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President's Corner
by Doug Hofbauer
Some days the best way to “take care of business” is to leave the “home place”. I love leaving the office to visit with customers and I also appreciate gaining perspectives by attending regional and national events. I’ve found that no matter where I go and who I visit with in agriculture there is a common thread – a love for the industry, a love of the land they farm or ranch, and a sheer love for the beauty of living and working in rural America.
I’ve also noted that producers are generally passionate about their specific industry and production practices. What impacts one industry or product in a positive way may impact another industry or product in a negative way. We have numerous examples including the debate on ethanol blend and government support, regulations on water, and different crop and livestock production systems. The cause and effect from numerous well intentioned product promotions potentially creates winners and losers and may pit one part of the industry against another.
For example, in the last few months we’ve seen the positioning of specific food production systems such as “local”, “organic”, “natural”, “grass fed”, “antibiotic free” versus what has been coined as “conventional food production” as if “conventional food production” was somehow bad. That coincides with a USDA initiative on “Know Your Farmer, Know Your Food”. While that’s a well intentioned initiative I’m sure consumer preference and buying habits will ultimately determine the value of any product differentiation strategy. In my opinion, it cannot be a debate of one over the other, but rather how each operation’s strategy fits the market they serve.
It’s our Association’s mission to provide sound and constructive credit and financially related services. Our strategy is to finance agriculture as we find it as long as the operation has a reasonable chance for profitability and success. For example, we have several customers with operations that provide locally grown produce, many times in combination with their conventional crop or ranching operation. Staff that serve local direct-marketing operations tell me it takes a real dedication and a love for the business to be successful. There are different kinds of risks to manage, and it takes many hours of labor to produce and directly market a crop to consumers. A quote I’ve heard from one of our officers – “A half acre farm doesn’t look too big until you’re farming it on your knees!”
In generally affluent countries like the U.S., consumers have both the resources and opportunity to be selective about where and how food is produced. That’s a privilege we enjoy. When in season I love fresh strawberries, sweet corn, asparagus, and other fresh fruit and vegetables. I also like farm raised chickens, beef, and pork and I’m willing to pay more for it. But the rest of the year I also want access to fruit, vegetables, and meat in the local grocery that I know is wholesomely and safely produced in today’s conventional and highly efficient production systems.
You’ve probably heard or read the prediction that we will need to double world food production by 2050 to meet the needs of our growing world population. We can’t do that if we reduce efficiency. The world for certain needs more protein and we just do not have the land mass to produce all our livestock in free range conditions and still meet that demand. Agriculture will continuously change, grow, and evolve and I think for any one segment to attack another is harmful to the industry as a whole.
We are very proud that our Association and the Farm Credit System has withstood the financial stress of the fall of 2008 and much of 2009 and because of our strong capital position, system earnings, and overall financial strength we didn’t even give a thought to seeking government assistance. We met the needs of all creditworthy customers and gave time to producers under stress to return to profitability. We are proud to serve our industry, love living and working in rural America, and are passionate about serving our customers that we know and respect. We hope that you might give us a chance to earn even more of your business in the future and sincerely thank you for your business and trust in our Association.
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