saginaw County, from Region I. Four Board members were
recently announced its new officer and committee also appointed to the Audit/Review Committee—they are
appointments. Those holding officer positions are Lyn Uphaus, Larry Bodtke, Van Buren County, from Region IV; Dave
Washtenaw County, from Region III, Board chairperson and McConnachie, Sanilac County, from Region II; Bill Oemichen,
Executive Committee; Darl Evers, Allegan County, from appointed director; and Brian Haskin, Eaton County, from
Region IV, Board vice chairperson and Executive Committee; Region VI.
and Frank Engler, Isabella County, from Region V, Executive Also, Brent Wilson, Gratiot County, from Region V, was
Committee. appointed as the District Farm Credit Council Representative.
Appointed to the Asset/Liability Committee were Dave
Rakowski, Oconto County, from Region VII; and Gil Ritter,
Fall 2007 PARTNERS | 16
GreenStone’s Referral That's right, as a customer, if you refer your
friend, co-worker, family member or anyone else
Program Offers to GreenStone for new business, along with our
thanks you’ll receive a $50 gift card!
Customer Rewards! Contact your local branch for more
Now, current customers can share the benefits information. Some restrictions apply.
of GreenStone with others and earn rewards.
Fall into a career
If you are a soon-to-be college graduate or you know one,
GreenStone is looking for high caliber professionals to join the team.
Consider a future with GreenStone FCS in one of the following fields:
• Agricultural Lending
• Consumer & Rural Residence Lending
• Credit Analysis
• Appraisal Services
• Tax / Accounting Services
• Corporate Accounting
• Human Resources
• Information Technology
For more information or to view current career opportunities
go to www.greenstonefcs.com/about/jobs.cfm
17 | PARTNERS Fall 2007
GREENSTONE AND MI FFA MAKE
A SPLASH AT THIS YEAR’S AG EXPO
GreenStone FCS and the Michigan Future Farmers of America Foundation teamed up at the 2007 Ag
Expo in July to raise $1,830 for the MI FFA Foundation. GreenStone featured a dunk tank where
GreenStone staff members were dunked and $5.00 was donated to the Foundation each time a GreenStone
employee went into the water. Miss Michigan 2007 Kirsten Haglund threw the honorary first pitch of the
event and many adults and children enjoyed the wet fun during the Expo.
Fall 2007 PARTNERS | 18
Because...the benefits of leasing can
keep more cash in your pocket!
With year-end approaching, now is the perfect time to compare the benefits of leasing to traditional financing.
At GreenStone Farm Credit Services, our lease programs can deliver improved cash flow, increased financial
flexibility and tax advantages. Whether it’s for equipment, vehicles or facilities, a lease with GreenStone FCS
could provide both short- and long-term benefits. Contact your local GreenStone office today to find out if leasing
is right for you…be sure to ask about our popular Tax Payer Special Lease and Sale/Lease Back programs.
This newsletter is published quarterly
for the customers of GreenStone Farm
Credit Services. 1760 Abbey Road
East Lansing, MI 48823
PO Box 22067
Lansing, MI 48909