President’s Message
A Farm Debt Crisis?
George Putnam, president and CEO, Yankee Farm Credit
likely that FCA will act more quickly and vigorously
Agricultural commodity prices are sky-high. As I
than it did in the 1980s.
write this, corn prices are over $6 per bushel and
wheat prices are more than $8 per bushel. Such
• Second, the Farm Credit System Insurance Fund
prices were unheard of as recently as one year ago.
was established as a result of the System’s difficulties
The feature article in this issue of Financial
in the 1980s. This fund, which insures holders of the
Partner magazine discusses this phenomenon. As
System’s bonds, totals $2.6 billion, about 1.7 percent
noted in the article, many factors cause increased
of outstanding bonds.
commodity prices, including the use of farm products
• Third, the Farm Credit System’s loan quality is
for both energy and food, increasing demand from
much better than in the 1980s. The ratio of high risk
developing countries, such as China and India, and
loans to total loans is a good measure of loan quality.
the weakening U.S. dollar.
This ratio was 14 percent in 1985 and
Midwest crop farmers are
peaked at a whopping 26 percent in 1986.
responding to high prices for their
For reference, we consider 2 percent or less as
products by increasing production.
“Several
aspects
the standard for this ratio. This ratio was 0.4
Many are incurring additional
percent at year-end 2007 and 0.5 percent at
debt to buy land or equipment.
of the Farm Credit
the close of the first quarter 2008. Both are
Operating debt is increasing
System
are
different
excellent numbers.
to finance high input costs.
Farmers’ cooperatives need more
Nevertheless, it’s good to be cautious.
from the 1980s.”
working capital as their inventories
Credit quality can deteriorate quickly, and
and receivables become more valuable.
with little warning. And the System’s capital
As a result, the Farm Credit
position is being tested by the recent
System (FCS) has seen significant loan growth.
growth in loan volume.
Total FCS loan volume grew by 16 percent in
Your association is healthy. Yankee Farm Credit
both 2006 and 2007 and by another 7 percent in
has not seen the growth that the Midwest has seen.
the first quarter of 2008. (Results for the second
Loan volume grew by 2 percent in 2007 and actually
quarter of 2008 are not available as of this writing.)
fell in the first quarter of 2008. Loan quality is excelMany will remember when the Farm Credit
lent, with only 0.3 percent high risk loans. Capital
System experienced significant growth in the 1970s
remains strong.
and early 1980s. That period ended badly in the
At Yankee Farm Credit, we are proud to be able to
farm debt crisis of the mid 1980s. Many farmers
meet the credit needs of agriculture in our territory,
went bankrupt, and some lenders, too.
as we, and our predecessor associations, have for
Healthy FCS institutions, including the predecesmore than 92 years.
sors of Yankee Farm Credit, were required to make
payments to support failing institutions. Even so, the
Farm Credit System survived only because Congress
provided temporary financial assistance, which the
System fully repaid by 2005.
Could a farm debt crisis happen again? Perhaps.
For more on “A Farm Debt Crisis,” stop by our blog yankeeaca.blogspot.com.
But several aspects of the Farm Credit System are
As a result of a member’s question after our April annual meetings, I published
different today.
a series of three posts on this subject on April 28. Those posts are available
• First, the Farm Credit Administration is a stronger
regulator. If System institutions get into trouble, it is
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Financial Partner • Summer 2008
in the blog archive. I will post updated information after the System’s second
quarter results are available.
Association News
Meet your new directors!
This past director election brought Celeste Kane-Stebbins to the board for her first term and Walter Gladstone
back to the board after several years
Celeste Kane-Stebbins is a native of Sheldon. Celeste and
her husband, Gregory Stebbins, own and operate Stebbinshire
Farms, a 450-head dairy enterprise where they milk 275
cows. Celeste and Greg began farming in 1976 when they
purchased a farm in West Enosburg with a Farm Credit
loan. They expanded in 1993 by buying Celeste’s parents’
farm in Sheldon, which is where the family lives today.
Ten years later in 2003, Celeste and Greg bought a
neighboring farm to raise replacement livestock and leased
two other nearby farms for cropland. In addition to the
dairy operation, Celeste and Greg harvest and sell maple
syrup, lumber and firewood. The farm employs four
full-time workers — including two of their sons — and
two part-time employees.
When the couple was just starting out, Celeste milked
cows, cared for youngstock, helped with crop work and kept
the books. (Whew!) As the business expanded, however, the
operation’s complexity and fiscal management responsibilities
grew right along with it. That’s why Celeste now focuses
solely on bookkeeping, payroll and tax preparation.
As if that were not enough to keep her busy, Celeste
is a full-time registered nurse managing the Education
Department at Northwestern Medical Center in St. Albans
and a part-time emergency department nurse.
Celeste earned a bachelor’s degree from the University
of Vermont and a master’s degree from the University of
Phoenix. She is a member of Sigma Theta Tau International,
nursing’s honor society. And she is the mother of four children:
Emily, Michael and twins, Matthew and Sean.
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Financial Partner • Summer 2008
In her spare time (spare time!), Celeste is an involved
community member serving on the Sheldon School Board
for more than eight years; the Franklin County Farm Bureau
Board of Directors for seven years; and the Cold Hollow
Career Center Health Advisory Board for three years.
She is also the cofounder of The Healing Circle Breast
Cancer Support Group and an Emergency Nurses CARE
(ENCARE) nurse. In addition, Celeste is a lector and choir
member at her church. And she was a former Community
Health Center board member.
As the saying goes, “If you want something done, ask a
busy person to do it.” They seem to be able to find more
time in their packed schedules to take on another job —
and do it well.
The members of Yankee Farm Credit certainly chose an
accomplished — and busy — person to sit on our board
when they elected Celeste Kane-Stebbins. We look forward
to the opportunity to work with her.
Walt Gladstone and son Will
Matt Gladstone and Walt
Walter M. Gladstone
Many of you will remember Walt Gladstone, who served on the
Yankee Board from 1995 to 2000. Here’s a little more about Walt.
Walt lives in Bradford, Vt. and owns and operates
Newmont Farm, LLC with his wife, Margaret, and three
sons, Will, John and Matt. Newmont Farm has grown from
80 cows in 1988 to more than 900 cows today.
Walt also grows more than 150 acres of pumpkins that he
wholesales locally and throughout New England. After graduating from Vermont Technical College this spring, Walt’s oldest
son, Will, plans to return home to become the farm’s herdsman.
Walt’s other sons, John and Matt, work for a local custom
harvester, cropping locally and for Newmont Farm.
Walt is on an advisory board for the local school, serves as
president of the New England Family Dairy Farms Cooperative,
and is a former Yankee Farm Credit board member.
FPO
www.YankeeACA.com
Director Election Results:
Each seat is for a three-year term
• Celeste Kane-Stebbins, of Enosburg Falls, Vt., was elected from Region 1 (Chittenden, Franklin and Grand Isle
counties in Vermont; Clinton and Essex counties in New York).
• Walter M. Gladstone, of Bradford, Vt., was elected from Region 2 (Caledonia, Essex, Lamoille, Orange, Orleans
and Washington counties in Vermont and Coos and Grafton counties in New Hampshire).
• Paul E. Doton, of Woodstock, Vt., was reelected from Region 3 (Addison, Bennington, Rutland, Windham and
Windsor counties in Vermont and Cheshire and Sullivan counties in New Hampshire).
Crop Insurance for Local Growers
An essential risk-management tool — part of Yankee’s agricultural business services
At Yankee Farm Credit, we understand your need to protect your investment in the crops you grow, tend and
harvest — from the ravages of wind, rain, cold, drought and infestation, even against drastic fluctuations in price.
That’s why our own Shantel Thomas is a crop insurance expert who can offer you local first-rate service.
Shantel understands the unique risks associated with crop management and is ready to help you create a sound
risk management plan.
Crop insurance offers many options: With Yankee Farm Credit, crop insurance is flexible and can be precisely
tailored to meet your business goals and objectives. Consider the following options:
• Multi-Peril Crop Insurance
• Hail and Adjusted Gross Revenue
Final dates to purchase coverage: In most cases, you must purchase crop insurance according to seasonal cycles.
• Spring crop sales (corn, sweet corn, soybeans): March 15
• Fall crops (apples): November 20
• Specialty crops:
- Nursery: May 1
- Adjusted Gross Revenue: January 31
- Adjusted Gross Revenue Lite: March 15
- Dairy Cattle Livestock Gross Margin (LGM): End of each month
Why wait? The risk is too great. For help in selecting an affordable plan
for your business, call or contact Shantel today!
Shantel Thomas
St. Albans office
Phone: 800.545.1097
E-mail: [email protected]
The 2007 Northeast Dairy Farm Summary is available at all Yankee Farm Credit branch offices.
Highlights of the summary are on our Web site at www.YankeeACA.com.
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Financial Partner • Summer 2008