Annual Report 2018 - Page 42

YOUNG, BEGINNING, AND SMALL FARMERS AND RANCHERS FCS Financial, ACA (Unaudited) We have specific programs in place to serve the credit and related needs of young, beginning, and small farmers and ranchers (YBS) in our territory. The definitions of YBS as developed by the Farm Credit Administration (FCA) follow:    Young: A farmer, rancher, or producer or harvester of aquatic products who is age 35 or younger as of the loan transaction date. Beginning: A farmer, rancher, or producer or harvester of aquatic products who has 10 years or less farming or ranching experience as of the loan transaction date. Small: A farmer, rancher, or producer or harvester of aquatic products who normally generates less than $250 thousand in annual gross sales of agricultural or aquatic products. Demographics* We have used the 2012 United States Department of Agriculture (USDA) Ag Census as our source of demographic data for Young, Beginning, and Small Farmers. We have 93,204 farmers in our 102 county territories. Of these farmers, 11.1%, or 10,163, are young farmers, 24.8%, or 23,149, are beginning farmers, and 94.0%, or 87,609, are small farmers. The census data is as of 2012 whereas our portfolio data is based on the number of loans in the current year. Mission Statement Our Young, Beginning, and Small Farmer’s mission is to be the lender of choice by providing industry leading financial services, agricultural expertise, and cooperative educational opportunities to help them succeed in the marketplace. Quantitative Goals We will strive to maintain a portfolio mix of young, beginning, and small farmers that matches the marketplace based on recent USDA Ag Census data. Related services continue to be offered and sold to young, beginning, and small farmers on a statewide basis through our normal delivery channels. We are also a participating lender for the Missouri Linked Deposit Program which offers, among others, a program for beginning farmers. Additionally, we participate in the financial assistance program for beginning farmers that is administered through the Missouri Department of Agriculture's Agricultural and Small Business Development Authority. Special educational meetings are held periodically for promotional and educational purposes. New Customers 2018 Goals 2018 Actual New young farmer customers: 308 314 New beginning farmer customers: 465 455 New small farmer customers: 652 565 Outreach Program Portfolio Goals (dollars in millions) Number of young farmer customers: Number of beginning farmer customers: Number of small farmer customers: Young farmer volume: Beginning farmer volume: Small farmer volume: Young farmers with guaranteed loans: Beginning farmers with guaranteed loans: Small farmers with guaranteed loans: Guaranteed young farmer volume: Guaranteed beginning farmer volume: Guaranteed small farmer volume: 2018 Goals 3,365 4,943 10,216 $640 $778 $1,284 524 520 620 $118 $120 $133 2018 Actual 3,313 4,839 9,531 $643 $789 $1,267 561 556 647 $125 $124 $135 The FCS Financial Connect and Heartland Heroes programs continue to provide a benefit to those involved in the programs. Through four key areas of credit standards, cooperative representation, communication and knowledge sharing, Connect helps participants realize their full potential to find success. Heartland Heroes was launched in 2017 based on the Connect program. It combines credit, communication, a resource team and knowledge sharing to help veteran farmers realize their full potential. Current farmers who are FCS Financial member-owners are volunteering their time and expertise to serve as a resource for Heartland Heroes participants. Heartland Heroes strives to serve veterans who are aspiring agricultural entrepreneurs, those returning to a family farm or those who want to live a rural lifestyle. We continue to host programs and seminars for Vo-Ag classes, young farmers, and other organizations. All promotional information and brochures targeted to the YBS Program offer related services as part of the materials. We incorporate specific advertising campaigns in our media plan that target YBS publications. Additionally, we provide content in one issue of our customer magazine, HeartBeat, specific to YBS as well as e-newsletters for this segment. A grant program for eligible 4-H and FFA chapters to improve their communities, academic scholarships, and Ag Youth Funding program for 4-H and FFA members continue to play a role in our YBS strategies. Additionally in 2018, FCS Financial expanded its social media presence by adding Facebook to its current platforms of Twitter and YouTube. We conduct advisory stockholder meetings annually. One stockholder committee meeting consists of YBS customers only to address the needs of this segment. We continue to evaluate options for providing joint educational programs with other agribusiness and academia associates in the state. The goal for 2018 was to continue working with educational groups that already have strong agricultural education programs. Funds were allocated in 2018 towards enhancement of current public relations and educational events with existing relationships. Safety and Soundness of the Program On June 20, 2002, we approved a policy that directed the establishment of programs to provide credit and closely related services to young, beginning, and small farmers, ranchers, or producers or harvesters of aquatic products. Implementation of this policy supported the availability of sound, adequate, and constructive credit and related services for YBS. On September 1, 2002, we implemented our YBS program. Our YBS policy was approved in November 2005. We monitor this program on an ongoing quarterly basis. The overall results of our YBS program have been favorable since implementation. We review its performance on an annual basis and make any necessary changes. *There are several differences in the methods by which the demographic and FCA Young, Beginning, and Small Farmer data is presented: Young farmers are defined by the FCA as 35 years old or less. The USDA demographic stratification breaks at 34 years. Beginning farmers are defined by the FCA as having 10 years or less farming experience. There is no measurement matching this definition in the USDA Census; however, the census does identify farmers on their current farm less than 10 years. That statistic may include beginning farmers, but may also include experienced farmers who have recently changed farmsteads. The FCA Small Farmer definition matches closely with the USDA delineation. The USDA Census of Agriculture is the best source of demographic information within the association local service area. Even though the statistical results of the census do not match the FCA definitions exactly, they do provide a consistent source of measurement with which to assess association targets and goals. 39