Celebrate Cooperative Month!

Now that the calendar has officially flipped from September to October, we are reminded of what this month typically brings with it.

The leaves change colors, revealing the beautiful fall foliage. Farmers spending long hours harvesting their crops and tending their fields. The popular pumpkin spice flavored items line the shelves of supermarkets and coffee shops.

If you have kids, you know that they are slowly counting down the days until Halloween when they get to dress up as their favorite sports star, Disney princess or some type of monster, all while enjoying the sweet treats that are given out during trick-or-treating.

But what you may not know is that October is also Cooperative Month in the U.S. This is a time when we celebrate all the great benefits co-ops provide for their member-owners and the communities they serve!

Before we get too far into the history and importance of co-ops, it might be helpful to give a refresher for those who may not  be all that familiar with how a cooperative works.

The Small Business Administration defines a cooperative as a “business or organization owned by and operated for the benefit of those using its services. Profits and earnings generated by the cooperative are distributed among the members.”

Co-op Month-Family

Image courtesy of the Cooperative Network

The practice of celebrating Co-op Month actually dates back to 1948 when the State of Minnesota became the first to recognize this special time. Although it has been recognized for nearly 70 years, the idea of forming a cooperative dates back much further.

In 1752, the Philadelphia Contributorship for the Insurance of Homes from Loss by Fire was started by none other than American Founding Father Benjamin Franklin. This marked the first official co-op in the American colonies. The Philadelphia Contributorship was designed as a mutual insurance company for its members. According to the Cooperative Development Institute, the Philadelphia Contributorship is also the oldest continuing co-op in the U.S., still going strong after 263 years!

Much has changed, though, since Franklin’s time. Cooperatives now come in all sizes, and represent a diverse number of industries.

One of the largest industries is agriculture. It will not take you long to find a co-op representing nearly every commodity or livestock type. In fact, Minnesota-based CHS Inc. and Land O’Lakes, Inc. are the two largest cooperatives in the U.S.

Several agricultural co-ops date back to the 1800s. The dairy industry is a prime example of having a rich history of being member-owned. Dairy co-ops have grown so much over time that they now account for more than 78 percent of marketed U.S. milk, according to the Cooperative Network.

But production agriculture needs financing in order to operate. That is where we come in!

After passing through Congress, President Woodrow Wilson signed the Federal Farm Loan Act of 1916, which eventually gave birth to the Farm Credit System. Since then, member-owned associations formed in order to help meet the changing financial demands of rural agriculture communities.

The Farm Credit System and United FCS will be celebrating our 100th anniversary in 2016. We will certainly bring you more information about that as 2016 draws closer.

So what do cooperatives mean for Minnesota and Wisconsin? The short answer is that they play a vital role for these two upper Midwestern states. Minnesota is home to the largest number of co-ops in the nation, totaling more than 800. Beyond that, co-ops in Minnesota serve 3.4 million member-owners.

Over 700 co-ops call the state of Wisconsin home, serving an impressive 3 million people.

We hope you will join us in celebrating all the amazing work cooperatives do. With the support of more than 6,000 members, our association continues to make a difference in the lives of those living in rural Minnesota and Wisconsin.

Happy Co-op Month!

Dawn Mroczenski joins UNITED FCS

Contact: Lynda Hauge, HR Director
United FCS
(320) 214-5007

Dawn MroczenskiSeptember 28, 2015 – Dawn Mroczenski recently joined United FCS as a Financial Services Associate in the Medford Office. As a relationship manager, she will be serving the business needs of agriculture producers and businesses in Marathon, Clark, Taylor and Price Counties by providing credit, financial services, and crop insurance solutions to meet the ever-changing needs and challenges of the industry.

Mroczenski graduated with a Bachelor of Science degree in Agricultural Education from the University of Wisconsin – River Falls. She has 5 years’ experience teaching Ag Education at area high schools. She is involved in 4-H and is a lifetime member of the FFA Alumni. Dawn and her husband ran a dairy farm for many years.

United FCS is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture and the nation’s rural economy. Serving over 6,000 customer-members and with over $1.7 billion of assets, United FCS has a primary focus in a 22-county service area in West Central Minnesota and North Central Wisconsin providing loans, leases and a wide array of financial services through 12 branch office locations and 190 employees.

Why having a succession plan is important

Linda BratzBy Linda Bratz, Senior Tax Accountant

The family farm is an important part of agriculture as well as our rural economy. You have put a lot of time and hard work in to get your farm business to where it is today. Now you want to step back a little and enjoy retirement, what is the next step?

The dream is that the farm will pass to the next generation. What do you need to do now to start the process of transferring the farm to the next generation? Is there a next generation willing to take it over?

This is where a good succession plan comes into play. A good succession plan prepares for your future and ensures that the farm stays in good hands. It also gives you peace of mind.
Succession planning is a process, not a one-time event. The sooner you start the more options you have available.

Succession planning requires putting together a strong team to advise you. This will include your tax preparer, attorney, loan officer and possibly a consultant or facilitator along with all interested family members. Your investment adviser and insurance agent should also know what you are planning. All parties should work together. Multiple meetings should be planned with the initial discussions used to set up a framework to be followed. Communication is key for the entire team to work well together.

Failure to plan limits your options and creates discord among family members. If the owner of a farm dies without a succession plan, state law dictates how the farm and assets are distributed, giving the family little say in the matter.

Your team will help you to consider all options. Your tax preparer will seek to keep the tax aspects of your decisions as low as possible to help with the continuation of the business. Your attorney will draft the documents needed to carry out your plans. Your loan officer will help determine if the plan is something the next generation can afford. Farmer and son

Succession planning for farmers is unique and no two situations are the same. Farm families have often lived on the same farmland for generations and have strong emotional ties to the land.

A successful succession will address your financial security in your retirement years and will balance that with the financial position of your successor. It will also address the knowledge and skills of your successor to continue the legacy of your farming operation.

All family members should be considered. However, that does not necessarily mean equal distribution among all children. Some children may be entitled to more or less of the estate based on their personal sacrifice to their parents or the farm.

A well-structured succession plan increases the chance of the continued profitability of the farm along with family harmony.

It is our hope that you will take this important step in securing a successful transition to the next generation. Remember, if you have questions, do not be afraid to ask!

Tips to keep you safe during fall harvest

Tractor Driving Through Town


The fall harvest season can be an exciting time for farmers. After all, it is always nice to see a finished product that you have spent so much time planting, cultivating and watch grow. In Minnesota and Wisconsin, crop conditions are looking very promising this year.

But fall harvest can also represent a time of greater risk for accidents. Given the increased amount of farm equipment on the roadways, the odds of a vehicle colliding with heavy machinery also increases.

For this reason it is important to learn about or review safety information. We have assembled a list of helpful tips to keep both farmers and motorists safe this harvest season!

For farmers:

The following safety recommendations come from Nationwide Insurance:

• Display the Slow Moving Vehicle (SMV) emblem on all off-road vehicles. Make sure emblems are in good condition and properly mounted.
• Use proper vehicle lighting.
• Use flashers anytime you use public roads. The American Society of Agricultural Engineers (ASAE) recommends two flashing amber lights, mounted at least 42 inches high, in both the front and rear.
• Comply with your state laws. Most state laws require using headlights 30 minutes before sunset, until 30 minutes after sunrise. Also use headlights whenever insufficient light or unfavorable weather conditions exist. ASAE recommends two headlights on the front, at the same level, positioned as far apart as possible. They also recommend one rear-left and one rear-right red taillight mounted as far apart as possible, and two red reflectors visible from the rear.
• Inspect hitches to verify they are sturdy and properly mounted before towing equipment or using wagons. Always use safety chains, if equipped.
In addition, depending on the location of where you farm, it can be tricky entering or exiting your field. Making sure you are visible at all times is one of the most important keys to driver safety.

For motorists:

The Michigan State University Extension office offers up the following safety tips for non-agricultural motorists:

• Slow down immediately when you first see farm equipment ahead of you on the roadway. Farm equipment usually travels less than 25 miles per hour. It takes less than seven seconds for a car traveling at 55 mph to crash into the back of a tractor 400 feet away.
• Be patient and wait for an opportunity to safely pass farm equipment. The tractor or combine operator will probably be aware of your presence and will try to accommodate if possible as traffic begins to back up.
• Drive defensively when approaching on-coming farm equipment. Impatient motorists may pull out suddenly to pass the farm equipment and enter your lane.
• Be on the alert when you see amber flashing lights ahead in either lane.
• Be prepared to stop at railroad crossings when following a vehicle towing an anhydrous ammonia tank. Anhydrous ammonia tanks look like the large propane gas tanks used by rural homeowners.

To add a few tips of our own, keep in mind:

• If you are trying to pass machinery, make sure they are not making a left hand turn. It can be difficult to determine this at times if a turn signal is not visible or covered in dirt/dust. Understand that if farm machinery moves further to the right it may appear that they are intending to let you pass by, but they could also be positioning themselves to take a wider left turn.
• Not all road surfaces are ideal for passing large equipment. Recognize what is ahead of you before you make your move.

We wish everyone a safe and successful harvest this fall. Remember, be visible, be cautious and be patient when encountering heavy equipment on all roadways.

Looking back at our 2015 customer picnics

With the summer season all but over and kids going back to school, we want to relive some of our favorite moments from the past few months.

Customer Picnic Infographic

Every year our 12 branch locations in Minnesota and Wisconsin host a customer picnic to show a small token of our appreciation. These events give staff the ability to connect with members face-to-face – an opportunity that’s not always easy to work in given how busy life can be.

This year, we were able to meet over 2,600 members at our picnics. We gave away a lot of great prizes like gift baskets, paintings, copies of the Farmland documentary and of course, cheese curds.

Be sure to scroll through the picture slideshow below, which will give you a quick glimpse of all of our picnics. If you weren’t able to make one of our events this summer, don’t worry. There will certainly be another 12 chances next year!

Again, from all of our staff at United FCS, thank you!

Redwood Falls
Redwood Falls
Stevens Point
Stevens Point

Managing inputs and thinking long-term

Bob PanzerBy Bob Panzer, Risk Management Officer

Too often in the world I see and hear of people concerned about the purchase price or the cost of something. This is true of farmers, taxpayers, homeowners and most consumers.

Cost is a number the sellers place on an item. Buyers really concentrate on the cost, and it is easy to focus on. One pickup has a price and the one next to it in the lot or down the road at another dealership has a different price on it.

Often when making larger purchases, buyers will look at the payment amount. The cost is simply broken down to a smaller amount to focus on. Often this is done with large public bonding issues also. The simple question is how much does it cost each month or each tax bill?

The real challenge is what are you getting for your money? Will the investment pay off and how much will it pay off?

With margins narrowing in the agriculture economy, return on investment is more important than ever. Will the bag of seed corn that costs $325 give the buyer greater returns than the bag that cost $250? Will the higher priced bag have greater yields that result in great profits?

This appears to be a rather simple example. If we get 30 more bushels of corn at $3 a bushel we get $90 more per acre with just a small investment.

At times it is harder to measure our return on investment. The results may not be measurable for years down the road. Several examples are in the public sector such as roads and schools. A bargain priced road may last seven years and a road surface that is twice as expensive may last four times as long.

A school board that decides to purchase iPads or other tablet learning devices may see a quick jump in reading test scores, but will the children retain this advantage and move on to be great contributors to our society?

Long-term returns on investment are often hard to put a number to. In agriculture, one example may be a large forage harvesting machine. Measuring the return on this type of investment will require many steps:

Will I harvest forages at better quality to make more milk per acre?

Will I have additional time to do a better job of managing cows and staff members resulting in additional profits?

Perhaps if the equipment is owned jointly with another dairy could we both benefit from the investment?

The steps require the buyer to look at how profits could improve by reducing costs and increasing revenue.

Agriculture is at a crossroads at this moment in time. We are in an era of lower returns. Each decision made on an input is very important. Day-to-day inputs as well as long-term items need to be reviewed and thought about.

This new era requires that inputs be looked at as investments, not purchases. Question each input as to what is my return on that investment? Lower priced items also may have low or no returns to justify the purchase. Higher priced items may bring poor results or no better results than a lower priced item. Research is required when making decisions.

One major tool when doing research and making decisions is the use of enterprise budgets. Many of the major agricultural colleges offer free software for enterprise budgeting. Once you have researched and looked at options it is time to make decisions. Sometimes the final decision may not result in the greatest return on investment, but it is one that is made based on personal preferences or other factors.

*This article originally appeared in the Fond du Lac Reporter on September 5, 2015.*

Is an interest rate hike on the horizon?

Bob HainesBy: Bob Haines, Chief Financial Officer

Predicting when the Federal Reserve will start raising interest rates is a tricky business. We have seen historically low rates in the U.S. since 2008, when the Fed slashed the Federal Funds Rate to near zero in an attempt to jump start a staggering economy. Economic growth began again in mid-2009, but has been slower than in recent recoveries – although better than many developed countries.

For the past few years, the Fed has laid out benchmarks for the U.S. economy to achieve before rate hikes would be considered, such as a target rate for unemployment and inflation. Those numbers have been reached or approached, but the Fed has yet to take action.

It is yet to be seen how events unfolding around the world will factor into any decision by the Fed. For example, earlier this summer the country of Greece faced strict deadlines for debt repayments with its creditors. They ultimately accepted another loan package from the European Union, but the situation created uncertainty.

A potentially bigger issue may be China. We recently witnessed turmoil in the U.S. stock market, which was reacting in large to reports of a slowing Chinese economy. This presents greater challenges to agriculture being that China is our number one importer.

Despite these potential setbacks, minutes from the latest Fed meetings have many experts predicting that a rate hike could finally be coming our way as soon as this year.

In a recent post, Matthew Monteiro of Farm Credit Mid-America examined the past 65 years of interest rates.

“A look at 10-year U.S. treasury rates — what the government pays to borrow money — shows that rates haven’t been this low since the 1950s, when rates began a steady march upward. During the stagflation era of the 1970s and early 1980s, rates rose. Soon thereafter inflation cooled and rates started trending down, and have continued to do so for more than 30 years. There have been upward bumps to treasury rates along the way, with the Fed adjusting every few years in response to economic events, but the long-term trend has been down.”

Monteiro concludes by saying, “Considering the long-term trend of interest rates, the unsustainability of the historic lows since the 2008 economic crisis, and continued modest U.S. economic growth, we may be on the verge of an increase in rates.”

So, what does all this mean for you? Interest Calculator

If the Fed does raise the interest rate, it would likely be a modest bump, initially. A steep rate hike has the potential to send a slow growing economy back into recession and spook an already turbulent stock market. However, both various Fed officials and many experts feel an initial modest rate bump is likely to be the start of a longer-term trend.

The impact higher rates will have on personal finances will be dependent on your personal situation. Borrowing costs will increase on new loans. Those that have a variable rate will also notice a difference.

Given the historic low rates, and the looming possibility of a rate increase, we encourage each of our members to carefully consider their finances. If you are thinking of making a purchase or expanding your operation, now might be a good time to lock-in a favorable rate. This move could potentially save you money over the course of a loan. Also, if you have paid cash for capital purchases the past few years, now is an ideal time to rebalance those purchases to a longer term fixed rate real estate loan. This helps reduce the risk to your operation if interest rates do increase.

We want to be a resource for you when it comes to making financial decisions. If you are considering making a capital purchase, contact your local United FCS office and ask about our special interest rate offer that runs through October 1, 2015.

Large sugar beet harvest expected: What you need to know

sugar beets










Agriculture has always been dependent on the weather. Thankfully, the 2015 growing season has been positive across much of Minnesota and Wisconsin. This year’s weather has allowed for a potentially large crop of sugar beets. So large, in fact, that there is talk among the industry of a harvest too big to completely process.

Given this scenario, it is possible that some acres of sugar beets will be left in the fields. Recognizing this, we want to make sure each of our members is aware of the guidelines surrounding this scenario.

At United, we are working closely with insurance providers regarding the appraisal procedures that they will follow in this situation. Please keep in mind that the 2015 over-production/bypass situation is different than what was experienced in 2013, when frost-damaged sugar beets were being rejected.

It is important to remember that the act of leaving acres unharvested is not a peril covered by crop insurance policies. Such policies cover perils caused by Mother Nature, including wind, drought, excess moisture, freeze, lightning, etc. It does not cover unharvested crops that were rejected due to capacity issues unless the acres were also previously damaged by a covered peril.

The Risk Management Agency or RMA, which acts as the governing body of Multiple Peril Crop Insurance, issued a bulletin on August 4, 2015, instructing insurance providers on how to address the unharvested production from sugar beets left in the field due to a lack of processing capacity. The bulletin includes the following:

Definition/Clarification of “Coverage End Date”
• “Once the acreage has been left unharvested because the production will not be accepted by the processor . . . insurance on the abandoned acreage ends.”

Non-Loss Units
• If more than 50% of the unit was harvested – RMA granted approval to use the average of the harvested acres.
• If less than 50% of the unit was harvested – an appraisal was required.

Loss Units
• Appraisal needed in all cases.

Please also remember that adjuster authorization is necessary before unharvested acres can be destroyed. If you have concerns that a unit may have a loss, please contact your agent immediately, so a possible Notice of Loss can be submitted.

We will continue gathering information regarding the appraisal process as it becomes available.
Make sure to check us out on Facebook and Twitter for any updates.

We wish you a safe and successful harvest!

Brianna Spielmann joins UNITED FCS

Contact: Lynda Hauge, HR Director
United FCS
(320) 214-5007

Brianna SpielmannAugust 13, 2015 – Brianna Spielmann recently joined United FCS as a Loan Processing Specialist in the Redwood Falls Office. As a loan processing specialist, she will prepare closing documents and provide support to regional teams in the delivery of credit.

Spielmann has completed Legal Admin classes through Ridgewater College. She has experience in the areas of UCC’s, legal descriptions and legal documents. Brianna and her son reside in Redwood Falls.

United FCS is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture and the nation’s rural economy. Serving over 6,000 customer-members and with over $1.7 billion of assets, United FCS has a primary focus in a 22-county service area in West Central Minnesota and North Central Wisconsin providing loans, leases and a wide array of financial services through 12 branch office locations and 190 employees.

Bringing agriculture to the big screen

After serving agriculture for nearly 100 years, we know that each and every farmer has a unique story to tell. Maybe it’s a tale of pioneering spirit. Or maybe it’s a desire to produce food for not only your neighbors, state or country, but the entire world. Either way, each and every story can serve a vital purpose.

However, these stories aren’t always easy to convey. Although the history of our country is steeped in agriculture, it has become increasingly more difficult for those within the industry to effectively reach people who have never taken a step on a farm. In fact, farm and ranch families now only make up two percent of the United States population. The long-term trends of those demographics also show continuing decline.

Because of this, our society is becoming more urbanized, and each generation is one step further removed from the farm. This trend can present challenges for the agriculture industry. It’s important that both the agriculture and non-agriculture communities be on the same page in order to avoid any misunderstandings.

In being proactive, United FCS has been looking for new ways in which we can better bridge these two camps. Luckily, a documentary was created to help give the general public a little view into what life is like on a farm or ranch. Since seeing the film, ourselves, we’ve launched an effort to host community screenings throughout our local service areas in Minnesota and Wisconsin.

Farmland Movie Poster

About “Farmland”

“Farmland” was made possible thanks to major funding by the U.S. Farmers and Ranchers Alliance as a way to show viewers where our food comes from and what it takes to produce it. At a time when different challenges are being thrown at agriculture, the film helps make the connection between food growers and consumers.

The plot of the documentary follows six young people, all in their ’20s, as they run their own farm or ranch. These real life characters do not shy away from addressing some of agriculture’s most pressing issues, such as genetically modified organisms (GMO), antibiotics in animal feed and the treatment of farm animals. The film highlights the real struggles and triumphs that farmers and ranchers face every day.

Each character represents a different operation, including cattle, poultry and hogs. But the film also looks at how traditional crops, like corn and soybeans, are grown along with different types of organic foods.

The different points of view shows the audience how vastly diverse agriculture can be around the country. By the end of the movie you’ll be able to see how far modern farming techniques have come as some of the latest technology is showcased throughout.

Community screenings

Farmland Screening

A packed room during our Willmar screening.

Altogether, nearly 1,000 people have attended one of our screenings. We’ve shown “Farmland” in movie theaters, event centers, school auditoriums, college cafeterias, county fairs and yes, even in a barn!

Thankfully others also share our interest for a great cause. We’ve partnered up with local Farm Bureau groups, FFA chapters and area Chamber of Commerce organizations.

Each community screening brings more awareness and sheds more light on the hard work farmers go through to produce the food that we eat. The reviews from our community screenings have been nothing but positive. Many movie-goers have said they would like to see additional opportunities for the general public to learn more about farming.

To add another element to our screenings, we organized a brief question and answer session following the movie. Here, a local agriculture expert addressed any comments or concerns about both the film and the industry. Bringing awareness to the film is good, but we strive to make the event more educational for those in the audience.

Overall, the film runs 77 minutes in length, and is directed by the award-winning James Moll. If you’re interested in seeing the film, you can pick up a copy at the nearest Walmart, or by ordering online.

We hope that you’ll join us in our effort to bring the farm life to the American public. Finding success in agriculture is key to feeding the hungry world for which we live in.