From locks and lights to high-tech sensors, farm families have wide-ranging security options. According to one veteran lawman, though, common sense is often the best defense against rural crime.

“Remember that what’s convenient for you is also convenient for the bad guys,” says Crawford County Sheriff Sandy Horton who is also executive director of the Kansas Sheriff’s Association.

“When you stack those bales right by the road or leave that anhydrous tank parked in plain view, you’re making it easy for potential thieves. Out of sight, out of mind isn’t a bad rule of thumb in rural America.”

That’s especially true, he says, when farm assets are located away from the farm home. His golden rule is to never make the thief’s mission an easy one. Cattle pens located near a pasture gate on a lonely country road are a “welcome mat” for rustlers, for instance. Machinery, hay bales, anhydrous tanks, grain bins and other items situated in dark and isolated — but easily accessible — locations make the thief’s job easier.

Horton, a 33-year law enforcement veteran, emphasizes that prevention is especially critical because recovery of stolen property is a difficult task. There are simple things that can be done, however, to strengthen farm security.

“There is nothing wrong with calling the sheriff’s office to let them know when you’re going to be gone for a few days,” he says. “If at all possible, they’ll include your location on their regular patrols. Notifying a neighbor you trust is also a good idea, especially so he or she can pick up your mail and newspapers — a full mailbox is an indicator that no one is home and, believe me, there are people who look for little signs like that.”

“And don’t be afraid to report suspicious activity in your neighborhood. Most of the time there will turn out to be a good reason for what you’re seeing but law enforcement personnel would rather be informed right away than find out about it later.”

Horton says it is also important for farmers to know what they have and where it’s located. “That sounds simple but it’s a good idea to keep track of where everything is and to stop and think about its value in relation to its vulnerability,” he notes. “Prioritize your assets but remember, often times thieves aren’t after the most expensive items. With the current price of metal, for instance, the copper line on your propane tanks is a target. The same goes for old equipment you’re probably not all that concerned about. The problem is that a thief may be attracted to your place for those sorts of things and then, once he’s there, discover an opportunity to steal higher-value items.”

While preventing crime is Horton’s focus, he also suggests that farmers take steps to facilitate the recovery of stolen property.

“It’s very common for law enforcement to recover stolen property but not be able to identify its rightful owner,” he points out. “Record ID numbers on equipment, photograph your assets. If something doesn’t have an ID number, do it yourself. Some sheriffs’ departments offer programs to assist you in that.”

There are also high-tech tools that can be used in property recovery as well as in crime prevention. Relatively inexpensive GPS devices can be attached to high-value equipment or property to track their location. Video cameras can record off-hours activity in secure locations and can be monitored from the home, office or by a security company. Lighting, especially when triggered by motion sensors, is an effective deterrent and driveway annunciators can transmit an alarm signal up to 2,000 feet to report unauthorized entry.

All of these tools are effective at protecting farm assets but the foundation of farm security is pretty simple, according to Sheriff Horton.

“Know what you have. Know where it is. Pay attention to what’s going on in your neighborhood and don’t sacrifice security for convenience — if it’s easy for you to access something, it’s easy for the bad guys, too.”

Other rural crime prevention considerations include:

• Access to farm computers containing confidential information should be limited.
• Don’t hide keys. Intruders often know where to look for them.
• Inventory all locks and keys and periodically account for each of them. Require employees to sign for keys and issue them only as needed.
• Consider high-security locks that are pick-resistant and have “Do Not Duplicate” embossed on keys.
• Obtain background checks on employees you didn’t previously know.
• Use hinges that prevent the gate from simply being lifted off its hinges.
• Vegetation that could provide cover for intruders in asset areas should be eliminated.
• Security lights in key locations are more effective when triggered by motion sensors. Consider “glare” lighting aimed away from assets and at points of access to discourage intruders and make it more difficult for them to identify items.
• Don’t leave equipment — such as forklifts or front-end loaders — accessible that can be used by thieves to steal other items.
• Park anhydrous ammonia tanks in secure areas. If that’s not possible, place them at the rear of the field rather than along a roadside and remove hoses when not in use.
• Secure bulk chemical tanks with locks at main openings and lock sight gauges.
• Make sure you know the requirements and conditions of your property insurance.

“And,” Sheriff Horton concludes with a smile, “don’t leave the keys in your pickup.”

Farmers and the Farm Credit System have been sideby- side at the heart of America for 95 years. The seeds that grew into the nation’s oldest and largest financial cooperative were planted because of a critical need. Early in the 20th century, farmers made up 31 percent of the population — compared to less than 1 percent today — but they lacked access to fair, reliable credit to produce the food and fiber the nation needed.

In 1916, Congress passed the Federal Farm Loan Act establishing a cooperative credit structure based on 12 Federal Land Banks financed by private investor capital.

It was an important recognition of agriculture’s essential role in the American way of life. And just as agriculture itself has made huge strides forward in the past 95 years, so has its financial partner, the Farm Credit System. Today, the System has more than 500,000 farmer-borrowers in a network of customer-owned lending institutions. Its assets exceed $214 billion and the Farm Credit System provides more than one-third of the credit needs of rural America, along with important related business services.

System institutions, like Frontier Farm Credit, serve agriculture as dedicated, reliable and competitive sources of credit, providing more than $160 billion in loans to agriculture and rural America in all 50 states, the District of Columbia and Puerto Rico. Today’s Farm Credit System is wholly farmer-owned and farmer-driven.

From a time when less than 10 percent of farms had electricity to an era of awesome technological sophistication, the financial requirements of farmers and ranchers have evolved dramatically. And yet, that basic need for reliable credit, upon which the Farm Credit System is based, is more critical than ever before. The soaring productivity of today’s farmers and ranchers takes place in an increasingly complex business environment marked by a challenging volatility in both cost and income.

It is a scenario that demands high-level business savvy as well
as capital.

“As a customer, I’m not out here on an island,” says Council Grove rancher Bill Miller who chairs the Frontier Farm Credit Board of Directors. “The people of Frontier Farm Credit have the expertise to provide me with good advice because they have an excellent knowledge of agriculture in general and of my operation in particular. I think that’s the key to Frontier Farm Credit’s success — providing access to a very high level of dependable expertise. That has been extremely beneficial to so many people, including me.”

The business services package offered by Frontier Farm Credit, Miller believes, is an integral part of focusing on customer needs. Record keeping, business and estate planning, online banking, tax planning, crop insurance and other services reflect a rising level of sophistication in today’s agriculture, he says.

And as member-borrowers face new business challenges, Frontier Farm Credit has stepped forward to provide the financial products they need. Miller is particularly proud of Frontier Farm Credit’s dedication to helping young and beginning farm and ranch families through programs like AgStart. “As we look at the next generation, it will be more important than ever to understand business and to have access to effective financial products and competitive rate financing. As a board, we always take a long-term view of our customer base and the growth potential for that next generation,” he says.

With all of the financial and business sophistication, however, Miller believes that Frontier Farm Credit’s greatest asset is a simple human understanding of farm and ranch families and the environment in which they live and work. “Knowing the challenges farmers face and understanding the nature of agriculture is the most important thing the people of Frontier Farm Credit bring to the table,” he asserts.

Noting that volatility, weather risk and other factors can expose farmers to financial adversity even when interest rates are low and prices are favorable, Miller says a commitment to the success of its customers is fundamental to Frontier Farm Credit’s mission.

“In the best of times or the most challenging of times, the Frontier Farm Credit focus has always been on the needs of its customers — that’s the foundation of everything we do,” he concludes. “For so many Kansas farms and ranches, Frontier Farm Credit has been, and continues to be, an important partner. Our motto really says it all — “Side-By- Side. Season-By-Season.’”

For more information about the history of the Farm Credit System, access the web site, www.farmcredit.com and go to “About Farm Credit.” To learn more about the lending and financial services provided by Frontier Farm Credit, log onto www.frontierfarmcredit.com or visit with one of the professionals at your local Frontier Farm Credit office.

There are a lot of good reasons to put Kansas pork on Vietnamese dinner tables — about 87 million and counting. Expanding Kansas agriculture’s global footprint in Southeast Asia was the goal of a recent visit by Vietnamese Ambassador to the U.S. Nguyen Quoc Cuong who spent a day in Washington County getting a taste of Kansas pork.

Cuong wanted to see with his own eyes how American pork is produced, especially in regard to his nation’s food safety and hygiene requirements. That’s exactly what he did at Brice and Lynn Sawin’s Brylin Farms. Along with his wife, Ha Hoang, the ambassador walked through a Brylin 2,000- head finishing unit, inspecting the hogs and the facility — and asking lots and lots of questions.

“I was impressed both by how interested they were in our farm and how knowledgeable they were about pork production,” says Lynn Sawin, who is also a customer specialist in Frontier Farm Credit’s Marysville office. “This wasn’t just a photo op for them. They wanted to know how the pigs got feed and water and about the whole production process. They seemed truly interested in gathering information about Kansas pork and taking that information back to their country.”

Lynn says Ambassador Cuong appeared to be particularly impressed with the farm’s mechanization and sanitary controls. “At one point he said, ‘our pigs just run around,’ and I think they were a little leery of entering the finishing unit until they actually went inside and then they were very enthusiastic and wanted to learn more.”

According to Dr. Pete Sherlock, a member of the Kansas Pork Association’s executive board and a Washington, Kan., veterinarian, the farm visit delivered a great first impression of the state’s pork industry.

“At Brylin Farms, the ambassador saw a modern facility with clean, healthy and productive pigs,” he explains. “It was a great snapshot of the American pork industry and a great opportunity for Kansas. The Vietnamese ambassador was very receptive to the information he received and he definitely appeared to be very interested in Kansas pork. Hopefully, this will help lead to increased trade.”

In addition to the Sawin family, hosts for the visit were First District U.S. Congressman Tim Huelskamp, State Representative Sharon Schwartz and Brylin Farms Manager Tim Schwartz. Huelskamp discussed trade prospects between the U.S. and Vietnam with Ambassador Cuong, particularly in light of Trans-Pacific Partnership (TPP) negotiations currently underway. The TPP is a multi-lateral trade liberalization pact that also includes Malaysia, Singapore, Peru, Chile, Australia, New Zealand and Brunei.

Congressman Huelskamp stated, “It was a very unique and special privilege to host His Excellency in America’s heartland. There are great opportunities to increase trade between the United States and Vietnam and I will work to take down barriers and facilitate that. I am enthusiastic about, and proud of, Kansas agriculture and appreciated the opportunity to show the safe products our great state has to offer in the global marketplace.”

Besides contributing to the potential for opening up new markets for Kansas pork, Lynn Sawin recognized the visit as a special opportunity for the Sawin family which includes son Bryant, 10, and daughter, Lindsey, 9. “The ambassador and his wife — both of whom spoke excellent English — were very interested in our family as well as our farm,” she explains. “They visited with our kids and that was a very neat experience for all of us.”

For Vietnam’s growing population, pork is a big favorite, representing about 75 percent of Vietnamese meat consumption. The Southeast Asian nation’s rapid economic expansion means there is now more money to pay for improved diets and an ever-growing appetite for meat. It’s a need that can’t be met by a Vietnamese swine industry dominated by backyard farms and but it is one that Kansas farmers like Brice and Lynn Sawin are both willing and able to help meet.

Growth on the Duane Heck family farm near Westphalia, Kan., could be better measured in ears than acres. The Hecks have used sweet corn and other garden crops to expand their operation’s intensity and increase cash flow.

“We started raising sweet corn about 20 years ago for a little extra income,” Duane explains. “We began with one acre and as our family grew up, so did our sweet corn.”

The family includes Duane’s wife, Ralene, and their children: son Ashton, 23; daughter Kimra Bowman, 21; and daughter Janae, 14. And the sweet corn operation? Well, that’s grown up, too, and now encompasses 45 acres as well as stretching out to include tomatoes, watermelons, cantaloupes and other garden fresh treats.

Frontier Farm Credit has been a partner in that growth ever since the beginning, Duane says. “We financed the farm through Frontier Farm Credit in 1986, and I’ve seen no reason to go elsewhere for credit since that time. It definitely matters to work with people like Rick (Baldwin-based Frontier Farm Credit Financial Services Officer Rick Kuhle) who have an understanding of agriculture — especially as we’ve become more capital intensive on the garden crop acres.”

The garden crops are labor intensive as well as capital intensive. The production goal of the enterprise, Duane explains, is to always have fresh produce for customers. That means getting an early start in the operation’s two greenhouses. One is filled with tomato plants but the other gives the Hecks a jump on the sweet corn market with 130,000 sweet corn plants that are later “replanted” outdoors on about 6.5 acres. Two people ride a mechanized transplanter, feeding the seedlings into the unit that places them in the soil. The greenhouse speeds up development by 2-3 weeks and spreads out the workload for the family. By using staggered plantings — generally every week from March 20 to June 15 — the Hecks will have fresh sweet corn to sell from mid-June until early October. Using different maturities enables them to adjust to weather issues.

A portion of the garden crops go into plastic-covered beds with drip tape underneath while the rest are under pivot irrigation. Extra help is hired in the summertime as a dozen or so young people from the community lend a hand, particularly for harvest.

“We like to be able to provide some employment for kids,” Duane says. “It’s pretty labor intensive but we get some pretty good kids to help and I think their parents appreciate them having the opportunity to earn a little extra money.”

The corn will be sold, along with other vegetables, during a dizzying schedule that finds family members at roadside stands and farmer’s markets Tuesday through Friday in Garnett, Iola, Burlington, Ottawa, and Emporia.

And on Saturday, they travel to the huge Kansas City Farmer’s Market where more than 10,000 customers show up each week. The family usually has four booths at Kansas City and sells about 1,000 dozen-ear packs — that’s the equivalent of about four pickup loads.

“People seem to really appreciate fresh, locally-grown produce,” Duane notes. “We try to listen to our customers and learn what they want. We try to have a very clean product — I can tell you that worms are a pretty big thing with city people.”

With 1,000 acres of more traditional row crops, the Hecks have some serious time management issues but Duane says the melons, sweet corn and tomatoes fit in with the row crops fairly well because most of the marketing takes place during the summer. “Fall,” he admits, “can get pretty hectic.”

This year, the Hecks have added green beans, cabbage, cauliflower and broccoli. In addition to time and labor challenges, Duane admits that the learning curve can also be fairly steep. “Learning is continuous,” he says. “We spend a lot of time during the winter gathering information. There’s a three-day fruit and vegetable expo we attend in Grand Rapids, Mich., and another good one in St. Joseph, Mo. And we talk to the other vendors at farmer’s markets and learn from each other.”

Because of the high value and high input costs of vegetable farming, the risk is considerable. The Hecks use hail insurance but, because of crop value, face coverage limitations. “The main risk, though, is lack of moisture so having the ability to irrigate is our main insurance.”

Frontier Farm Credit has also been able to play a role in bringing the next generation into the operation. Twenty-three year old Ashton has utilized Frontier’s AgStart lending program for young and beginning farmers. It’s enabled him to be a partner in the vegetable operation as well as expanding his own row-cropping enterprise.

Expansion, the Heck family has found, doesn’t necessarily mean more acres. Relying on their own hard work and knowledge, along with some assistance from Frontier Farm Credit, Duane Heck and his family have grown their operation right off their Anderson County farm and onto the dinner plates of thousands of consumers.

“Farming looks mighty easy when your plow’s a pencil and you’re a thousand miles from the corn field.” President Dwight D. Eisenhower, 1956

The seeds of the 2012 Farm Bill will be sown into a harsh environment as budgetary and partisanship storm fronts clash, putting farmers smack-dab in the middle.

With good commodity prices and mounting federal debt, the buzz is that it’s time to completely overhaul or drastically cut farm programs.

Farm policy expert Barry Flinchbaugh has heard it all before: “I’ve been involved with every farm bill since 1968 and I’ve heard that every time,” the Kansas State University economist says. “I don’t see a complete overhaul or the elimination of farm programs. Cuts, yes. But I believe there will be a safety net — even if there are bigger holes in it.”

If you want to know where those cuts will come from, University of Nebraska Ag Economist Brad Lubben suggests you follow the money. Although the biggest slice of the current farm bill pie is domestic food assistance— nearly 80 percent of the total —the pieces directly affecting farmers are commodity programs in the $6 billion ballpark, about $8 billion for crop insurance and conservation incentives growing toward $4 billion per year.

“For farmers, that’s where the money is,” Lubben observes, “and all of those areas are spending targets. The 2010 mid-term elections changed the rules of the game. The mood is definitely cut, cut, cut.”

Lubben notes that House Budget Committee Chairman Paul Ryan’s budget proposal calls for roughly $30 billion in cuts to farm programs over 10 years, aimed at commodity, crop insurance and conservation programs. President Obama’s proposed cuts are much less but the targets are pretty much the same. Neither proposal is binding but they are blueprints and it seems clear the House and Senate ag committees will have fewer dollars to parcel out. Furthermore, budget reconciliation could force the hand of the ag committees, limiting the total price tag of the 2012 farm bill. And, the committees begin already short on funding just to keep the current set of programs going in the next farm bill.

“How they prioritize those dollars will be the key for farmers,” Lubben adds.

With high inputs, high prices and high volatility, the government’s investment in crop insurance is undeniably important to farmers right now. Arguments are being made now, however, that the other parts of the farm safety net — direct and counter-cyclical payments — are no longer necessary in light of relatively high commodity prices. Flinchbaugh calls that point-of-view near-sighted:

“There is a drunken optimism out there that assumes commodity prices will remain high forever,” he says, “but you can’t back that up if you have any sense of history. Farm income support programs will be scrutinized, but the fact remains that when prices fall below the cost of production — and they most certainly will — farmers need some sort of safety net. We’d better keep those support payments in the program because we’ll need them down the road.”

Flinchbaugh says there has been some discussion of deregulating crop insurance and acknowledges that a totally effective crop insurance system would eliminate the need for decoupled payments. That, however, is extremely difficult to design, he says, and he looks for the 2012 bill to be similar to 2008, albeit leaner.

“There will be some tweaking — and some cuts — but I don’t see a change in the fundamentals of farm policy,” Flinchbaugh says. “The government is not going to get out of agriculture. Food security is too vitally important for that — domestically and globally.

The K-State economist says there’s plenty of ag savvy among the people who will ultimately write the bill. In the House, Ag Committee Chairman Frank Lucas (D-Okla.) and Ranking Member Collin Peterson (D-Minn.) are both old hands at farm policy and have expressed concern over maintaining a safety net. Senate Ag Committee Chairwoman Debbie Stabenow (D-Wisc.) is newer to the game but is working closely with Ranking Member Pat Roberts (R-Kan.), a major player in recent farm legislation. And while various interest groups will have their own agendas, Flinchbaugh believes commodity groups will present a fairly united front.

“There will be conflicts, of course,” he says, “but we’ll have better agreement across commodities than in the past. They finally understand what a small minority they are and they know the system better. And, there’s more equality today among the commodities. At one time, cotton ruled but the powerbase is much more even now.”

But don’t expect smooth sailing. In addition to the budget constraints, 2012 is a presidential election year and that may stall passage.

“Don’t be surprised if we don’t get a farm bill passed before the election,” Flinchbaugh says. “It will likely happen in the lame duck session or even in early 2013 which will mean that current law will have to be extended until a new bill passes. If they do nothing and allow the 2008 law to expire, we revert to the permanent legislation, which is the 1938 Agricultural Adjustment Act and the Agricultural Act of 1949. That’s not an option. Something has to give and it will.”

While nearly everyone agrees that budget cuts are essential to slow the runaway train of federal debt, both economists point out that even dramatic slashes in farm spending will have little practical effect. Flinchbaugh, in fact, calls it a “cruel hoax” to attempt to balance the budget without addressing the “big four” —Social Security, Medicare, Medicaid and Defense.

According to the House Committee on Agriculture, crop insurance accounts for 0.19 percent of federal spending while conservation and commodity programs are each about 0.15 percent.

And, Flinchbaugh observes, farm program costs are already down about two-thirds since 2000. “If we could get every other sector of the economy to do that, we’d have a budget surplus,” he points out.

Lubben advises that all of this farm bill uncertainty calls for proactive management. “Farmers need to ask themselves what their exposure is to lower direct payments and more expensive crop insurance,” he suggests. “They may find that they need to adjust their management strategies, particularly in terms of risk management. Reductions in program payments to farmers will take away from their cash flow. Ultimately, that could show up in land prices and rental rates.”

“And,” he concludes, “farmers may want to consider what kind of influential role they can play in the public policy arena so they can have a voice in this 2012 farm bill discussion.”

Frontier Farm Credit and its customers can take plenty of pride in a crop growing nearly 9,000 miles away. South of the equator in Zimbabwe, there’s a field of corn that’s above knee-high right now and it’s going to make a big difference for innocent people victimized by horrible conditions.

The planter that put the crop in the ground, the seed and the fertilizer was purchased by Tractors For Our Daily Bread, thanks in large part to contributions from Frontier Farm Credit and its members. Tractors For Our Daily Bread has been ministering to needy people in the U.S. and around the globe since 1994. The non-profit charity is unique on more than one level. First, the endeavor is deeply rooted in agriculture and, second, 100 percent of donations go directly to the ministries it supports.

“Thanks to the generosity of those who support us, I can physically hold children who would not otherwise be alive today,” says Floyd Dowell who, along with his wife, Gayle, coordinates the Manhattan, Kansas-based organization. “If this recent shipment — the one Frontier Farm Credit and their customers contributed to — had not gone out, there are people who would have died. That’s the stark reality for these people who are innocent victims of terrible situations.”

Frontier Farm Credit’s involvement began with a donation of 1,000 shirts and blossomed into a $5,000 seed money commitment in which the agricultural lender matched donations from its customers and friends in the farm community. The “harvest” of that seed money was a combined donation exceeding $25,000. Some of the money went for the planter and planting supplies, but much of what Tractors For Our Daily Bread sent to Africa will fill much more immediate needs.

In November, a 40-by-8-by-8 foot container left Manhattan headed for Eden Children’s Village, an orphanage in Zimbabwe that includes a farming program. Inside the container were a variety of farm supplies, clothing and thousands of fortified rice meals for severely malnourished kids — children whose lives are on the line.

Even the container itself will benefit the African farmers as a grain storage structure. Dowell knows a lot about the importance of protecting stored grain from pests, since he is a researcher with USDA’s ARS Center for Grain and Animal Health Research. Producing grain is difficult enough in Zimbabwe but food shortages there are exacerbated by poor storage that results in a large portion of grain being consumed by rats and insects.

From shirts to grain storage, Tractors For Our Daily Bread’s recent shipment is something in which the folks at Frontier Farm Credit take a great deal of pride.

“This has been a tremendous project,” says Frontier Farm Credit Board Chair Bill Miller. “It’s a great way to share our blessings with those who are less fortunate. It’s all about farmers helping farmers to help themselves, and I applaud the Frontier Farm Credit staff for its commitment as well as that of our friends and customers.”

Miller, a Flint Hills rancher, has been particularly touched by the suffering of the young who live in such dire conditions through no fault of their own.

“We have so many resources that we take for granted,” he adds. “Unfortunately, that’s not the case for so many around the world. It’s very heartening to see the ag community respond to their needs, and I think it speaks to Frontier Farm Credit’s commitment to the power of agriculture.”

According to Dowell, the contributions from Frontier Farm Credit far exceed the dollars that were donated. “It also helps to raise awareness,” he explains. “This will spin off from a core group and, hopefully, more people will become involved and contribute. Down the road, I’m sure we’ll get more donations that can be traced back to this generosity.”

And even the smallest donations are very much appreciated, Dowell adds. In addition to monetary contributions, Tractors For Our Daily Bread gathers and ships farm equipment to help the poor more effectively grow their own food. As farms here in the U.S. grow in scale, small farm equipment is less desirable but it’s often perfect for Third World farmers. Over the years, Tractors For Our Daily Bread has sent numerous small, used tractors to Africa and other places. The most recent shipment included a small square hay baler and a grain auger as well as farm shop tools and other items.

Additionally, volunteers help load and ready the items for shipment.

“Believe me, it all makes a difference in people’s lives — especially for the children,” Dowell asserts. “Everything we are able to do is directed at helping those in need. We spend nothing on overhead so we appreciate any kind of support.”

To learn more about Tractors For Our Daily Bread, log on to their web site at www.tractors4bread.org. Tax-deductible donations can be sent to Floyd and Gayle Dowell at Tractors For Our Daily Bread, 3310 Germann Drive, Manhattan, Kan. 66503.

Like a thunderstorm rolling across the agricultural economic landscape, commodity volatility rains down opportunity as well as challenge. And in a farm financial climate that’s growing more complex, managing that uncertainty is the key to profitability.

According to Frontier Farm Credit Chief Financial Officer Tony English, outside macro-economic drivers are increasingly shaping commodity price movements — those of both farm crops and the inputs required to produce those crops. In addition to market fundamentals, currency markets, emerging economies around the world and the flight of investment capital into commodity indices have more impact than ever on the prices farmers receive, as well as, the prices they pay.

“Like it or not, the whole concept of a global economy is on us,” English says. “Not only do supply and demand contribute to volatility, but a growing number of factors interact to create price movement.”

English points out that increased demand from emerging economies — particularly in Asia — is combining with a weaker dollar to help drive commodity prices higher. When the Chinese central bank raised its rates on December 13, for example, English noted an immediate downward pressure on the dollar as investors moved to more attractive rates of return. On the supply and demand side, emerging economies appear to be rebounding more quickly from the global financial crisis, further supporting demand for farm commodities. China already accounts for 60 percent of global soybean imports and, along with Brazil and India, has increased its demand for wheat the past two seasons while wheat demand actually decreased in the U.S. and the European Union.

Tom Leffler, who runs Leffler Commodities at Augusta, Kansas, says English is right on track about increasing price volatility. “If you watch the market on a daily basis, it’ll drive you crazy,” he says. “The market moves more and moves quicker than ever before. We have a market that’s not being traded strictly off the fundamentals and we really need to understand that out in farm country. The value of the dollar is a double-edged sword in the market and we have these funds with a tendency to move large amounts of money into and out of the commodity market. Not everything is predictable so you have to position yourself for volatility.”

Across the board, farm commodities are trading substantially higher than a year ago, Leffler notes. Corn, soybeans, wheat — all went into 2011 two to three dollars higher than their value at the beginning of 2010. And the story is pretty much the same in the animal protein markets with many predicting even loftier cattle prices ahead.

It’s enough to get any farmer excited but it’s also a situation that gives Leffler pause. “Somewhere down the road, we will see a real train wreck. For beef, corn, wheat and other commodities, we can get to the point where high prices impact usage — buyers will back off and either seek alternatives or cut back on use. That will put downward pressure on the markets. Remember, as recently as 2006, corn was trading in the $2 range and soybeans were around $5 and two years later we saw record highs. I don’t see us retreating to 2006 levels anytime soon but I don’t see us holding at current prices forever either. And regardless of the longer-term trend, we can see fairly large movement both up and down from one day to the next.”

“For a farmer,” he continues, “the important thing is to take advantage of high prices when you can and protectyourself from the lower prices we will have somewhere down the road.”

English adds that today’s agricultural producer needs to have a balanced risk management strategy. “We have to remember that volatility affects our inputs as well as our outputs,” he notes. “Crude oil prices move in a global economy but they obviously have a tremendous local impact on a farmer’s cost for diesel, fertilizer and a wide range of petroleum-based products. At the end of the day, we can’t just do a good job of marketing our output. That’s just one side of the equation. We have to be balanced. We have to consider what’s going on with commodities that affect our costs.”

Cash rent — particularly on a multi-year basis — is another area in which volatility can wreak havoc with farm finances. Obviously, bidding up rent when crop prices are high can leave producers financially vulnerable when those prices fall. According to Kansas State University Extension Agricultural Economist Kevin Dhuyvetter, land rent is yet another area that requires risk management.

“With today’s magnitude of volatility, in a situation where a fixed cash rent is negotiated for a three- or five-year period, someone is going to be wrong during that period — someone is going to be unhappy,” he says. “For example, a cash rent of $60 may have seemed reasonable when it was negotiated but, with today’s prices, that same land may rent closer to $100. And of course that ‘fair’ price can move in either direction. We really need to start getting more creative in dealing with volatility.”

Flexible cash rent leases can be an effective means of addressing the issue, Dhuyvetter says. “One way people have done this is to simply pay a bonus on top of the negotiated rental rate when prices are favorable,” he notes. “They have the right idea but that’s somewhat arbitrary. A bonus tends to become expected. I think it’s important to tie flexible cash rent to a formula that responds in a predictable way to what’s happening in the market.”

The sharper ups and downs of the market make it more important than ever for producers to have strong relationships with the people linked to their operations.

“A very important aspect of dealing with volatility,” Dhuyvetter asserts, “is to increase the level of communication with all parties, particularly input suppliers, lenders and landlords. The better everyone understands the situation, the better they can work together.”

Keeping one eye on the global economy while juggling the demands of an individual farming operation is a lot for any farmer to have on his or her plate. Just as commodity prices reflect more complex causative factors, managing them requires a more intensive financial strategy.

“It takes a team,” English says. “One person cannot be an expert on all things and even if he or she were, there aren’t enough hours in the day. That’s why our approach at Frontier Farm Credit is to build a team of experts around our customers. The contact point is the financial services officer and it branches out to include business services, planning, appraisals, crop insurance, tax and record keeping. And we continue to build strategic relationships with other service providers from which Frontier Farm Credit customers can benefit.”

“We feel very strongly about keeping our loan products and services competitive but we recognize it’s important to add further value, to have a more complete relationship with customers and to contribute value that can make them more successful. Helping them manage risk from price volatility is an excellent example of that.”

From his viewpoint as a commodity broker and marketing consultant, Tom Leffler also believes farmers need expert advice in the marketplace. “Farmers today need to employ some type of marketing advisor,” he suggests. “Today’s market is a lot like today’s tractors. It’s so complex it demands specialized knowledge. Even more important, though, is that you need someone on your side who can focus on that aspect of your business. A marketing advisor can take some of the noise out of the daily markets and help a farmer select the marketing and risk management tools that suit him or her best.”

The higher level of “noise” in the market can be an extreme distraction for farmers with plenty of other things to do. “It can be intimidating and it can send you on some wild goose chases,” Leffler says. “It’s important to know your costs and know what you need to get from your production. Put that top-of-the-market thing out of your head and put together a solid, disciplined strategy for profitability.”

Frontier Farm Credit, according to Tony English, is uniquely positioned to assist farmers on all financial matters. “Our edge is our people,” he asserts. “Our people understand there is no boiler plate approach for the farms and ranches they serve. Situations are very individual and that means it’s important to have relationships with our customers and not just transactions — that way we can provide the expertise they need.”

And highly volatile commodity markets are a great example of where plugging in to a team of financial experts can have a very definite pay-off.

“For me, the bottom-line is to not let volatility drive you out of the game,” English concludes. “Risk can be managed. There are a lot of positives right now in production agriculture, but we need to be aware of risk management so we can take advantage of favorable prices and moderate unfavorable costs.”

To learn more about strategically tailored agricultural lending and financial services opportunities, visit with the folks at your local Frontier Farm Credit office.

Clint Holland has a cattleman’s pedigree. The young man from LaCygne, Kansas, has the background, the experience and the desire to embark on a career of putting beef on America’s dinner table.

What he needs is a start.

“This is a young guy from a hard-working family who wants to be a beef producer,” explains Rick Kuhle, a Frontier Farm Credit Financial Services officer based in Baldwin, Kansas. “Clint is a great example of how AgStart can help the next generation of farmers and ranchers get a start in production agriculture.”

AgStart is Frontier Farm Credit’s financial and educational resource for young, beginning and minority farmers and ranchers who need a leg-up to climb into the business of production agriculture.

For Clint, AgStart provided the capital to purchase lightweight feeder calves, enhance their value in a stocker program, and market them as feedlot-ready in the 700-lb. weight range.

“I buy cattle that can be improved,” Clint explains. “I go to area sale barns and try to identify under-valued calves that just need a little TLC — mainly singles and doubles because I can usually buy them a little cheaper.”

The adding-value strategy mirrors what his parents, Mike and Angie Holland, do on their Miami County operation. Getting calves straightened up and onto a good nutritional plan, Clint aims to add about 250 pounds to each, primarily utilizing grass he leases near the family’s ranch headquarters.

Clint bought his first calves with the help of AgStart in April of 2010. Since then, he’s shipped about 120 head with an average profit of $75/head.

“It’s worked pretty well,” he observes. “I’ve been able to ship my cattle with my dad’s loads and that’s enabled me to market my calves in larger groups and that helps maximize their value.” Most of the calves are sold directly to feedyards in western Kansas.

“I couldn’t have asked for it to work out better,” Clint says. “Rick (Kuhle) and everybody at Frontier Farm Credit has been extremely helpful and, of course, I couldn’t do it without my parents.”

Providing the capital for Clint to get a start in the cattle business is just one aspect of AgStart. Through Farm Credit University’s AgBiz Planner, Clint is also increasing his business knowledge. Having attended Allen County Community College, he’s now a junior at Fort Hays State University so education figures strongly in his future plans. AgBiz Planner complements Clint’s educational goals with a real-world curriculum designed to improve business-planning skills and further his financial knowledge.

“So far I really like it,” he says. “It’s definitely going to help me on the business side of things. I think it will make me more aware of my finances and help me do a better job of business planning.”

Joe Metzen, who is the AgStart staff leader for Frontier Farm Credit, believes the educational component of the program plays an important role in helping young people embark on a farming or ranching career.

“There is a lot of access to production information but with the increased financial risk and volatility in agriculture today, understanding the financial side of things is more important than ever,” he says. “The risks are greater and the effect of not managing those risks is also greater. Our goal is to provide access to information that helps the participants do a better job of preparing a business plan and monitoring their own financial progress. It’s very realworld oriented and it’s self-directed so the participant can do it at his or her own pace. We think it’s a great program.” Presented in an online format, AgBiz Planner guides participants through a variety of business topics tailored to production agriculture. Content for the college-level course was developed by internationally respected agricultural economist Dr. David Kohl. Learning modules include: Megatrends of Agriculture; Strategic Business Planning; Preparing for Your Lender; Constructing a Balance Sheet; Constructing an Income Statement and Cash Flow Projection; Understanding Lending Decisions; Farm Business Factors and Benchmarks; Growth and Transition Management; Personal Financial Management; and Communication, Ethics and Leadership.

Through his involvement with AgStart, Metzen has witnessed a pay-off that goes beyond providing credit to young farmers and ranchers. “I have definitely seen young people growing in terms of thinking further ahead in their businesses,” he says. “They’re much more aware of the costs associated with their business plans and what it takes to be profitable. AgBiz Planner takes the credit aspect of the program a step further by providing the tools to track their progress and evaluate the financial factors involved.”

For Metzen and Frontier Farm Credit, it all comes down to helping customers be successful. And that, he says, is an integral role a committed agricultural lender can play in launching the next generation of America’s farmers and ranchers.

“After all,” Metzen concludes, “Their future is our future.” For more information on AgStart and AgBiz Planner, visit with the folks at your local Frontier Farm Credit office.

Ben Giger and his wife, Leah, turned to Frontier Farm Credit to assist them in solidifying their family’s future in farming. After graduating from Kansas State University and returning to the home place in 2002, Ben wanted to join his parents, Alan and Carol, in their Elmdale, Kan., crop and livestock operation.

The Gigers faced a problem familiar to a lot of farm folks. The operation just wasn’t large enough to support both families. Working part-time for a neighbor helped for a while, but Ben and his dad knew they would have to expand the business.

Growing a production agriculture enterprise is, of course, far more complex than simply obtaining a loan for more land or livestock. And that’s where Frontier Farm Credit was able to help in numerous ways. Although it began with credit to help the Gigers generate more income, over the past few years the partnership between the Flint Hills family and Frontier Farm Credit has grown.

Today, Frontier Farm Credit experts handle accounting and tax services for the operation as well as helping select optimum crop insurance products. Frontier professionals guided them in formulating a generational succession plan. They provide online, 24-7 access to account information and, last year, Ben was able to purchase his first farm with a Frontier Farm Credit AgStart young beginning farmer loan.

For Ben, though, much of the benefit to doing business with Frontier Farm Credit is in the form of solid financial guidance and a relationship he can rely on.

“It feels like they’re on our side, that they’re part of our team,” he says. “Besides the capital it takes to expand, Frontier Farm Credit has given us informed, sound financial advice. They’re pretty conservative and that suits us just fine. We want to succeed and they want us to succeed.”

The commitment to success defines Frontier Farm Credit’s role, according to Gena Ott, the Gigers’ financial services officer.

“The Giger family has been wonderful to work with,” she says. “They’re very open and forthcoming about their plans and what they want to accomplish. That helps us better advise them and it helps us put together the products that are best aligned with their business goals. It’s very satisfying to provide financial expertise that allows them to really focus on management and production — and to be successful.”

The Giger operation has gone through some dramatic changes, expanding both in crop and livestock enterprises. Ben and Alan run about 300 head of Angus-base cows that are bred to Salers bulls. An important part of the farm’s expansion has been the addition of a 500-head/year feedlot, delivering Source & Age Verified, black-hided fed calves to Creekstone Farms, an Arkansas City processor that provides natural and premium Black Angus beef.

“Formerly, we’d just background our calves until January and take them to a sale barn,” Ben explains. “The feedlot has enabled us to capitalize on our management and increase our income — and, it gives us carcass data and other information that helps us make better breeding decisions.”

On the crop side, the Gigers have also expanded, growing more no-till wheat, corn and soybeans in the Cottonwood River bottoms of Chase County. All in all, the farm encompasses 2,500 acres of pasture, 1,600 acres of crop ground and 150 acres of hay meadow. Frontier Farm Credit has provided financing for headquarters improvements such as grain bins, equipment storage structures and the feedlot expansion in addition to remodeling the farm home Ben and Leah share with sons Henry, 5; Harrison, 3; and Heath, 1.

Growing the business, however, brings with it other considerations. In particular, the Gigers needed a succession plan for Ben and Leah to eventually take over the operation from Ben’s parents.

Dennis Roddy, Frontier Farm Credit senior vice president, Business Services, led a team that, among other things, helped the Gigers form a Subchapter S corporation, establish trusts for Alan and Carol, and obtain life insurance for Alan and Carol to ensure that the non-farm heirs would be treated equitably in the distribution of their parents’ estate.

Business Services complement Frontier Farm Credit’s lending services by helping customers capture synergies in business management. “In the case of the Gigers, we’re able to have a dialogue with their tax accountant, their lender, and their crop insurance provider,” Roddy explains. “There is a better clarity of their business situation and goals — that’s very valuable in ensuring that we provide the very best products and advice for their particular situation.”

“Every farm is different, every family is different. The key is finding the very best way to serve the customer and that means knowing where they want to go and helping them identify the best way to get there.”

With a knowledgeable support staff and six tax accounting professionals — including four CPAs and two MBAs — the business services team offers very high-level financial expertise but Roddy suggests that one of their most important qualifications is much more basic.

“We have people who really understand agriculture,” he asserts. “It’s what we do.”

And, Roddy notes, there’s another good reason the Gigers take full advantage of what Frontier Farm Credit offers. “The other very real benefit for the Gigers is convenience,” he continues. “They can come in and have a conversation with their lender and, if necessary, we can bring their tax accountant or their crop insurance agent into the dialogue. The same thing holds true if they’re conducting business electronically or by phone — the professionals they rely on are all right here and that leads to betterinformed decisions.”

And Ben agrees: “It’s great to have it all in one spot,” he says. “They’re able to give us more informed advice and help us make better choices. Dennis Roddy and his people have been really good on tax issues and the succession plan makes the future more clear — there’s more motivation to work hard when you know you’re going to receive the benefits of that work.”

Just as Ben and Alan work side-by-side in their Flint Hills farming and livestock enterprises, Frontier Farm Credit has worked side-by-side with them to help accomplish their goals.

“We needed to expand and they made it happen,” Ben concludes. “I love doing business with them.”

To learn more about strategically tailored agricultural lending and financial services opportunities, visit with the folks at your local Frontier Farm Credit office.

In addition to providing clothing, we are providing a cash match—up to $5,000. For every $4 a customer or ag industry friend donates, we will donate $1.

Please download the flier Tractors for Our Daily Bread.pdf or news release Tractors for Our Daily Bread News Release.pdf to learn more.