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President's Corner
President's Corner
by Doug Hofbauer
The first half of 2008 has drawn to a close and your Association continues to grow at a rapid pace. As of midJuly your Association has grown to nearly $1.2 billion in accrual loan volume at over 97% acceptable credit quality, based upon adding over $271 million in new loan volume. Our newly formed crop insurance team – in addition to providing crop revenue insurance coverage for our customers – has added over 80,000 acres of crop hail coverage……and continue to add coverage for more customers daily. Our newly formed business services team has completed
tax returns, records, and/or business consulting for over 230 customers. In April we completed the distribution of $4 million in patronage from 2007 earnings.
The first half of the year has not been without challenges. Nearly all segments of our customer base have been dramatically affected by the cost of energy, whether it occurs in the high price of fertilizer, chemical, or direct fuel costs for field operations and trucking costs for product delivery. Weather in parts of our territory has been a real challenge at times, creating delayed planting in parts of the territory for corn first and then later both first and second crop soybeans. Most recently the wet weather contributed to quality issues for the wheat crop. We have a number of nursery and greenhouse customers that deal with the same high transportation and input costs and production problems that affect our farm operators. Livestock producers have some of the biggest challenges right now as they struggle with high feed costs. Pork producers have also had to deal with low market prices although record exports appear to have supported that market as the large supplies work through the system. In general our cattle producers appear to be weathering feed costs a little better with more options for feed sources and more positive market prices generating better returns.
I’ve been very impressed with the quality of our customers and your ability to manage through these turbulent times. As I drive our Association territory now, the crops generally look good. We’ve had favorable rains and growing temperatures for our corn tasseling and finally the soybeans are beginning to respond. For livestock producers it does appear that the high prices for corn have created some rationing in use, and the positive overall crop conditions have brought prices back down into some feed buying opportunities. That’s a positive, especially when coupled with what appear to be some pricing opportunities in the futures market.
I’ve said this before but we keep seeing examples over and over. Change, opportunity, and risk seem to reside together. The pace of change and the potential opportunities for this industry are just mind boggling at times. What may have worked in the past may not in the future and that’s what business is all about: recognizing, creating, and capturing opportunities to grow your business. I want to compliment and thank you for connecting with your Financial Services Officers early in the process of evaluating opportunities so they can assist you with options.
Your Association has never been in a better position to serve your needs. We have knowledgeable people that love living and working in rural America. It’s exciting, it’s challenging, it’s fun, and it’s a privilege to work in a purposeful career of service. We’re here to help find financial solutions to take you in the direction you want to go. Thank you for trusting us with your business.
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