BusinessServices toHelp You Increase ProfitsA Best Practice Guide forAgricultural Businesses

Financial record-keeping

Tax planning & preparation

Payroll services

Consulting for business success

Estate planning

Grant writing

GenerationNext

Appraisal services

Financial benchmarking

Insurance Services

Country Living Loans

FarmStart

Loans and leases

Auburn

Presque Isle

Farm Credit East OFFICE LOCATIONS

Auburn615 Minot Avenue Auburn, ME 04210800.831.4230

Batavia4363 Federal DriveBatavia, NY 14020800.929.1350

Bedford2 Constitution DriveBedford, NH 03110800.825.3252

Bridgeton29 Landis AvenueBridgeton, NJ 08302800.219.9179

Burrville 25417 NY Route 12Watertown, NY 13601800.626.3276

Claverack190 State Route 9HHudson, NY 12534800.362.4404

Cobleskill2668 State Route 7, Suite 21Cobleskill, NY 12043800.327.6588

CortlandOne Technology Place, Suite 2Homer, NY 13077800.392.3276

Dayville785 Hartford PikeDayville, CT 06241800.327.6785

Enfield240 South RoadEnfield, CT 06082800.562.2235

Flemington9 County Road 618Lebanon, NJ 08833800.787.3276

Geneva 1450 Route 14Phelps, NY 14532800.929.7102

Greenwich394 State Route 29Greenwich, NY 12834800.234.0269

Hornell1155 Airport RoadHornell, NY 14843800.929.2025

Mayville28 E. Chautauqua StreetMayville, NY 14757800.929.2144

Middleboro67 Bedford Street,Middleboro, MA 02346800.946.0506

Middletown669 East Main StreetMiddletown, NY 10940888.792.3276

PotsdamOne Pioneer DrivePotsdam, NY 13676800.295.8431

Presque Isle26 Rice Street Presque Isle, ME 04769800.831.4640

Riverhead1281 Route 58Riverhead, NY 11901800.890.3028

Sangerfield995 State Route 12Sangerfield, NY 13455800.762.3276

Business Services to Help You Increase Profits

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WELCOME Letter from CEO Bill Lipinski

FARM CREDIT EAST

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Money for your business

Financing to fulfill the dream of country living

Information for profitable businesses

Are you paying more taxes than you should?

Getting it right every time and avoiding penalties

How much are your assets worth?

Using industry standards to track your progress in:• Dairy • Ag Retail • Winery • Green Industry

Get the best return on your business

Add more certainty to your future

Grow, change or expand your business

Management development for today’s young leaders

Protecting your crops against the unknown

LOANS, LEASES & FARMSTART

COUNTRY LIVING LOANS

FINANCIAL RECORD-KEEPING

TAX PLANNING & PREPARATION

PAYROLL SERVICES

CONSULTING SERVICESExpert advice exclusively for agricultural businesses

Business consulting

Estate planning

Financial benchmarking

Grant writing

GenerationNext

APPRAISAL SERVICES

INSURANCE SERVICES

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How can we put our passion to

work for you?

Business Services to Help You Increase Profits

Bill Lipinski, CEO, Farm Credit East

WATCH THE VIDEOLearn more about Farm Credit East from CEO Bill Lipinski at youtube.com/FarmCreditEast

or on our website.

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Sound financial management is critical to growing a profitable

agricultural business. At the close of every year, some Northeast

farmers feel good about what they accomplished over that past

12 months for their businesses, their employees, their families

and for themselves.

While, once again, others are disappointed that they earned

significantly less than they should in spite of their efforts — not

because they didn’t work hard or farm well, but because they

lacked the financial management skills to be successful and

make their businesses more profitable.

As a business owner, proper financial management can help you

control your costs, market your product more effectively and

ultimately capture more profit. At Farm Credit East, our goal

is to help you be a more successful farm business operator by

providing loans and financial management tools that help you

enjoy success and reward for your hard work.

Whether you’re a small family business or a large operation

with diverse markets, we can provide the financial management

support that will help you run your business better and smarter.

We built a company of experts not only in lending, but in tax

planning, accounting, financial software, business benchmark-

ing, estate planning, appraisal, crop insurance, payroll, financial

planning and more.

Making your business thrive does not depend on you to be an

expert in every task. Helping you make your business profitable

and successful for the long haul is our mission at Farm Credit

East, and we’re passionate about it.

Give us a call. We are eager to help!

Bill Lipinski

CEO

Farm Credit East

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For generations, Farm Credit East has worked with

thousands of agricultural business owners across

the Northeast. Our goal is to provide you not only

financing and working capital, but the profes-

sional services you will need to find and service

your markets, manage your business and grow

your profits.

Farm Credit East customer Jason Schwab of Schwab Dairy Farm, Delevan, N.Y.

Farm Credit East

How can Farm Credit East help you increase profits?

WATCH THE VIDEOFor more about Farm Credit

East, see our website at FarmCreditEast.com.

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FARM CREDIT EAST• #1 financial services

cooperative for northeastern agricultural businesses

• Ag customers in seven states: Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York and New Jersey

• Billions in loans to capitalize ag businesses

• Part of the national Farm Credit System, founded in 1916 to promote the growth and prosperity of agriculture

• A leader in helping small, young and beginning farmers get started in agriculture

• Proud sponsors of dozens of agricultural, community and civic activities, including: FFA Star Farmer, New England Green Pastures, Cornell Dairy Fellows, Century Farm Awards and agricultural lead-ership programs throughout the Northeast.

Loans, Leases, Financial and Business Services

A COOPERATIVE VS. A BANKUnlike other lenders who just want your business,

we know your business. Farm Credit East is devoted

specifically to serving the agricultural industry within

the Northeast. We are structured as a borrower-owned

lending cooperative, so when you become our custom-

er you too will have the benefits of ownership, such as

patronage dividends and a vote for candidates running

for the Board of Directors.

Most importantly, we give our customers access to

credit and financial support in every business cycle, up

or down, good seasons and bad. We are staffed with

experts who understand agricultural businesses and

their markets, and who can bring a wealth of support

to your management and accounting team.

A RELATIONSHIP VS. A LOANYour relationship with Farm Credit East will most likely

begin with the assignment of a loan officer, who will

work with you to review the status of your business,

obtain credit where needed and arrange for the services

that you will need to run your business. These include

a vast array of professional services offered at affordable

prices and performed on-farm or in our offices, as you

prefer. For some customers, we provide ongoing servic-

es that help them manage their businesses — process-

ing payroll, taxes and record-keeping, for example. For

others, we simply help to train and support on-farm

staff with software and advice. The solutions for your

business will be matched to your specific needs.

If you grow, breed, process or market agricultural prod-

ucts long-term, Farm Credit East can help you work

toward profitability and success. And the best way for

us to do this is to work with you all year long, and to

help you perform what you’re best at with professional

ag business support wherever you need it. We look

forward to working with you.

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DAIRY

FEED GRAINS & WHEAT

TIMBER & FOREST PRODUCTS

LIVESTOCK, POULTRY & EGGS

FRUIT

MARKETING & PROCESSING

GREENHOUSE

VEGETABLES

NURSERY

FARM SERVICE BUSINESSES

COMMERCIAL FISHING

The industries we serve

The benefits of being a Farm Credit East customer• Capacity and commitment to meet the needs of an evolving agriculture

• Prompt, local decisions and on-farm service from knowledgeable loan officers and financial service experts

• Commitment to supporting all aspects of Northeast agriculture, commercial fishing and forest products

• Competitive interest rates and flexible terms to match your seasonal income or other specific needs

• Exceptional service on the farm, online or over the phone

• Financial cooperative governed by a farmer-elected Board of Directors

• Ownership allowing you to share in our earnings through our patronage dividends program

• Specialized agricultural expertise focused on your specific ag business

• Online banking so you can manage the financial aspects of your business at your convenience

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Farm Credit East

Is Farm Credit East government financed?

No. We are privately funded through the sale of bonds. As one of 90 U.S. financial institu-tions within the national Farm Credit System, Farm Credit East falls under the regulatory oversight of the Farm Credit Administration.

Is Farm Credit East a commercial bank or a credit union?

Unlike commercial banks and other lenders, Farm Credit East is not a depository institu-tion. We are owned by our member-customers. This cooperative structure is your best assurance that competitively-priced credit will always be available to farmers, fishermen and other agricultural businesses.

What is a cooperative?

Cooperatives are structured so that customers are stockholders who are entitled to share in the earnings of the organization. Patronage dividends are a major advantage when you borrow from Farm Credit East. Being a cooperative also means that we are led by a member-elected Board of Directors.

Where does the money come from?

Funds used in lending operations of the Farm Credit System are obtained chiefly from the sale of bonds to the public. Farm Credit East brings billions of dollars from investors to farm families and cooperatives that need credit.

Do you have to be a member to utilize Farm Credit East’s services?

It depends on the services that you wish to use. For credit services, you must buy stock and therefore become a member. We provide financial services for anyone involved in an agricultural business, including owners, managers, employees and part-time farmers as well as agricultural processing and marketing businesses. Agricultural cooperatives borrow from Farm Credit through our affiliated lending institution, CoBank.

What does Farm Credit East do for young and beginning farmers?

We have a number of programs to help support talented, hardworking individuals enter agriculture. Helping young people get started in farming is one of our long-term commit-ments to Northeast agriculture. Programs include our young and beginning farmer incen-tives, FarmStart and GenerationNext.

FREQUENTLY ASKED QUESTIONS

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Loans, Leases, Financial and Business Services

THE MISSION: EXPAND A GROWING MUSHROOM BUSINESS THAT REACHED CAPACITY Incorporated in January of 2013, it took Michael Hallock

and Robert DiPietro, co-owners of Rhode Island Mushroom

Company, only two years to become the Northeast’s largest

exotic mushroom grower. They quickly reached the capacity

of their one greenhouse and needed capital to expand.

“But since we were only a year and a half into our business

we didn’t have the credit history for a traditional loan,”

explained Robert. So they turned to Farm Credit East.

HOW WE HELPEDRhode Island Mushroom Company obtained

financing through FarmStart, a program

that provides working capital to begin-

ning farmers and new cooperatives.

With the FarmStart investment, Rhode

Island Mushroom Company purchased

additional greenhouses. Today they

have tripled production, produc-

ing thousands of pounds

of mushrooms each

week. “Before we were

selling mushrooms

by the box, now

we are selling pal-

lets of mushrooms

wholesale!” said

Michael. “With-

out FarmStart our

growth would have

stalled for at least six

months. They gave us

money when no one

else would.”

We were able to expand our business with the help of FarmStart.”

“

“We already had the sales in place, but needed the capital to grow. Thanks to FarmStart, we were able to obtain the working capital to grow our business.”

A VIEW FROM THE FIELD

Michael Hallock and Robert DiPietro tripled the production of Rhode Island Mushroom Company with the help of a FarmStart invest-ment from Farm Credit East.

Farm Credit East

THE MISSION: IMMEDIATE EXPANSIONThe Crists came to Farm Credit East to expand their business after increasing the volume of

their apple production and missing key sales dates due to breakdowns and other holdups. The

family’s solution was to replace their out-of-date packinghouse with a state-of-the art facility

that would make them more competitive and efficient. Knowing that swings in agricultural

markets would make financing hard to obtain from a commercial lender, they turned to Farm

Credit East.

HOW WE HELPEDFarm Credit East was

instrumental in funding

an expansion that better

prepared them to profit

from key agricultural

cycles. Their Farm Credit

East loan officer’s

understanding of the

Crists’ business and

industry needs helped

shepherd the loan

through to meet their

specific needs.

When Crist Bros. Orchards in Walden, N.Y., wanted to expand their business, they turned to Farm Credit East. Here is Jennifer, Jeff and Joy Crist in their state-of-the-art packing facility.

Farm Credit East is a true partner.”

“ “Farm Credit East is a true partner and ahead of the curve as a lender. Their representatives are facilita-tors, not road blockers. Credit availability tied to competitive interest rates, crop insurance and regular patronage refunds have positively impacted our business. We could not have carried out many of our projects with any other lender.” – Jeff Crist

A VIEW FROM THE FIELD

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Loans, Leases, Financial and Business Services

One of the biggest challenges in running and growing an

ag business is having reliable, ready access to money when

you need it. Providing this is why the Farm Credit System

exists, and why Farm Credit East is one of the most impor-

tant partners you can have for growing your business.

Farm Credit East’s operating, real estate, country living and

specialty loans offer advantages not found elsewhere. If a

lease fits your needs, Farm Credit East offers equipment,

buildings and vehicle leases with terms and options you’ll

find hard to beat!

Our lending caters specifically to ag-business needs.

WATCH THE VIDEOLearn more about Farm Credit

East relationship lending at youtube.com/FarmCreditEast

or on our website.

Farm Credit East customerGeorge Lucas of Lucas Greenhousein Monroeville, N.J.

Loans and Leases

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WE’RE ALL ABOUT AG BUSINESS Financing and supporting agriculture isn’t just something we do — it’s all we do. Farm Credit

East is staffed with a broad range of professionals who understand the many aspects of ag

business management. Our loan officers come to you with a working knowledge of how

business works in your agricultural industry.

In addition to farmers, fishermen, forest products producers and farm services businesses, we

also finance rural residence owners. Everything we do contributes to the success of agriculture

and the fulfillment of country living.

ALL TYPES OF CREDITThere is virtually no kind of loan, line of credit or lease you will encounter for your business

that can’t be obtained at Farm Credit East at a competitive rate and with flexible terms that

will work for your particular needs.

And there are other benefits of working within the Farm Credit System, including our

structure as a customer-owned financial cooperative. When you obtain credit from Farm

Credit East, you become both a customer and an owner, and share in our financial success

through patronage dividends based on a percentage of our earnings.

FARM CREDIT EAST LENDS FOR BUSINESS AND PERSONAL PURPOSES, INCLUDING: • Farm and forest land

• Building production and marketing, including barns, shops, greenhouses and retail facilities

• Improvements to land, including environmental compliance and waste management

• Value-added and further processing, including packing houses and processing plants

• Farm residences and labor housing for hired workers

• Machinery used in production, further processing and marketing

• Vehicles for over-the-road and on-farm use

• Commercial fishing boats and dockside facilities

• Livestock and poultry

• Inventory, including advance purchase of inputs, nursery stock and feed

• Operating expenses for ongoing costs, such as operating inputs, producing, processing and

marketing crops and other products

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THE BENEFITS OF BORROWING FROM FARM CREDIT EAST• Competitive rates. Fixed, variable or a combination of both.

• Expert, on-farm service. You will work with a relationship lender who knows the ins and outs of agricultural businesses and will make a point to thoroughly understand your operation and its credit needs. This includes careful fulfillment of special needs, such as timely delivery of checks during construction or complex transac-tions involving side businesses with multiple owners.

• Flexible terms. We tailor our loan and repayment plans to provide a variety of interest rate programs, depend-ing on the loan’s purpose, repayment terms and the flexibility you need.

• Reliable credit. We offer revolving and non-revolving lines of credit to fit your business needs. And we pride ourselves on being a consistent source of credit in good times and bad.

• Loan, lease analysis. Your loan officer will help you analyze the pros and cons in your decision between choos-ing a loan or a lease.

• Ag equipment financing at equipment dealers through AgDirect® offers attractive rates and the most ag friendly terms in the business to serve all of your ag equipment financing needs, including options to buy, lease or refinance.

• Commitment to agriculture. As owners of Farm Credit East, borrowers share in the financial success of their financial cooperative. We have a track record of returning a percentage of earnings as a patronage dividend.

MEMBERS SHARE IN OUR EARNINGSBecause of our strong financial position and because we are a cooperative, Farm Credit East annually returns value to our customers through our patron-age program. Customer-owners of Farm Credit East (including our predecessor associations) have earned millions in dividends from ownership in their cooperative.

OTHER PROGRAMS • Young, Beginning, Small and Veteran Farmer Program:

The demands for capital and financial management

make starting a new agricultural business difficult.

That’s why we offer special incentives and financial

services to young, beginning, small and veteran farmers

with a solid business plan, likely potential for success

and a willingness to work hard.

• FarmStart: FarmStart invests up to $75,000 in working

capital to help startup farmers establish a positive

business and credit history during the early phases of

their careers.

• Other: Farm Credit East is committed to helping people

enter agriculture. As an FSA preferred lender, we can

help you prepare and submit an application to the Farm

Services Agency for a guaranteed loan if your financial

picture is not all that it could be. You’ll need to meet

FSA conditions to be approved for a loan.

Loans and Leases

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Who is eligible to borrow from Farm Credit East?

We lend to farmers, fishermen, forest products producers and farm services businesses.

Business owners, managers, employees and part-time farms are also eligible borrowers,

as are basic agricultural processing and marketing businesses. Farmers’ cooperatives can

borrow from Farm Credit through CoBank. We also finance part-time farmers and rural

residence owners through our Country Living program.

What are the terms?

• Short-term loans have terms of 1-to-10 years available to fund operating expenses

or capital assets, with fixed- and variable-rate options, flexible repayment terms

matched to cash flow, and letters of credit.

• Long-term loans have terms of 10-to-30 years, fixed- and variable-rate options, and

flexible repayment terms matched to your cash flow.

What does it mean for the Farm Service Agency to guarantee the loan?

The Farm Service Agency (FSA) of the U.S. Department of Agriculture may guaran-

tee loans through Farm Credit East to help family farmers who might not otherwise

qualify for credit for farm ownership, improvement and operating purposes. Farm

Credit East is committed to helping people enter agriculture, and will help you prepare

and submit an application if your financial picture is not all that it could be. You must

meet Farm Service Agency conditions to be approved for a loan guarantee.

What are your rates?

Farm Credit East offers competitive rates. And, as an owner of the cooperative, you are

eligible to participate in our patronage dividend program. For specific rates, check with

your branch office.

FREQUENTLY ASKED QUESTIONS

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Loans and Leases

What is my loan term?

It depends on your situation. Some members have a revolving line of credit, which

basically means they have a loan with us with no specified expiration. You and your

loan officer will agree to your loan terms.

How often are my payments due?

We understand that your cash flow may vary. This is why we offer flexible payment

schedules to fit the needs of your business.

Does Farm Credit East finance young and beginning farmers?

Helping young people get started in farming is one of our long-term commitments to

Northeast agriculture. Farm Credit East provides special programs for young and begin-

ning farmers, including, but not limited to, our FarmStart program. Each situation is

different. We work with individuals to find the best program for their needs.

FREQUENTLY ASKED QUESTIONS

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WHERE WILL THE MONEY FOR GROWTH COME FROM?The Lucas Greenhouse began in the fall of 1978, when

George and Louise Lucas purchased four acres of land

from her father and constructed a two-gutter connected

30-foot x 150-foot greenhouse. The business has since

grown to include 770,000 square feet of heated green-

house space and 30 acres of outdoor production, plus

a garden center and one food chain. As they continued

to expand to increase efficiency and respond to market

needs, access to capital in a reliable, responsive way be-

came essential.

HOW WE HELPEDAs a proud lender to the greenhouse industry, Farm

Credit East understands your business, its cycles and the

long-term commitment you need. We do not shy away

from lending capital for expansion to a seasonal business

like other lenders might. We built a relationship with the

Lucas family that hopefully will continue for years.

“When George needs new construction, he just orders

the glass and contracts for the work,” said Justin Dickey,

George’s loan officer. “He knows Farm Credit East will

get behind him fast, so he never worries about where the

financing will come from or whether he’ll get each check

right when he needs it. He knows we’ll get it done.”

Farm Credit East keeps the process simple.”

“

George Lucas, owner of Lucas Greenhouse in Monroeville, N.J. When George and Louise Lucas need to grow their business,

they need a lender that knows them well enough to be responsive. They partner with Farm Credit East.

“When I had to put five acres under cover in three months, I used a lender who always comes through for me. Farm Credit East already knows my business and I can count on them to keep the process simple.” – George Lucas

A VIEW FROM THE FIELD

Country Living Loans

Lending for Country Living.It’s what we do.

See our website at CountryLivingLoans.com.

A home in the country. A part-time farm. That

little piece of land that takes you away from it

all. Whatever your dream, Country Living from

Farm Credit East can turn it into reality.

This program is designed to meet the needs of

country home and rural property owners. And

if you already own a country home, we offer

excellent refinancing options, too.

Dwight Campbell, Spencerport, N.Y.

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Rural Property Loans At Country Living, we understand the unique requirements associated with country homes, part-time farms and other rural properties. We can help you with:

Purchase – You’ve found it. The perfect piece of land. Set in the woods or in an open field, where you can build your home, work your farm or just get away from it all. Now that perfect country property needs the perfect piece of financing. At Country Living from Farm Credit East, rural properties are our specialty. We don’t shy away from the special financing needs of buying land, homes and farms in the country.

Refinance – You may already have your dream home in the country, but is your mortgage allowing you to get the most out of your property? By refinancing with Country Living from Farm Credit East, you may be able to lower your monthly payments, get better terms or access funds by putting the equity in your country property to work for you.

Construction – Building a new home in the country can be a dream come true, but it can also be tough to find the right financing. Not every lender is qualified or prepared to consider con-struction on rural land, where many special considerations can apply. The mortgage special-ists at Country Living will walk you through the construction process and help you develop the best financing plan possible. Our program will take you from construction to permanent financing with one convenient loan package and just one closing.

CountryHome LoansOur rural home loans were created specifically to fund homes in the country, where your property may not fit the mold for conventional bank loans. We have the flexibility and exper-tise to finance additional land, farm structures, construction and farm/home financing.

CountryFarm LoansWe understand that no two farms are alike, and farms are different than other businesses! At Country Living, our farm financing options help you put your unique farm assets to work for you. Funding multiple parcels or nonconforming properties with unique characteristics is not a challenge for us.

CountryLand LoansBecause we are farm financing specialists, our CountryLand loans were expressly designed for the bare land properties that other lenders often avoid. Whether you intend to use your land now or in the future; whether you’ll be farming it or leasing it to others; whether it’s a home lot or expansion room for your business, Country Living can offer you a highly flexible, com-petitively priced land loan.

CountryFlex Equity LoansCountryFlex Equity loans provide access to the equity in your farm property. Much like tradi-tional home equity loans, these loans are revolving lines of credit that give you the flexibility to borrow what you need, when you need it – and the ability to pay it back with the same flexibility and ease.

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Country Living LoansFREQUENTLY ASKED QUESTIONS

What are the terms?

• Fixed rates. 15-, 20-, 25- or 30-year terms with no prepayment penalties.

• Additional savings. Choose a term of 10 to 30 years — and our closing requirements and costs are generally more flexible than those of other lenders.

• We work with the property as it is. It is not a problem if there is extra land, outbuild-ings or even livestock such as horses or cows.

• We service all our own loans. This means no automated voices when you give us a call.

Can I pay off the loan early?

Yes. There is no prepayment penalty.

What about an appraisal?

Appraisals can be done through Farm Credit East or through an outside appraisal compa-ny, depending on your property. Farm Credit East appraisers are familiar with the unique situations often associated with rural properties.

Will you let me know if I qualify for a loan before I apply?

Yes. However, a prequalification form is not a binding commitment. It simply provides an estimate of your borrowing power so you can shop for your dream property with greater confidence. It’s that easy.

How do I apply?

Our mortgage specialists will help make the application process easier than you may expect. For more information, contact us today at 800.327.6588 or online at CountryLivingLoans.com.

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HOW CAN YOU FIND FINANCING FOR VACANT LAND?Dwight Campbell wanted to purchase a farm with enough

acreage to build a home and raise his horses. He found an

80-acre property that would perfectly suit his needs, complete

with a 70-foot waterfall. Luckily for Dwight, the auctioneer

who was selling the property recommended he look into Farm

Credit East’s Country Living loans.

“Most banks have problems financing vacant land, active farms

and home construction,” said Mike Johel, Dwight Campbell’s

Country Living loan officer. “But this is not a problem for

Country Living.”

A VIEW FROM THE FIELD“The Country Living program looks at the value of raw land. It impressed me that both the appraiser and my loan officer came out to walk the entire 80 acres with me. They are so easy to work with, and they love land.” – Dwight Campbell

Dwight Campbell, of Spencerport, N.Y. “When I called Country Living for the first time, I asked, “How much

land will you finance?” Mike’s answer was, “How much do you have? Land is what we do.”

Country Living understands the value of rural properties.”

“

HOW WE HELPEDCountry Living offered a way for Dwight to finance

his property and future construction, with the help of

experts who appraise large acreage properties. “A loan

from Country Living wasn’t Dwight’s only choice,”

said Mike. “But it was a good choice for him because

of the products, terms, rates and relationship that we

could offer him.”

Our appraisal team offers expert service, appraisers

with comprehensive and up-to-date rural appraisal

training, the largest database of agricultural property

transfers and a consistent follow-through. “If you’re

looking for life in the country, that is us,” Mike said.

“We can finance acreages and active farms. It’s what

we do best.”

We keep an eye on your bottom line.

WATCH THE VIDEOLearn more about Farm Credit East financial record-keeping services

at youtube.com/FarmCreditEast or on our website.

Farm Credit East senior loan officerJustin Dickey

Financial Record-Keeping

As an ag business owner, your financial

condition and profitability depends on

solid records, timely reports and sound

advice. At Farm Credit East, we provide

comprehensive financial record-keeping

services from accounting professionals

trained in ag-related rules and regulations.

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A VARIETY OF RECORD-KEEPING OPTIONSOur financial specialists will work with you to identify

your accounting and record-keeping needs and then cre-

ate a program for your business. We tailor our services to

fit the way you do business, whether at your operation or

from our office. Options include:

• Mail-in service. You provide us with your basic income

and expense information (check, deposit and payroll

data). We will prepare and return management, tax and

financial reports.

• On-farm accounting. The ideal solution if you need

an on-site bookkeeper without the full-time expense.

Our specialists will enter your income and expense

data, develop custom management and tax reports, and

provide a regular analysis.

• CenterPoint® Accounting Software. An application

from Red Wing that handles complete financial report-

ing for just about every accounting need from check

writing, check reconciliation, basic payroll, balance

sheets and management reports to printing invoices

and handling basic payables and receivables.

• Software support. Regardless of the record-keeping

software you select, we can work with you to ensure

your records are accurate and up-to-date.

Depending on the size and nature of your business, we

can customize services to meet your requirements.

SCHEDULE A FREE REVIEWIt is important to the health of your business to know

how well you are complying with ag-related rules and

regulations. Call one of our records specialists today to

learn how we do our job, so you can do yours — a job we

value, because we are you.

TYPES OF FINANCIAL REPORTS AVAILABLE THROUGH FARM CREDIT EAST• Profit & loss statements

• Balance sheets

• Monthly reports on cash flow, cash summary, payroll, debt status, investments and savings

• Tax planning and cash flow worksheets

• Capital assets

• Selling of assets

• Year-end reports for tax preparation including W-2 forms

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What are my responsibilities as a customer?

If you contract with us for record-keeping services, you’ll be required to pass accurate

information and receipts to us on a regular basis. We will then provide professional

record-keeping and reporting for your taxes and assist you with business planning.

How will record-keeping help me financially?

The reports that Farm Credit East provides will give you an accurate financial picture

of your business and better information for your decision-making. Plus timely,

well-prepared records aid effective tax planning, which can help to minimize your tax

burden. A better record-keeping system is a major step toward improved profitability.

Will you work with my current bookkeeper?

We are willing to do on-farm visits to review your financial records with your book-

keeper who may be busy with the day-to-day tasks of paying bills and recording en-

tries. Farm Credit East can review the bigger picture and provide additional support.

What is the cost?

We charge by the number of hours needed and the complexity of your operation. Our

records specialist can give you an estimate after discussing your current records and

your record-keeping needs with you. Most often, we quote an annual fee for this ser-

vice. If you are not happy with our service, we have a satisfaction guarantee.

Financial Record-KeepingFREQUENTLY ASKED QUESTIONS

22

A SEAMLESS TRANSITIONThe Kurtz family operates Kurtz Farms, a successful wholesale greenhouse business located in

Cheshire, Conn. When their accountant moved to Florida a few years back, they were in need

of someone to take over their records, but didn’t want the burden of bringing an accountant

up to speed on the intricacies of their agricultural business, so they called Farm Credit East.

HOW WE HELPEDEarl has been pleased with the relationship he’s formed with Farm Credit East. “It’s been great

to work with folks who understand what a farm is all about and how accounting principles

apply to agricultural products,” he said. “I can ask questions and they can provide informed

recommendations.” As Earl looks towards the future, he foresees working with Farm Credit

East to evolve the business. “Through our records relationship, Farm Credit may identify a

need or an opportunity for improvement in our business and as we move forward we’ll work

with them to get it done.”

Earl Kurtz, of Kurtz Farms LLC in Cheshire, Conn., turned to Farm Credit East to ensure his records stayed accurate and up-to-date.

At Farm Credit East, they understand how accounting principles apply to agricultural products and are able to answer my questions.

“ “

A VIEW FROM THE FIELD

23

Don’t pay more taxes than you should.

WATCH THE VIDEOLearn more about Farm

Credit East tax services at youtube.com/FarmCreditEast

or on our website.

Farm Credit East customerRon Robbins of North Harbor Dairyin Sackets Harbor, N.Y.

Tax Planning and Preparation

24

Tax Planning

Long-term planning with a tax specialist knowledgeable

in your specific ag business can mean significant savings

when it comes time to file your returns. The tax experts

at Farm Credit East are up to date with the tax laws affect-

ing businesses like yours. Our specialists can address vir-

tually all your business concerns and are available to you

throughout the year to analyze and discuss year-to-date

activities, tax saving strategies and the tax consequences

of every business decision. They will work with you to

ensure you are not paying more than you should and to

help forecast your end-of-year tax liabilities.

GET ALL THE DEDUCTIONS YOU’RE ALLOWEDThere are several ways to realize all the deductions you

are entitled to, including:

• Business organization. For example, operating as a

partnership may offer more tax savings than operating

as a sole proprietor.

• Family tax planning. Hiring family members to work

in the business could reduce family tax liability.

• Fringe benefits. Setting up retirement plans, medical

plans and other fringe benefits could mean attractive

tax deductions for many businesses.

SCHEDULE A TAX REVIEWA Farm Credit East tax specialist will discuss with you

all the circumstances surrounding your business — and

your life — which could have an effect on your business’

tax situation. Topics, such as income, expenses, major

purchases, investments, depreciation … even marriage or

retirement. Our advisors are experts in ag tax laws and

will work with you to plan for the most beneficial tax

arrangement for your business.

EVENTS AND ACTIVITIES AFFECTING YOUR TAX SITUATION• Marriage, retirement,

purchasing a home, etc.

• Starting a new business

• Income and expense analysis and projections

• Major purchases, sales and investments, leases

• Depreciations

• Selling of assets

• Organizing farm records

• Capital expenditures

25

Tax Planning and PreparationTax Preparation

As experts in agricultural taxes including local, state and

federal laws, a Farm Credit East tax specialist can take a

look at your situation and provide you with specific ad-

vice that will help you capture every deduction that the

law allows. Agricultural businesses are subject to a variety

of tax laws, deductions and requirements that may not be

familiar to non-specialized advisors and tax preparers.

FREQUENTLY OVERLOOKED TAX PROVISIONSTax preparers unfamiliar with ag tax laws often overlook

deductions and other benefits to which ag business own-

ers are legally entitled. Here are six benefits often mis-

handled by nonfarm tax preparers:

1. Depreciation. Has the optimum amount been taken?

2. Prepaid farm expenses, such as feed and supplies.

3. Special credits, such as targeted job credit, rehabili-

tation credit, earned income credit and investment

credit.

4. Tax benefits that cannot be taken in one year, but can

be carried over to another year (investment credit, net

operating loss).

5. The sale of assets on Schedule F. Many preparers report

these sales, which forces farmers to unnecessarily pay

self-employment tax on the income.

6. The tax considerations of various business structures

(partnerships, S-corporations, C-corporations).

Using a Farm Credit East tax specialist ensures that you’ll

receive your correct deductions and allowances while

avoiding penalties for failing to meet any special require-

ments. Call one of our tax specialists today to learn how

we do our job, so you can do yours — a job we value,

because we are you.

TYPES OF TAX RETURNS PREPARED BY FARM CREDIT EAST• Individual returns

• Sole proprietor with schedule F or C

• Partnership

• S-corporation and C-corporation

• Fiduciary (for estates and trusts)

• Part-time farmers and fishermen

• Payroll tax reporting

• Sales tax reporting

• Gift taxes

• Amended returns

• Sales and gasoline tax refunds

• Retirement plan reporting

26

When should I call Farm Credit East?

We suggest you consult with a Farm Credit tax planner well in advance of filing your

tax return. It’s also a good idea to talk to us when you’re considering a change in

your business.

Are my records confidential?

You can be assured that the financial information you give to your Farm Credit East tax

specialist is strictly confidential. If you borrow from us, you decide whether your loan

officer may see your tax records.

What is the cost?

We charge by the number of hours needed for tax planning. The cost of our service is

dependent on the complexity of your operation. Your tax specialist can give you an

estimate after discussing your tax planning needs with you. If you are not happy with our

service, we have a satisfaction guarantee.

What are my responsibilities as a customer?

You are responsible to work with Farm Credit East to ensure that your tax deadlines are

met. This means holding regular conversations with your tax specialist and regularly

updating your records. Also, you will need to make up-to-date records available to your

tax specialist to accurately plan for your future. We can help with your record-keeping

needs as well.

FREQUENTLY ASKED QUESTIONS Tax Planning

27

Tax Planning and Preparation

Am I eligible for Farm Credit East tax preparation services?

You do not need to borrow from us for us to prepare your taxes. You are eligible if you

are an individual or enterprise involved in agriculture, fishing and aquaculture, as well as

timber, nursery, greenhouse, vineyard and similar operations. Managers, employees and

part-time farmers may also use Farm Credit East tax preparation services.

What are my responsibilities as a customer?

You are responsible to help us meet the tax deadlines. This means holding regular

conversations with your tax accountant and regularly updating your records. Also, you

are responsible for having accurate records so that at tax time we have all the correct

information needed to properly file your returns.

What happens if I get audited?

Farm Credit East is willing to represent you in an audit. We will prepare the reports and

help you navigate through the process.

What happens if a mistake is made?

We will work with you to correct the mistake. If it is our mistake, we will pay any

penalties that may occur. If it is due to misinformation, we will work to correct the issue

with you for the future and minimize the current penalties.

What is the cost?

We charge by the number of hours needed to file your tax return. The cost of our service

is dependent on the complexity of your operation. Your Farm Credit East tax specialist

can give you an estimate after discussing your tax return with you. If you are not happy

with our service, we have a satisfaction guarantee. You tell us what the service was worth

to you and pay that price.

FREQUENTLY ASKED QUESTIONS Tax Preparation

28

HOW WE HELPEDRon was shocked at how easy it was to work with his local

Farm Credit East tax preparer, Mark Kellogg. Ron came to us

for the tax preparation service, but left with much more. He

gained an accurate and timely tax return and a team of finan-

cial experts. Now he doesn’t have to explain to his loan officer

what his accountant did or what his tax planner said. Instead,

at Farm Credit East, he works with knowledgeable experts in

all aspects of business financial services.

Farm Credit East helps us make the best decisions for our business.”

“

“Mark’s understanding of our businesses as well as current tax laws has been advantageous to our operation. It was easy to switch to Farm Credit East to prepare our taxes and get help with tax planning. Mark knows current tax laws so we rely on his advice for the tax implications of business options that we may be considering, which helps us make the best decisions for our business.”– Ron Robbins

Ron and Nancy Robbins on North Harbor Dairy in Sackets Harbor, N.Y. They rely on Farm Credit East for timely tax planning and preparation as well as for the tax implications behind various business decisions.

A VIEW FROM THE FIELDA SMOOTH TRANSITIONRon and Nancy Robbins own an 800-cow dairy farm, 6,000-acre crop operation and busy

agritourism business called Old McDonald’s Farm in Sackets Harbor, N.Y. Already busy

operating these diverse businesses, the Robbins hired a tax preparer to file their taxes. But

the preparer was not timely. The Robbins’ wanted to change, but they were concerned about

the time needed to build a new relationship. They turned to Farm Credit East, where they

already were a borrower.

29

Assuring a hassle-free, trouble-free payroll.

WATCH THE VIDEOLearn more about Farm Credit

East payroll services at youtube.com/FarmCreditEast

or on our website.

Farm Credit East customerDarla Schwab of Schwab Dairy Farm,Delevan, N.Y.

Payroll Services

No business is too small or large to benefit from

professional support for their payroll services.

Whether you have five employees or 50, seasonal

or year-round, ag-specific payroll services from

Farm Credit East can help you achieve trouble-free

payroll periods and eliminate the hassle and tech-

nicalities of payroll processing. Our specialists stay

up-to-date on farm payroll regulations and filing

deadlines, and can keep your payroll timely and

accurate, allowing you to focus on the job you

love, a job we value, because we are you.

30

Service options range from complete payroll processing

to professional support for you and your staff, including:

• Payroll management. You simply mail, email or fax

to us, and we’ll complete all payroll record-keeping

functions, tax calculations and deductions, paycheck

writing, printing of quarterly reports and payroll

summaries and processing of IRS W-2, W-3, 940, 941

and 943 forms and state forms.

• Weekly, biweekly or semiweekly

payroll processing

• Monthly or quarterly payroll tax filing

• Year-end tax filing (including W-2 preparation)

• Seasonal or year-round payroll processing

• Direct deposit options

• Payroll time clock options

• H-2A reporting

• On-farm software support

• Agricultural software from Red Wing

handles basic payroll.

• Software support is available.

• Payroll software

• Can submit your basic payroll online

• Customizable solutions to fit your needs

Complete processing, filing and record-keeping. We

complete all payroll record-keeping functions, tax calcu-

lations and deductions, paycheck writing and/or direct

deposit, processing of quarterly reports and payroll sum-

maries. We will process IRS forms W2/W3, 940, 941/944

and 943, as well as all state forms.

A coordinated approach. Our experienced payroll and

software specialists are part of a team of agricultural

finance experts who understand the special accounting,

tax, record-keeping and payroll considerations of rural

and family-owned businesses. We are up to date on all

current farm payroll rules, requirements and filing dead-

lines, and can help you to develop a more coordinated

and informed approach for managing your business.

FLEXIBLE, AG-SPECIFIC PAYROLL PROGRAMSWe specialize in processing

payroll for all types of farm-

ing, fishing, green and forest

products businesses. So we

are experts in the complica-

tions of various types of

exemptions, record-keeping

and filing requirements that

agricultural and ag-related

businesses may have. We can

provide:

• Payroll for H-2A, seasonal and part-time employees

• Overtime pay processing

• Unemployment tax processing

• Multi-state tax prep and reports that conform to all state-specific regulations

• Local income tax filings

• Child support deductions via check or electronic transfers

31

I am concerned about switching my payroll provider mid-year. Will this cause confusion for my employees or require too much of my time during my busy season?

Change does not always come at a convenient time. The main benefit of switching is

to have your payroll in good hands as soon as possible before anything falls through

the cracks — such as labor hours, which are at peak during your busy season. With your

permission, we can contact your current provider for year-to-date data. In addition, we

provide services right at your place of business, which makes the transition easier for you

and requires less of your time.

What if I prepare our payroll myself or use another processing service? Why would I want to switch to your service?

It’s important to evaluate how well you (or your processing service) keep up with agricul-

tural payroll rules and regulations. To find out, one of our ag payroll experts can review

your needs and existing services and make a recommendation. We find that many of

our customers prefer to focus on the day-to-day operations of running their agricultural

businesses. Others are frustrated trying to keep up with ever-changing payroll rules,

regulations and forms as well as demanding deadlines. Assuring trouble-free payroll while

moving this responsibility off your plate may best be accomplished using payroll special-

ists who work exclusively with agricultural businesses, as ours do.

Another advantage: Our coordinated team of farm business experts can help to make the

preparation of your financial records, income taxes and payroll more efficient.

Do payroll specialists receive extra payroll-related training?

At Farm Credit East, all payroll specialists take courses on agricultural payroll and must

pass a test before they can provide this service to customers.

Is my business too small to use Farm Credit East’s payroll service?

No business is too small. At Farm Credit East, we are committed to the success of all farms

regardless of size. And we prepare payrolls for businesses of all sizes. Some operations

have more than 100 employees while others have just one.

Payroll ServicesFREQUENTLY ASKED QUESTIONS

32

Do I save money by having you process my payroll biweekly or weekly?

Yes, you do. We have a per-pay-period base charge and a per-check (transaction) charge.

With a biweekly pay period, you have half the number of checks and pay periods. Certain

state labor laws require waiver approval for paying other than weekly. We are happy to

assist you with this process if you do not have the required approval.

Please note: H-2A labor may have weekly filing requirements, which we would confirm

with your applicable liaison/state agency. Quarterly and annual filings remain the same.

Can you help with worker’s compensation audits?

We provide the reports needed for worker’s compensation audits. We can also customize

your payroll setup and reports to match your audit classifications, which can help make

your audit process fast and accurate.

What is the turnaround from the time that I submit my payroll information to you?

We assign a processing day for you based on your needs and process your payroll the

same day that we receive your information. We send your payroll package, including

paychecks, to you or, if you prefer, you can pick up your employee paychecks at your

local Farm Credit East office. Please note: Direct deposit of employee pay does require an

additional business day.

Do all my employees have to have direct deposit?

Not at all. Your employees can choose to receive their pay through direct deposit or by

check, within the same payroll. In fact, your employees can have multiple direct deposit

accounts (up to three) or check and direct deposit to savings.

FREQUENTLY ASKED QUESTIONS

33

Will you print employee checks?

We customize our payroll service according to what each customer would like and

what’s best for each business. For example, we can print checks, make direct deposits

and automatically debit your bank account for all payroll taxes. Or, if you prefer, we will

print payroll stubs for you, and you can write the checks.

Will you process/pay liabilities?

Absolutely. We comply with electronic tax payment requirements for the IRS as well as

your state(s). And if you prefer to remit your payment by check, we will print liability

checks for any requirements that do not need electronic payment. We also assist with

payroll deduction payments, such as retirement plan payments, employee tax levies, etc.

What are my responsibilities as a Farm Credit East payroll customer?

You submit your payroll data in the method that works best for you, such as calling,

faxing or emailing the information to your Farm Credit East office. You also submit

required payroll information for each new employee along with wage or deduction

changes. Good communication with your personal payroll specialist creates a smooth,

timely process.

Who do I talk to if my payroll specialist is out sick or on vacation?

We keep specific instructions for each and every customer with their records just for

such occasions so another payroll specialist will be ready to help. In fact, we have back-

up for every Farm Credit East payroll specialist with established protocols for ensuring

that all client payrolls are delivered on time, whether it’s a hot, hazy Friday afternoon in

July or the day before Christmas.

Payroll ServicesFREQUENTLY ASKED QUESTIONS

34

WHO NEEDS ANOTHER JOB?Jason Schwab and his mother, Darla Schwab, were busy enough

milking 800 cows, raising 700 heifers, farming 2,000 acres and

building a new gravel business as a side enterprise. Payroll

processing was the last thing they needed to handle. As own-

ers and managers of Schwab Dairy Farm in Delevan, N.Y., they

needed to stay focused on three milkings a day and producing a

26,000-pound herd average.

“I used to prepare our payroll when we had three employees and

three partners,” said Darla. “And, even then, I found that keep-

ing up with ever-changing rules, regulations and forms was more

than challenging.”

HOW WE HELPEDThe Schwabs now fax a summary of hours every pay period to

their Farm Credit East office and receive their hourly employees’

payroll checks the following day. “The checks are never late,”

Jason notes. “Farm Credit East also prepares all our payroll reports

for us. And if we are ever audited, we wouldn’t need to deal with

it, because they would take care of it for us.”

SPINOFF BENEFITSAlong with payroll, Farm Credit East manages deductions for a

new retirement plan, providing a check for the plan manager and

a spreadsheet for tracking employee-specific contributions. Also,

we can now provide labor expense summaries and other reports

as needed.

“Recently, we asked Farm Credit to provide a summary of our

labor expenses for each area of our businesses, such as for crops,

shop, dairy and maintenance. It is nice to be able to make one

phone call and get a special report like this the following day.”

“

“Just the efficiencies and the payroll paperwork that Farm Credit East takes care of for us make our lives easier.” – Darla Schwab

Darla and Jason Schwab, owners of Schwab Dairy Farm in Delevan, N.Y., turned to Farm Credit East to avoid risking penalties while processing their own payroll.

We could have been hit with a huge penalty if we made a mistake or were just a day or two late submitting our payroll tax.”

A VIEW FROM THE FIELD

35

Consulting for Business Success

Business as usual is no longer an option.

WATCH THE VIDEOLearn more about Farm Credit

East consulting services at youtube.com/FarmCreditEast

or on our website.

As the saying goes, if you fail to plan, you plan to fail. In recent years, some farm businesses

have struggled to adapt to market headwinds, while others have enjoyed record profits. The

difference between the two lies in the ability to proactively adapt to the “new normal.” In

short, an effective manager’s primary tool is their ability to continually adjust their business.

A Farm Credit East consultant can help you get the best return on your business.

Our consultants have sat across the kitchen table from thousands of farm families, working

to resolve a variety of their concerns, from estate planning and business transfers to human

resource management issues. We can help you decide whether to undertake a new venture,

relocate, set up or dissolve a business. Most importantly, we can help you plan your estate to

best meet your family’s needs and minimize settlement costs. When you’re in agriculture for

keeps, it’s good to know a consultant who is too.

CONSULTING BASED ON HOW YOU WORKOur consultants develop unique working relationships with each client based on your busi-

ness objectives and how you like to work on any specific aspect of business management.

Below are some common consulting formats:

• Project basis: Very often, our consultants work on individual projects, such as developing an

estate plan with a client.

• Ongoing consulting: Many clients prefer a continuing relationship with their consultant. In

most cases, your consultant visits your operation every quarter to discuss your financial pic-

ture, with telephone contacts in between. Other clients choose monthly or year-end visits.

• Group consulting: A Farm Credit East consultant can conduct training right at your place

of business. They can customize a program for your family, employees or customers on

virtually any topic, such as business management, labor relations, communication skills or

problem-solving.

36

IMPROVING PROFITABILITYSome farm businesses enjoy record profits while others in the same industry struggle and fall

behind. The difference maker is aggressive managers who use business tools to effectively

adjust their business model to manage risk and improve profitability.

A Farm Credit East business consultant will help improve your profitability by working closely

with you to analyze your business from many angles and pinpoint methods for improving

your bottom line, including the following:

• Business planning

Are you evaluating the feasibility of an expansion, diversification or other addition to your

current operation? Perhaps you are starting a new business and would like a business con-

sultant to walk you through a business plan or evaluate what you have already projected.

Your consultant will look at your farm’s financials over a four- or five-year period so that to-

gether you can assess the business’s trends and use that information to build a usable plan.

Your consultant will help you put a monitoring system in place so you have practical advice

to help make decisions about the direction of the business.

• Estate and retirement planning

Our consultants help you navigate issues related to family gifting and retirement planning

through a consensus-building process with your family. Timely estate planning can also

help you improve your tax liability dramatically. Developing a plan now will ensure that

your business and personal assets remain within the family.

• Family business transition consulting

When transferring the family farm from one generation to the next, family members must

deal with a maze of business matters, tax implications and emotional issues. Farm Credit

East has provided consulting services for many generations of farm business transfers.

• Business continuity consulting

Business continuity is critically important when you transfer your farm business to another

generation. There are various ways to organize your business, from a sole proprietorship to

a corporation; our consultants know how to clarify these options for farmers and their at-

torneys.

• Profit Analyzer

Your Farm Credit East consultant will work with you to monitor the progress of your actual

business results against budgeted, planned business metrics and also help you to define ways to

enhance your business profitability.

37

Estate Planning

Creating certainty for your family.

WATCH THE VIDEOLearn more about Farm Credit

East consulting services at youtube.com/FarmCreditEast

or on our website.

No one knows what tomorrow will bring.

But if you delay planning for it, you could

leave your family with confusion and con-

flicts rather than the proud legacy you’ve

worked so hard to achieve.

Farm Credit East business consultants

have helped thousands of Northeast farm

families achieve their estate planning

goals and add more certainty about their

future in the process.

Farm Credit East customers Keith and Monika Mann, of Mann Farms, Inc. and Orcranics, LLC in Buzzards Bay, Mass.

WHY ESTATE PLANNING IS IMPORTANTPlanning well in advance for the future of your estate accomplishes many objectives,

including the following:

• Ensures that your assets will be used to benefit the people you choose

• Protects your family from difficult, costly or even heartbreaking outcomes

• Can ensure a comfortable retirement for you and your spouse

• Lays the groundwork for the next generation to take the reins

• Provides certainty for your farm and, more importantly, for your family

DEMYSTIFYING THE PROCESSPlanning for the future doesn’t have to be complicated or intimidating. Our business consul-

tants break the process down into manageable pieces. Some families start the process think-

ing that it will be overwhelming, but by working closely with a Farm Credit consultant, your

family can build a plan that will provide peace of mind. No matter what happens, you can be

assured that your loved ones will be taken care of.

SORTING OUT SENSITIVE ISSUESAny business or estate plan involves many factors: finances, insurance, legal documents and

personal feelings. Our consultants are skilled at asking the hard questions, such as how to

treat off-farm children equitably, how to protect a farm from an impending divorce or how to

select a next-generation successor for the farm. We are able to speak dispassionately with fam-

ily members, which allows us to move the process along and put each member at ease.

NOT A ONCE-AND-DONE TRANSACTIONEstate planning is not a one-time event.

Businesses are dynamic and evolve year by year. Estate tax laws change. People get married or

divorced or become disabled. Babies are born. Children return to the farm after college with

ideas for improving the business.

After implementation of a plan, the next step is review. We will review your plan with you an-

nually so we can help keep your plan on track.

39

WEIGHING HEALTH CARE COSTSOf course, the 900-pound gorilla in the room is how the cost of health care for the senior gen-

eration fits into estate planning, retirement planning and transitioning the business. We will

help you understand the implications of Medicare and will discuss the limited coverage and

strict qualification requirements for Medicaid.

ALL YOUR TRUSTED ADVISORS AT ONE TABLEOther professionals whom you trust are welcome to participate in our estate planning pro-

cess so that you can ensure that everyone servicing your business is working toward the same

goals. This collaborative approach will also help you understand how many of your decisions

are interrelated. Additional participants often include life insurance agents and lawyers. For

our part, we bring Farm Credit East tax specialists, appraisers or your loan officers to the table

as needed.

FAMILY BUSINESS TRANSFERSWe focus on ensuring that the senior generation has adequate income or assets for retirement.

Some customers are so accustomed to making sacrifices for the next generation that they

believe they can live on less income than they need. We will work with you to make an hon-

est assessment of what you will need in retirement with a safe margin, so you don’t sell your

retirement years short.

• We help families develop a successor by utilizing the Farm Credit East GenerationNext

training program.

• Continuity of the business is a key aspect of every plan. We help families maintain their busi-

ness legacy for future generations as well as their favorable reputation in the community.

• Much of the transfer process revolves around a definition of each family member’s personal

responsibility. This gives each member a stake in the future of the business and an under-

standing of their role in the planning process.

DON’T GAMBLE WITH YOUR LIFE OR YOUR LEGACYCall your local office to learn more about how a Farm Credit East consultant can help your

family achieve its estate planning goals and increase your certainty about your business’s

future in the process.

Estate Planning

40

FREQUENTLY ASKED QUESTIONS When should I begin estate planning?

The sooner a family initiates the process, the easier it is. Beginning early allows you the

time to accumulate the dollars required for the senior generation’s retirement without

harming the future of the business. Ideally, you want to begin planning when you are

around 55 years old and your children are in their 20s. This gives you a 10-year window

to transfer assets and management. At 65, you will be easing into retirement and your

children, at 35, will have gained the skills to manage the operation. We encourage people

to take a leisurely approach to estate planning.

How does a consultant work with our family on estate planning?

A Farm Credit East consultant creates an environment of mutual expectations so your

estate plan will be successful. We ensure that each player has a chance to help the owner

make choices about what he or she wants to implement. We organize consistent meetings

and check in to see that each participant accomplishes their specific responsibilities so as

to be sure that the plan is implemented as expected. Managing consistent meetings on a

timely basis and ensuring that we arrive at clear conclusions offers tremendous value in

moving the process forward.

Does transferring a business to the next generation also mean the transfer of control?

The transfer of equity doesn’t necessarily mean the transfer of control. Our consultants

will discuss many options with you so equity can be moved to the next generation with-

out the senior generation giving up control in the business.

Who should do estate planning?

Estate planning is essential for all business owners. We help families with various levels of

net worth create an estate plan so they can leave assets to the next generation. By working

with a Farm Credit East consultant, you will develop a plan that ensures that the senior

generation has a comfortable retirement by first determining a realistic view of their retire-

ment needs, including the cost of health care and how nursing home care will be paid.

41

Estate Planning

42

HOW WE HELPEDThe Mann family found an independent voice, as well as a

wealth of knowledge regarding estate planning, in Farm Credit

East consultant Jon Jaffe. “Jon helped us get to the bottom

of issues, come up with a plan and ensured that the plan was

followed. You need all three of those components for an estate

plan to succeed,” said Keith.

Jon helped the Mann family navigate through the personal

process of estate planning by drawing on his years of profes-

sional experience with ag businesses. “Our estate plan wouldn’t

have gotten done without him,” admitted Keith. “I feel good

knowing that a professional agrees that this is a fair plan.”

“

A VIEW FROM THE FIELDHOW DO YOU CREATE A FAIR ESTATE PLAN FOR THE WHOLE FAMILY? Keith and Monika Mann know well the complexities of estate planning, particularly with

a large family. “Running a business with family is difficult, because you have siblings who

are not involved but need to be treated fairly,” said Keith. “Also, my father, who developed

the farm in his lifetime, wants to ensure that it stays in the bloodline. And my wife, who

committed her married life to this farm, wants to be protected. That’s a lot of juggling.” The

Manns wanted to create future plans for their two businesses that were equitable; but with so

many stakeholders, the challenge was daunting.

Our estate plan wouldn’t have gotten done without Farm Credit East.”

“With estate planning, it’s nice to have an outside professional in the room. When a family member asks the tough questions, Farm Credit East provides an independent voice that helps us come up with a plan that is fair.” – Keith Mann

Keith and Monika Mann, owners of Mann Farms, Inc. and Orcranics, LLC in Buzzards Bay, Mass. “I’m running the farm, but my family wants to know how I’ll protect them,” said Keith. “Farm Credit East helped me do that.”

43

Financial Benchmarking

Customized management review guided by a business consultant.

WATCH THE VIDEOLearn more about Farm Credit

East financial benchmarking at youtube.com/FarmCreditEast

or on our website.

Stephen McKnight, co-owner of River-Breeze Farms in Chase Mills, N.Y.

44

Some farm owners are often so busy working in their busi-

ness that they can’t work on their business. Consequently,

Northeast farmers leave tens of millions of dollars in profit

on the table each year and fail to earn what they should for

all of their hard work.

At Farm Credit East, we are passionate about providing

Northeast farms of all sizes and types with the business

tools required to become more profitable. One of our most

powerful tools in this regard is our financial benchmarking

program.

We offer four benchmarking programs:

• Dairy

• Agricultural Retail

• Winery

• Green Industry

WHAT IS BENCHMARKING?At Farm Credit East, benchmarking is a process that allows

you to collaborate one-on-one with a Farm Credit East con-

sultant. Working together, you will:

• identify areas of your business that are holding you back

• compare your business to industry peers

• develop an action plan based on your business’s data

• identify ways to increase your profitability

COMPREHENSIVE MANAGEMENT REVIEW GUIDED BY A BUSINESS CONSULTANTA Farm Credit East benchmarking program is a unique way

to evaluate and continually improve the operational and

financial management of your business. You will gain access

not only to invaluable information and insights, but to a

business consultant who will help you use those insights to

improve the profitability of your business.

45

Participation in a benchmarking program delivers an objective view of your operation by

comparing your financial and operational data both to industry standards and to data sup-

plied by other successful producers within your industry. The in-depth analysis of this data

results in findings that are then personalized to your business.

One of the most important aspects of this process is the assistance you receive from a Farm

Credit East consultant, who will visit your business, review the findings with you and offer

constructive feedback and planning advice. Participants use the insights, examples and data

they receive to continually improve their operations.

HOW BENCHMARKING WORKS • Data collection. A Farm Credit East benchmark specialist will work with you to compile

data that profiles many aspects of your business, including profitability, customer counts,

employee compensation and benefits.

• Data analysis. We will incorporate your results with data from other operations in your

type of business to illustrate how your business compares to others of similar size, scope,

profitability level and geographic area.

• Benchmarks report. You will receive a customized, in-depth report that gives you a com-

parative snapshot of your business — a report card that details how your business differs

from your competitors’ in profitability, sales per customer, net profit per days of operation,

labor costs and more. With this report and insights from your consultant, your manage-

ment team has the tools to determine how and why your business is different, and whether

those differences are positive or need to be worked on.

• Comprehensive seminar customized to your unique group. You’ll hear presentations on

targeted management topics and get answers to your questions. You will also join forces

with other business operators to gain a better understanding of your industry and explore

practical solutions.

• Gain focus, take action. Following the seminar, a Farm Credit East consultant will visit

your business to review your personal benchmark results in detail with you. This is your

opportunity to work on your objectives and pick up a personalized action plan on how

improvements will impact your bottom line.

• Program extras. You can also enjoy networking opportunities, small group meetings on

special interests, webinars and access to a members-only community.

Financial Benchmarking

46

FREQUENTLY ASKED QUESTIONS Who participates in the benchmarking programs?

The benchmarking programs are customized for successful and progressive owners of

dairy, ag retail, winery and green industry businesses who are focused on achieving

maximum results. Large and small operations are encouraged to participate.

How do I report data?

Before the seminar, you will complete a worksheet that profiles many aspects of your busi-

ness, from income to production. Your Farm Credit East consultant, loan officer or records

specialist will sit down with you to complete the worksheet in your office.

What reports will I receive?

At the seminar, you will receive copies of your personal benchmarks report that will focus

on your business and offer a wide range of useful reports — from a comparative earnings

statement to operations analysis.

• Balance Sheet

• Cash Flow Summary

• Comparative Detail Expense Analysis

• Comparative Earnings Statement

• Compensation and Benefits for Key Employees

• Equipment Analysis

• Financial Ratios Summary

• Regional Benchmarks

• Size and Efficiency Factors

• Your Comparison to Other Businesses of Your Size

47

Financial BenchmarkingFREQUENTLY ASKED QUESTIONS

How would I use this program?

Business owners enter the program with lots of questions about improving their opera-

tion, including …

• How can I decrease labor expenses?

• How does my business measure up against other top businesses?

• How do I know when — or if — it is time to expand my operation?

• Are my employees’ compensation packages competitive?

• I had a large amount of shrink last year. Why?

… and they leave with answers.

Do you need to be a Farm Credit East member?

No. While many Farm Credit customers participate in our benchmarking programs, it is

not necessary to have a Farm Credit East loan to participate in one.

Stephen McKnight, of River-Breeze Farms in Chase Mills, N.Y. When Stephen and his family are faced with difficult management

decisions regarding their dairy farm, they turn to their bench-

marks report for good strategy.

48

A VIEW FROM THE FIELD

Farm Credit East brings our business to the next level.”

“

HOW CAN YOU BE SURE THAT YOUR DECISIONS ARE INFORMED?Stephen and Mary Lou McKnight own and manage River-Breeze Farm in Chase Mills, N.Y.,

along with their son, Travis, his wife, Natalie, and their son-in-law, Steven Billing. As a strate-

gic manager, Stephen believes in using more than his gut when it comes to making decisions

for his business. For example, when faced with the choice of purchasing custom-raised heifers

or raising their own, he would rather let the numbers do the talking.

HOW WE HELPEDFor several years, Stephen and his family have worked closely with Farm Credit East consul-

tant Mark Mapstone as part of the Dairy Benchmarks program. Not only does benchmarking

allow Stephen to chart his business’s strengths and weaknesses from year to year, it also shows

him where he stands in relation to the competition. “We base many of our decisions on

where we stand in the industry,” he explained. “For example, we recently started raising our

own heifers, based on our benchmarks report. We compared our profitability with those in

the industry and worked with Mark to make a decision that was right for us.”

“We don’t hire Mark to be our cheerleader. We want him to dig in to find our weaknesses and point out where we can advance our busi-ness. The benchmarking program is invaluable in doing this analysis.” – Stephen McKnight

49

Grant Writing

We position our clients to succeed.

WATCH THE VIDEOLearn more about Farm

Credit East grant writing at youtube.com/FarmCreditEast

or on our website.Ron Gruschow, owner of Sunny Knoll Farms in Lima, N.Y.

50

Farm Credit East offers grant-writing services to help

farms and agribusinesses grow, change or expand their

enterprises.

From our years of ag development experience, we find

that both public and private sector entities are very

interested in supporting agriculture and helping the

industry grow and change. We therefore look for grant

resources or other economic development incentives

that will help our clients succeed.

We first determine if a grant program applies to your

project. Public entities have specific objectives that

they try to achieve when offering grants, and they

often have relatively narrow and specific requirements.

Matching the appropriate program to a producer’s

activity or investment is a key part of the equation that

we do well.

TYPES OF GRANTS WE WORK WITH• Value-added producer grants

• Economic development programs

• Energy-related grants

• Special state programs

As two examples, value-added producer grant programs

help producers turn the raw material that they grow

into a value-added product. In addition, we work with

economic development agencies at the state and local

levels to find funds for farms that are adding jobs or

developing a value-added business that will add jobs to

the local economy.

We have written a multitude of grants, so we under-

stand program requirements, and we also know where

to look to find additional funds. Many grant require-

ments involve a feasibility study, which we will prepare

as we help you tell the story of what you are trying to

achieve.

OUR SERVICES• Locate economic

development incentives and/or public and private sector grant programs that apply to your goals

• Write grant applications that:

• articulate your project’s

story and its benefits

effectively

• determine a grant’s

applicability to your

objectives

• meet the application’s

objectives and

requirements

• Prepare a feasibility study for programs that require one

51

Grant WritingFREQUENTLY ASKED QUESTIONS

What does this grant-writing service cost?

The cost varies based on the number of hours required to complete the grant application

and its related reports. Our goal is to not go over the threshold of 5 percent of the expect-

ed grant return.

Will I get billed even if I don’t get the grant?

Yes. Our team is skilled and in demand; their time has a value, as does yours.

When will I know if I get funded?

That depends entirely on the funding entity and their process for scoring and announcing

awardees. It can range from a few weeks to several months.

What is your track record for receiving grants?

It varies depending on the program and, more importantly, on the quality (preparedness,

detail, eligibility for program) of the project and the skills and experience of the grant

writer. You are investing based on both of these factors. If we don’t see reasonable oppor-

tunity for success, we won’t take on your project.

What do you need from me, and how much time will it take me to provide it?

The success of a grant request is largely based on the applicant’s preparedness to apply for

a grant, which is the product of your thorough understanding of your project mission and

objectives. A successful grant request requires a well-thought-out business plan (either on

paper or in explanation), plus a drive to succeed and a minimum of funds to provide the

required match.

Ron Gruschow, owner of Sunny Knoll Farms in Lima, N.Y.It is important to the Gruschows’ farm that they take advantage

of grant opportunities. Their partnership with Farm Credit East provides them the expert assistance that they need to do so.

52

WHO CAN HELP YOU GET THE GRANTS YOU NEED?Ron Gruschow and his family recently added acreage to their upstate New York farm, increas-

ing grain storage for corn, wheat and soybeans. Ron wanted to apply for a grant from Nation-

al Grid that would help upgrade his farm to 3-phase electric service. He also wanted to iden-

tify other grant opportunities that may be available. However, Ron found the grant-writing

process to be time-consuming and labor-intensive, and was hoping to find expert assistance.

A VIEW FROM THE FIELD

Farm Credit East’s grant expertise is second to none.”

“

HOW WE HELPEDFarm Credit East provides its customers with informed grant-writing assistance. Ron worked

with one of Farm Credit’s advisors Nathan Rudgers to navigate the application process and

secure the 3-phase power incentive grant he had hoped to get. Additionally, Nathan helped

Ron successfully apply for a grant through the USDA Renewable Energy for America Program.

The result? Ron was able to save 25 percent of the cost of his farm’s new grain dryer system.

“The time frame we had to apply for these grants and have our new grain facility running was

limited,” said Ron. “Without Nathan and Farm Credit East, the grants would have passed on

to somebody else. Nathan is one of my trusted advisors.”

“The paperwork and online process for grant applications is enormous. Farm Credit East worked with me every step of the way.” – Ron Gruschow

GenerationNext

Management development for today’s young business leaders.

Learn more about Farm Credit East

services at FarmCreditEast.com.

Kevin and David Bittner of Singer Farms in Appleton, N.Y.

54

When it comes to managing a farm operation, you’re called upon to master many aspects of your business, from motivating employees to understanding a balance sheet.

Join our farm business consultants and your fellow young farmers in GenerationNext, a series of seminars hosted by Farm Credit East and designed to advance your management skills and business knowledge. Each seminar includes group discussions, idea sharing and opportunities to network.

In addition to each seminar, you’ll receive a self-paced computer-based course that supports the fundamental skills covered by the program as well as a take-home portfolio filled with handouts and worksheets. You will also receive assigned materials to help you prepare for the following seminar.

WHO SHOULD ATTEND?GenerationNext is optimal for those people, ages 20 to 35, who will be the next generation operators of a family business. By participating in this program, you will be able to:• Identify areas for personal growth and development • Acquire tools to help manage an agricultural business• Network with other young industry leaders

SAMPLE AGENDADay 1: Becoming a better boss, coach and mentor• Leadership• Team building• Effective communication• Problem solving

Day 2: Using financial records to manage and develop business goals• Interpreting and understanding financial records• Using financials to test and achieve goals• Budgets• Inventory management• Capital investment

Day 3: The third seminar is tailored to each participant group. Possible topics include:• Customer service• Marketing• Pricing• Risk management• Dealing with change• Business plans

55

GenerationNextFREQUENTLY ASKED QUESTIONS

I’m new to agriculture. Will I be able to keep up with the discussions?

GenerationNext focuses on business and financial management for agricultural operations. Class discussions are more about the dollars and cents aspects of ag businesses than about plants or cows. Discussion is tailored to the skills and needs of each class. You can expect in-termediate or college-level instruction, but no prior knowledge of financial terms is necessary.

I’m an experienced manager. Will I benefit?

Experienced managers can also benefit from a refresher course, even if you have a college degree or years of management experience. You will pick up valuable insights from our farm business consultants as well as from your GenerationNext colleagues in the class. Addition-ally, you can share challenges that you’ve faced in your business during class discussion.

When and how long are the seminars?

The seminars take place over a period of three months, one per month, and are generally held in the fall or early winter. They run from 9:30 a.m. to approximately 3:30 p.m.; lunch and refreshments are included. Check with your local Farm Credit East branch office for specific dates in your area.

Do I need a special computer or software?

In addition to seminars, we supply the GenerationNext computer course on a flash drive. The course runs on a PC or Mac computer and works with most web browsers. No special software, Internet access or specialized computer skills are necessary. It is helpful to be familiar with Microsoft Excel, but it is not necessary.

I’m on a budget. Is the program worth the investment of my time and money?

Good management separates top performing farms from those that fall behind. This course will give you the tools to manage your business profitably. Past participants speak highly of the program, but investing is a decision that only you can make.

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STEPPING INTO A NEW ROLEDavid and Kevin Bittner have agriculture in their DNA as well as parents who are dedicated to helping them cultivate that inclination. Both brothers are becoming more involved in the operation of Singer Farms, the family’s 500-acre apple, tree fruit and U-Pick cherry business.

While the brothers are specialists in agricultural system management and horticulture, they are not yet experts in agribusiness management. When it comes to the financial end of their family’s business, the Bittners looked for help in learning how to strategically manage their diverse operation.

Kevin and David Bittner, of Singer Farms in Appleton, N.Y. Kevin said, “I recommend GenerationNext to young farmers who want to further themselves professionally, as well as their business.”

“Now I can look at our farm’s balance sheet and other reports with better understanding, rather than just asking my father questions. I’m part of the discussion.” – Kevin Bittner

A VIEW FROM THE FIELD

GenerationNext helps us to keep ahead of the curve.”

“

HOW WE HELPEDThe GenerationNext program offered by Farm Credit East is available for young operators, like David and Kevin, who are either middle-managers or managers of a farm or ag business. Through three seminars, group discus-sions and ample networking opportunities, the program allowed the Bittners to target areas of personal growth and acquire the tools they needed to be more effective managers.

“GenerationNext definitely provided me with informa-tion on how to be a good manager,” said David. “Now we can show employees an analysis of their benefits, like housing, utilities and insurance, and the amount of in-come they would need to make working for someone else in order to make up for those benefits.”

“By making use of our financial data, I can make deci-sions that are justifiable, rather than based on emotion,” said David. “For example, by using partial budgeting, I can show the justification for buying a new tractor using the numbers, including the cost of repair for an old trac-tor and the number of hours that the mechanic could be working on another piece of equipment.”

57

Appraisal Services

Appraising your assets calls for ag-specific expertise.

Learn more about Farm Credit East

services at FarmCreditEast.com.

Throughout the life of your business, there will

be times when you need to know the value of

your assets. Farm Credit East offers valuation

services for real estate, including a variety of

land types and personal property, such as gen-

eral and specialty machinery and equipment.

When you’re in agriculture for keeps, it’s good

to know an appraiser who is too.

David Peterson of Swedish Hill, Goose Watch and Penguin Bay Wineries in upstate N.Y.

58

Appraisals are especially important when you:

• Transfer farm assets to the next generation

• Buy or sell real estate

• Carry out estate planning

• Settle an estate

• Gift property

• Transfer business assets to the next generation

• Donate land to a trust

• Sell development rights

• Address property tax issues

• Develop a business plan

Farm Credit East assists more agricultural businesses and families with appraisals than any

other firm in the Northeast. Whatever your appraisal needs, you can rely on us for prompt,

informed guidance and information. We offer:

• Ag-specific expertise. Our appraisers combine their knowledge of agricultural assets and

current markets with professional appraisal standards to ensure that you receive the most

accurate appraisal possible.

• The most expansive database. Our depth of experience has allowed us to create the largest

database of agricultural property transfers in our service area, which ensures accurate

appraisals that reflect what’s really happening in the market.

• Trained professionals. To stay sharp and up-to-date, our appraisers complete comprehensive,

ag-specific appraisal training here at Farm Credit East and through leading professional

appraisal societies.

• Exceptional follow-through. Our appraisers can work directly with your attorney, as well as

our tax consultants. In fact, our entire team is ready to help you put your appraisal to best

use — for property sale, estate transfer, estate planning and more.

WHAT DOES FARM CREDIT EAST APPRAISE?Our appraisers are specialists in determining the value of:

• Land and buildings, including barns and outbuildings

• Specialty agricultural buildings

• Large land parcels

• Ag processing facilities

• Mineral royalties

• Standing timber

• Timber processing facilities

• Conservation easements

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Appraisal ServicesFREQUENTLY ASKED QUESTIONS

What is the appraisal based on?

We use one of three different approaches to reach an appraisal value. We base it on:• The income your ag-asset generates• The comparative sales value of your agricultural asset to the sales of other similar agri-

cultural assets• A cost approach where we take the brand new cost of your structural improvements,

reduce it by the amount of wear and tear it has received, as well as other forms of depre-ciation, and add the value of the land base

What does an appraisal cost?

The cost of the appraisal is based on an hourly charge for our appraisal staff. You will receive a competitive rate and get an ag-specific appraisal expert to ensure you receive the most accurate appraisal possible.

What kind of appraisal report can I receive?

Our appraisers help you decide what type of documentation is appropriate for your situa-tion, from a restricted-use appraisal to a detailed narrative report. A simple report may be all you need to set a selling price. However, if you’re involved in a court case, a compre-hensive narrative report may be necessary.

Do I have to borrow through Farm Credit East to use this service?

No. Anyone with an ag business or rural property can take advantage of our appraisal service whether or not they borrow from Farm Credit East.

Why is the value appraised at Farm Credit East different than the assessed value that shows up on my property tax bill?

Assessments are made for the specific purpose of taxation under special rules and as of a particular date. They are likely not reliable for a different purpose. An independent market value appraisal provides a good review of your assessment.

Is the appraisal based only on market value?

Our appraisers can base their valuation of your property on its current market value, ag-ricultural or special-use value or value as of a particular date. We work with you to ensure that you receive the type of appraisal you need.

How do you appraise unique items?

This really depends on the item. Usually, our appraiser will find a similar item that sold in order to provide a well-supported value on the item.

60

WHY AN APPRAISAL?Since 1986, David Peterson’s parents, Cindy and Dick, have

grown a small part-time winery in Romulus, N.Y., into an

ever-expanding business employing 30 full-time employees

and 70 seasonal employees over three properties. Cindy and

Dick involved David in the growth of the business while

keeping succession planning in mind to ensure that the busi-

ness would remain in the family.

When they started thinking about transferring the busi-

ness, they realized the process required a complete valua-

tion of the business’s assets and would take several years to

complete. With three wineries and additional tasting rooms

across upstate New York, the appraisal process would be no

small task — and accuracy was key.

A VIEW FROM THE FIELD

“We couldn’t have managed our appraisal without Farm Credit East.”

“When you transfer a business between generations, you have to be concerned that you have adequately documented value and accounted for all assets. Working with John Nicholas and Farm Credit East ensured that we did.” – David Peterson

David Peterson, of Swedish Hill, Goose Watch and Penguin Bay Wineries in upstate N.Y. As David and his parents prepared to transfer ownership of their expanding business, Farm Credit East provided the groundwork they needed for a smooth transition.

HOW WE HELPEDWhen it came time to transfer the Peterson’s business to

the next generation, Farm Credit East appraiser John Nicho-

las knew just where to start. He rolled up his sleeves and

researched their equipment values in preparation for a partial

transfer. “Our equipment is housed in three locations. It’s a

big process,” said David Peterson. “Without John’s work, we

would have been grabbing numbers out of the air. I was im-

pressed that he could arrive at values for so much specialized

equipment, and especially for older pieces.”

John Nicholas’s extensive appraisal experience with ag equip-

ment and properties gave the Petersons peace of mind in

knowing that the process was being done right. “John and

Farm Credit East helped us to learn the value of what we

owned. We couldn’t have moved forward without it,” said

David.

61

Insurance Services

WATCH THE VIDEOLearn more about Farm Credit

East insurance services at youtube.com/FarmCreditEast

or on our website.

Managing risk is critical to your business success.

Mike Northrup, owner of Northrup and Sons, LLC in Rodman, N.Y.

62

Crop Growers Insurance

Farm Credit East offers crop insurance through its Crop Growers, LLP insurance agency. We call

it weather management insurance, although it can also be structured to insure you against

market fluctuations.

Most people agree that markets and weather are experiencing higher highs and lower lows.

Crop insurance provides a safety net that limits the lows based on the percent deductible that

you choose.

Managing the risks you face every day is an important part of running your business. Crop

insurance can be an important part of your risk management plan. Our crop insurance experts

can tailor a program of insurance covering your needs with one of the following policies:

• Multi-peril policy. A little peace of mind goes a long way, especially when it’s easy and af-

fordable to obtain. Multiple-Peril Crop Insurance (MPCI) can help you take some of the risk

and worry out of the whims of nature. We call it “weather management” insurance, because

it can protect your financial wellbeing from nearly all natural disasters, including drought,

excess moisture, cold and frost, flood, wildlife and unavoidable damage from insects and

disease. Yield and revenue protection are combined under a single policy for corn, soybean

and wheat. The Chicago Board of Trade sets the price.

• Livestock gross margin/dairy. Protection for dairy producers from rising feed costs or

falling milk prices.

• Crop-Hail. Gives you additional acre-by-acre protection that can be up to the full value

of the crop. While not subsidized by USDA, it does provide additional flexibility for extra

coverage above MPCI on high-value crops.

INDUSTRY LEADING CUSTOMER SATISFACTION• 96 percent thought our agents responded to their needs in a timely manner

• 98 percent thought our call center employees were helpful in solving their problems

• 96 percent were satisfied with our overall customer service

• 96 percent said they would recommend Crop Growers to a friend.

We’re proud of what our customers told us in our customer satisfactory survey. We work hard

every day to continue to earn their business.

63

Insurance Services

Why Crop Growers?

Our Crop Growers agents specialize in crop insurance and work on a team of Farm Credit

East experts to provide customized, comprehensive management plans. They are salaried

professionals that base their guidance on what’s best for you and not on commissions.

How much paperwork is involved?

All you need to supply is your planted acreage records and prior production records. In

addition, perennial crop producers supply a pre-acceptance worksheet with information,

such as insurable and uninsurable areas and crop age. That’s it!

How much of a loss do I need to incur to receive coverage?

Qualified losses range from 25-to-50 percent, based on your coverage election. If you

maintain production records by farm serial number, crop type, practice or noncontiguous

land, you may be able to break your farm into separate insurable units. A crop loss on just

one parcel, for example, may qualify for an indemnity payment. Talk to your agent about

crop provisions for optional unit requirement and eligibility.

Do I have to use the county average yield in setting up my production history?

Your production records, not the county average, are used to determine the production

history. Only when you lack proper records is the county average used.

How much does crop insurance cost?

Federal subsidies make crop insurance an affordable safety net for your business. Actu-

ally, the cost of crop insurance is well below the cost of commercial private insurance

and ranges from just 2-to-7 percent of the liability. Government subsidies range from 55

percent to 100 percent of the liability. And, based on the numbers mentioned above, the

cost/risk of self-insuring is far greater.

FREQUENTLY ASKED QUESTIONS Crop Growers

64

What crops are covered?

All crops are not insured in every county. But if you grow a crop that is insurable some-

where in the United States, and it’s not under a pilot program, your crop insurance agent

can request rates that offer the same program and protection as insurable crops. If no

other program is available in the United States, the Noninsured Crop Disaster Assistance

Program (NAP) is available from the Farm Service Agency.

Do I need to be a member of Farm Credit East to use this service?

No, any crop grower can take advantage of this service.

FREQUENTLY ASKED QUESTIONS Crop Growers

Crop Insurance Plan Comparison ChartWhat We Can Do for You!

Production-based coverage protects the producer against a yield loss

ACTUAL PRODUCTION HISTORY

TOPIC

BENEFITS

INSURES AGAINST

GUARANTEE

PRICE

Production loss

APH yield X selected level

Selected percentage of the market price established

Establishes a dollar guarantee based on the Commodity Exchange Price Provisions (CEPP) projected price

REVENUE PROTECTION

Revenue loss due to increase or decrease in price, low yield or combination of these

Approved yield X coverage level X greater of projected price or harvest price

Commodity Exchange Price Provisions (CEPP) projected price

Production-based coverage protects the producer against a yield loss

CATASTROPHIC COVERAGE

Production loss

Approved yield X 50% level

55% of the maximum protection per acre as established by FCIC

65

Credit Life Insurance

FOR PROTECTION FROM THE UNEXPECTED

You are the most important part of your business. Don’t leave yourself unprotected. Farm

Credit East understands the value of protecting the lives of our members. That’s why we offer

credit life insurance, which provides added financial security to your family and your busi-

ness.

When making a major change to your business, such as taking on new debt, renewing a loan

or bringing on a new partner, it’s a good idea to review your insurance coverage. Our knowl-

edgeable staff can provide convenient quotes and cost-effective coverage tailored to your

unique business objectives.

GROUP TERM• Designed to automatically pay off or reduce your loan upon your death

• Convenient one-page application

• Guaranteed renewable to age 74

• Disability rider available for up to a $10,000 annual benefit

INDIVIDUAL TERM• Guaranteed premiums for 5-, 10-, 15-, 20- or 30-year periods

• Ideal for larger life insurance needs, such as income replacement, buy/sell agreements,

key man insurance or estate planning

• Requires a longer application, with a short paramedical exam

Insurance Services

66

What is credit life insurance?

Credit life insurance covers the outstanding balance of your mortgage or loan. The cover-

age provides money to help your family or farm business repay the loan in case of your

unexpected death. It also gives them time to deal with their loss and temporarily relieves

them of major financial stresses.

How much credit life insurance do I need?

Most people should carry enough insurance to cover all outstanding debt. Two other areas

to consider after debt coverage are income replacement and dependent coverage. A com-

mon estimate is five times your annual income.

Who may participate in the insurance program?

All Farm Credit East customers under age 70 may apply, including your spouse and partners.

Can I insure just a portion of my loan?

It’s important to protect your entire debt, but you decide the percentage of your loan that

you want to insure.

After my loan is paid off or refinanced, what happens to this insurance?

Once a loan is paid in full or refinanced, you can keep the insurance by simply transfer-

ring it to another Farm Credit East loan. If you don’t have other Farm Credit East loans,

you may convert to an individual policy.

How often do I make payments?

Many businesses have fluctuating cash flows throughout the year. You may pay monthly,

quarterly, semiannually or annually. Or you can have the policy charged to your line of

credit.

FREQUENTLY ASKED QUESTIONS Credit Life Insurance

67

Insurance ServicesFREQUENTLY ASKED QUESTIONS Credit Life Insurance

How do I apply for credit life insurance?

Simply complete an application at your local Farm Credit East office. Most customers

enroll when they apply for a loan.

Do I need to take a physical exam?

Many customers do not need to take a physical exam. If one is required, the insurance

company will pay for it.

What is the approval process?

In some cases, members can be approved right at their local Farm Credit office.

Who provides my customer service?

Thousands of Farm Credit customers participate in this program. Farm Credit East pro-

vides customer service and personalized assistance in all areas, including claims.

Who is the insurance underwriter?

Our partner is Minnesota Life Insurance Company, a Securian Company. They have

insured American farmers for more than 50 years, and their financial strength is excellent.

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HOW DO YOU PROTECT YOUR CROP FROM MOTHER NATURE?“Planting a crop means sticking a lot of money in the

ground,” says Mike Northrop. Mike owns and operates

Northrop and Sons, LLC, a busy dairy farm in Rodman,

N.Y., where he and two of his sons grow corn and alfalfa

for forage on about 500 acres of owned and rented land.

The family sells part of their crop to an ethanol plant and

to other farmers for silage. With so much invested, Mike

felt the need for protection against the conditions they

can’t control.

HOW WE HELPED To shield against revenue loss from low yield or market

fluctuations, Mike turned to Farm Credit East for revenue

protection insurance. For his hay crop, he now carries

pasture, rangeland and forage coverage, which protects

him from loss due to lack of moisture.

“Crop insurance has given us a lot of comfort,” he said.

“Jeremy Forrett, my Crop Growers agent, is very respon-

sive. He takes all the worry out of it. I also like that my

agent is salaried. If I buy a little or a lot, it has nothing

to do with his personal livelihood, and that’s important

to me.”

“As long as I grow crops,” says Mike, “I will take advantage of crop insurance to protect my investment.”

“Of all the insurances that I buy, crop insurance is a good buy that has paid me more than I have paid in. It helps me sleep at night, because if all goes bad, I have something to fall back on.” – Mike Northrop

A VIEW FROM THE FIELD

Farm Credit crop insurance takes all the worry out of growing.”

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800.562.2235 | FarmCreditEast.com